Leverage

The Friday celebration to open the Gordie Howe bridge linking Ontario and Michigan is kaput. With a whimper, not a bang, the cars and trucks will start flowing.

Given that the Americans are acting like total pricks, said Ottawa (we’re paraphrasing here), it’ inappropriate to pop corks and do a happy chicken bridge dance. So, no hoopla.

Canada and the US are at war now. The latest 50% tariffs are obscene, unwarranted and capricious. The bridge revenue spat was pure American bullying. Trump intends to gut our free trade agreement. And the US is about to unleash a global tariff assault with the capacity to cause a world-wide recession.

Why?

Because they need the money. The US is unwilling to raise taxes on the wealthy and corporations (which is why stock markets have been in party mode since 2024). It has almost $40 trillion in debt and Trump is adding $3.5 trillion more. As US economist Josh Lipsky writes, what 47 is doing might just endure forever as the bond market comes to rely on the flow of trade taxes.

“The shock waves from Mr. Trump’s decisions on trade will last well beyond his presidency. The world’s largest economy is set to be more protectionist for the foreseeable future. Financial markets have found their silver lining in this new reality. If the rest of us are going to be paying the costs, we should all get something lasting in return.”

It’s worth knowing Trump is reaching back to a failed 1930 law to whack us. The Great Depression was lengthened, deepened, exported and made far worse because of the Smoot-Hawley tariffs that erected a big wall around America to keep out competition. Section 338 of that law lets president impose a max tax of 50% on imports from countries which ‘discriminate’ against the States.

No new law is needed. No investigation. The president can simply decree it. No vote in Congress. Tariffs can last indefinitely. And this obscure piece of legislation has never before been used. Or tested.

The law may be legally challenged. It might be a negotiating hammer to beat Canada into submission as the trade talks start. Or it could be a new normal for America, financing its own excesses, aggression and the creation of new billionaires by Hoovering other countries and sheltering its own economy.

Dunno. But either we trust Trump to be fair and honest or we unhitch our wagon from the US as fast as possible, as much as reasonable. So, Carney is right. There is no choice.

This week the premiers are meeting in PEI. Guys like Doug Ford are strident about not bowing down to the thug. Unlike Alberta, Ontario won’t be putting American bourbon back on the store shelves. Neither will the others. Appeasement, we’ve all learned, doesn’t appease a bully.

This all sets us up for conflict in Canada. Either we use leverage against Trump’s White House or, like Europe and Japan, we roll over, take the hit and wait for the next blows to land.

Canada has leverage. It’s energy.

We are America’s largest single foreign source, sending almost six million barrels of oil south each day and a staggering 35 terawatts of electricity per year. We put fuel in the F-35 fighter jets and Air Force One. We heat and cool millions of homes. We fuel Hummers and Teslas. We power factories in Michigan and New York. We furnish 100% of American natural gas imports, 81% of imported electric power and a quarter of uranium shipments.

So, what’s the plan? Does Canada threaten to turn off the taps, or keep the power on and beg better?

Alberta’s Danielle Smith quickly said her government won’t join our war. It would be political suicide for her to side with the larger Canadian agenda. Not only has the former oil company lobbyist been happy to rub shoulders with Trump at Mar-a-Lago but a quarter of her political base wants Alberta to join the US. Lacking political conviction, she capitulated and is giving the rebels a pre-sovereignty vote in a few months. Now we all have a problem.

It’s a moment to remember.

Maybe Carney can negotiate his way out of this bag. Maybe not. Trump is growing more extreme as the midterms and the final years of his presidency loom. Perhaps America will become hooked on the narcotic of tariff revenues since it’s easier to suck money out of people’s purchases than their paycheques. Maybe the past has, well, passed. The sooner we can break from the gravitational pull of America, the better. Not quick or easy, but essential. Leverage.

Join the posse, Cowgirl. We ride at dawn.

About the picture: “Going through a tough patch these days and would not survive without my 5 year old Sheltie, Daxx,” writes Tom in Brighton, ON. “A retired show dog, he provides therapy services from first thing in the morning until last thing at night.  Boundless energy and always eager to go for a walk to meet his friends and admirers.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/07/22/leverage-4/