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David Frum (0:38)
Payment of $45 for three month plan. $15 per month equivalent required. New customer offer first three months only, then full price plan options available, taxes and fees extra. See mint mobile.com hello and welcome back to the David Frum Show. David, I'm David Frum, a staff writer at the Atlantic, and I'm grateful that you would join us again this second week of the program. This week my guest will be Ontario Premier Doug Ford. Now, I should make clear, if anyone doesn't know it, I too am a Canadian and an Ontarian, both by birth, and I still spend a lot of time there. I'm going to be speaking to the premier about the sense of shock and dismay that Canadians have felt about Donald Trump's threats, not only to the trade arrangement between Canada and the United States, but his demands that Canada be annexed to the United States. You know, the Trump people, when they're trying to justify the economic policy that has sent world financial markets into such chaos over the past weeks, try to present this as some kind of confrontation with China alone because they don't like to admit to Americans that they are waging a trade war against the entire planet. This is not an anti China campaign. This is an anti everybody campaign. And it's a campaign in which America has almost literally no allies, except maybe El Salvador. And the trade war began with attacks on Canada, supposedly and historically America's closest neighbor and ally. You would think if you were trying to build an anti China coalition, you would start by consolidating the North American heartland, especially the U.S. canada relationship. But that's exactly the opposite of what has happened. I'll be talking to the premier about that, how Canadians feel about it. Not so much the facts and figures of the relationship, enormous as it is, but what it has been like for Canadians to be on the receiving end of threats of annexation, threats of violence and this unrelenting campaign of tariffs and harassment, which has not been paused, of all the tariffs against China, paused and unpause. But those against Canada have remained consistently in place from the very beginning of the Trump administration. It's bizarre, it's shocking, it's upsetting, and that's we're going to talk about this week on the David Frum Show. After the interview, I will be discussing and answering some reader questions. But first, some opening thoughts on the events of the past week. When Donald Trump and those around them want to demean or dismiss some opponent, some critic, they sometimes use the phrase he doesn't have the cards. They said that about Vladimir Zelensky and the Ukrainian people's resistance to Russian aggression. They've said it about Canada and other trading partners. The implication is that the other person is too weak, too insignificant to be worthy of respect. But there's another implication, too, which is that the United States and the Trump administration does have the cards, is so mighty and fearsome that others must give way. Now, the United States is obviously a very powerful nation with a lot of sources of command and control, but it is important to understand that, in fact, Donald Trump doesn't have the cards that he thinks he does. And that's one of the reasons that this campaign of economic aggression he's launched, not against China, but against the whole planet. Every country, just about almost every trading nation, is coming amiss and will likely end in failure and even disaster. Supposing. Let's just take Donald Trump seriously for a moment. He doesn't deserve it, but let's just for our own sakes, do it. Supposing a president of the United States came to office and said, you know what? My top priority is going to be reshoring manufacturing in the United States. I personally don't agree that this should be anybody's top priority. But let's supposing it were a president's top priority. Reshoring, manufacturing. That's what Donald Trump says he wants to do. How would you go about it? Well, first you would admit to yourself, if to no one else, that you are proposing a very ambitious and expensive task, one that will involve a lot of dislocation. So you'd face up to that and you would try to build some kind of political consensus in favor of the bumpy, difficult path you were proposing for the nation. You would maximize your friends at home. You would reach out to other parties. You would not behave in an arrogant way that had a lot of people hoping for your failure, and you would not Start committing all kinds of other offenses and even crimes that put you in all kinds of precarious positions where anything went wrong. And your whole program would be, would come a cropper. You would understand you were doing something that was not easy, was not going to be fast, was going to be costly, was going to impose significant hardship on many people. You'd work with allies, you'd build a large coalition, because you are going to need, even if, as you're shrinking your supply chains to move things away from China, you're still going to need various kinds of inputs from other countries, raw materials, if nothing else. And you'd want to make sure that as many countries as possible were sympathetic to what you were doing, rather than wishing that you would fail and fearing what your. Your aggression. You certainly wouldn't open campaigns of territorial aggression against neighbors and allies. You wouldn't say, we're going to annex Greenland from Denmark and we're going to try to conquer Canada and make it a 51st state. You wouldn't do any of those things. You would also understand the relationship between your financial program and your economic program. This is a little technical, but it's really important to