President Donald Trump meeting with Canadian Prime Minister Mark Carney in the White House on May 6, 2025 (Official White House Photo by Gabriel B Kotico/Flickr)
President Donald Trump's hostile new trade war has been ranked among his "dumbest" ideas, and now, an economist writing for The Hill has warned of the ways that it could blow up in his face beyond the realm of economics.
Nicholas Sargen is a Ph.D. economist and international economic consultant who also serves as a senior fellow at the Center for Financial Stability and has given lectures at the Darden School of Business. On Sunday, he published a new op-ed for The Hill, breaking down the swiftly escalating trade war between the U.S. and Canada.
"The collapse of bilateral trade negotiations between the U.S. and Canada in late August has set off an escalation in tariffs that will be difficult to resolve," Sargen explained. "After the U.S. imposed a 50 percent tariff on a long list of Canadian goods through the never used Section 338 of the Tariff Act of 1930, Canada followed with a 50 percent tariff on U.S. goods last week that will match the U.S. tariffs dollar for dollar. Most observers are perplexed by what happened, considering the two parties were close to reaching an agreement. Some are still hopeful the dispute can be resolved, but no resolution is in sight, and President Trump has announced a ban on certain goods from Canada."
Trump's newest moves against Canada, once the country's closest trade partner, have left observers stumped as to what he could possibly be trying to get. Some suggested that he was attempting to use tariffs to gain more leverage over Canada in order to negotiate better terms under the United States-Mexico-Canada Agreement, something that his Trade Representative Jamieson Greer said was a top priority.
"Beyond this, Trump is using tariffs to bludgeon America’s allies on issues that are unrelated to trade," Sargen explained further. "Canada has shouldered a disproportionate burden, because [Prime Minister Mark] Carney is willing to stand up to him. The Wall Street Journal editorial board has labeled Trump’s fight with Canada 'The Dumbest Trade War in History.'”
Beyond the economic ramifications, which Sargen conceded would be more painful for Canada, he also broke down the broader ways in which Trump's push could backfire.
"A Vox commentary, however, suggests that whatever Trump’s Canada fixation is, he seems willing to jeopardize his party’s Senate majority to get it," Sargen wrote. "This suggests a stalemate could continue until after the U.S. midterm elections. If so, the toll the trade war takes on both countries could increase over time."
He added: "Even more concerning is the prospect that the North America alliance could weaken while NATO also faces increasing strains. The European Union reportedly is studying the tactics Canada is deploying in the event trade tensions with the U.S. heighten. Meanwhile, Bloomberg reports that the EU and Canada are forging a new, all-encompassing relationship ranging from trade to security, as they seek to build a new alliance to offset the influence of the two superpowers, the U.S. and China."
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