Midterms and Trade Wars: A Test of Trump’s Resolve

The US midterm elections have injected uncertainty into the trade war between the US and Canada. Some Democratic politicians believe a strong showing for their party will translate into more effective oversight of President Trump’s tariffs agenda, potentially countering his expansive use of Section 338 to impose duties without Congressional approval.

Arizona Senator Ruben Gallego argued on Rosemary Barton Live that winning the midterms would send a message to the White House and Republicans that tariffs on close allies like Canada are unacceptable. He framed this as a tax on unnecessary goods, highlighting the economic costs of Trump’s protectionist policies. Specifically, Gallego is concerned about the impact on Arizona’s aerospace manufacturing sector, which relies on Canadian steel and aluminum.

The tariffs war is not just about economics; it’s also about politics. By using Section 338, Trump has sidestepped Congressional oversight, allowing him to unilaterally impose duties without checks or balances. The Republican-controlled Congress facilitated this move by giving Trump wide latitude to pursue his tariffs agenda. Now, some Democrats are trying to capitalize on growing anti-Trump sentiment over the economy.

Maine Governor Janet Mills echoed Gallego’s sentiments, suggesting that a Democratic win in both chambers would allow Congress to reclaim its authority over taxation and tariffs. However, this may be an optimistic assessment. The legal mechanism behind Section 338 is rooted in the Tariff Act of 1930, which has been used by previous presidents without significant Congressional interference.

Manufacturing growth in the US remains modest, with elevated energy costs and tariff-related pressures limiting its expansion, according to a report from TD Bank. Canada’s counter-tariffs on $27.6 billion worth of American goods have also taken effect, further straining trade relations. The economic stakes are high, with both sides digging in for what may be a long-term standoff.

As negotiations stall, commentators suggest that the US and Canada need a third-party facilitator to sit down and hammer out a deal. However, any such agreement would require concessions from Trump on tariffs or compromises from Canada on its supply management system.

Trump’s next move is set to ban the import of Canadian alcohol, motorcycles, and other products into the US beginning September 29. This escalation will likely have significant economic implications for both countries. With midterms looming, it’s anyone’s guess whether this will be a turning point in the trade war or just another chapter in the ongoing saga.

The outcome of the midterms will have far-reaching consequences for US-Canada relations and the global economy as a whole. Diplomacy is not about bending at the knee or giving in; it’s about finding mutually beneficial solutions through careful negotiation.