Trump faces 'rude awakening' as Americans suffer for his 'bruised ego'

U.S. President Donald Trump continued to escalate his trade war with Canada when he announced that effective September 29, some Canadian products — including alcohol and certain motorcycles and dairy products — will be banned from the United States. And according to liberal economist Paul Krugman, the damage from Trump's "idiotic trade war" will be even worse than what is being reported.

"There have been many trade conflicts in history, some of them more destructive than the U.S.-Canada fight," Krugman writes in his Substack column. "But I don't think there has ever been a dispute this stupid. Bear in mind that this crisis is entirely gratuitous. Canada has done nothing wrong. Even if one buys into Trumpian nonsense about how every nation that sells us more than it buys is ripping us off, Canada isn't a villain. Last year, Canada did run a modest trade surplus with the United States in goods, but more than half of this imbalance was offset by a U.S. surplus in services. Overall, trade between our nations was almost balanced."

Krugman lays out some key reasons why "an escalating trade war with Canada" will "do real damage to the U.S. economy" as well as to the Canadian economy.

"The essential thing to understand about U.S.-Canada trade is that our two economies have been closely integrated for a very long time," Krugman explains. "We've had free trade in autos and automotive products since 1965. We signed an overall free trade agreement in 1988, six years before the creation of NAFTA (the North America Free Trade Agreement), which included Mexico. And all those decades of free trade have encouraged a great deal of specialization."

Canada, according to Krugman, "supplies a surprisingly large share of many crucial goods."

"Canada provides 70 percent of the oil refined in the U.S. Midwest," the former New York Times columnist notes. "Canada supplies about 60 percent of U.S. aluminum. Canada supplies almost all of America's spruce-pine-fir lumber — preferred for framing in residential construction … In short, if Trump, (Treasury Secretary Scott) Bessent and company think that trade conflict with Canada is a trivial issue, one that Americans will barely notice, they're in for a rude awakening … But Canadians understand why they are being asked to suffer this pain: They are defending their sovereignty and their national identity. Will Americans be willing to suffer economically to soothe Trump's bruised ego?"