grasp. The reason the United States has such a big trade deficit is exactly and precisely because the United States imports so much capital from other countries. The current account and the capital account to give them their technical names have to move together. So one reason the United States has had such an expansion of its trade deficit in recent years is first that the United States is importing so much capital in the form of private investment. People are buying into American companies, which is a good thing. But it's also because the United States has run huge budget deficits. So foreigners buy a lot of American debt because there's a lot of American debt to buy. A first step, and an indispensable step towards shrinking your trade deficit is to shrink your budget deficit. So you would have a fiscal plan that worked in parallel to your trade plan, your economic plan. Whereas instead of as Donald Trump has done exactly the opposite, his plan is to make the deficit bigger on a fantasy that with enough tariffs, he can make the trade deficit smaller. And that's not going to work. You would level with people. You would not promise people quick and easy success. The hardships that have come and are to come are going to arrive and are arriving as a total surprise to Americans. They were promised that this was going to be quick and easy. People in the Trump administration are still promising that the stock market will go up any day soon. Not understanding you Know what? Reshoring all this manufacturing, it's going to dislocate a lot of arrangements. A lot of businesses are going to close, a lot of people are going to lose their jobs. Maybe they'll find new ones. Conceivably, I don't believe it, but conceivably the new ones will be better paid. Probably not. But if you think it's sort of more manly for Americans to work with their hands in factories than to work in offices or in service jobs, if you think that that is going to fortify the character of the country and the economic sacrifice is worth it, don't go promising people that they're going to be better off because it's not true. And they will notice and they will be mad and they will notice soon. Don't also say that your goal here is the strengthening of the American family. One of the things we know about families is they tend to come apart in times of economic distress, especially the non college educated. During a recession, rates of divorce go up, rates of childbirth go down. If those are your top priorities, understand that they conflict with the other top priority of reorganizing the entire American economy. Don't also make a lot of appeals to freedom, because a top down reorganization of the American economy is many things, but a free market project it is not. It is an act of state control of state assertion of central planning. Someone has grimly joked of central planning without a plan. But there's a notion, there's a concept that the people at the top, the people with authority, think that a certain way of organizing the economy would be better than other ways. And they're going to use the power of the state to enforce their vision. So you have to drop all this talk about economic freedom, because that's not what we're doing. Economic freedom belongs to those who are free traders. With the reorientation of the economy toward manufacturing, you're committing to the tariff regime, which is highly intrusive. You're committing to probably with various kinds of retraining programs. You're committing to state subsidies at a minimum to buy off the farmers, but state subsidies in other industries too. And ultimately, if you're not going to have a shrunken budget deficit and you're going to do the tariffs and you're going to try to reshore manufacturing, sooner or later you're going to discover yourself needing some kind of capital or exchange control to control the flow of money in and out of your country. So this is a big old fashioned wartime economy project. Not at all. A free Market one. And you'd better acknowledge that to yourself. Now, instead, what has happened is that Trump has presented this in a way that is so false, so deceptive, that the story is going to unravel faster than he can deliver any conceivable benefit, never mind net benefit, but any benefit at all. And so what he's going to discover is he's doing this all with bluff. He doesn't have the cards. His promise of easy, cheap success, well, it comes naturally to him because he's kind of a flim flam artist and all his life he has bilked people who have trusted him. In this case, he is trying to build a whole nation. But I really, I don't worry about this because as I say, I don't wish any of this project well. I think the whole project is ill conceived, even if it were an honest project, and it's not honest. But I think he has begun this project by lying even to himself about how easy it's going to be, how fast it's going to be, how remunerative it's going to be. And I think what we all smell coming from this administration in the light of the unraveling of self deception is the smell of panic. And this is the whole thing. This is the thing. I think that the whole world, and especially the Chinese, who are supposedly the targets of the Trump program, are smelling, they're smelling panic, they're smelling fear, they're smelling imminent defeat. You know, the United States was sold this project as a way of reaffirming American power and greatness. In fact, we are, what, witnessing not just a crisis of the American economy, but a crisis of American power that all kinds of other resources of the American state, the good name, the credibility, the alliance system, all these things are also in danger right now. And we are going to find ourselves at the end of this Trump program, which may be coming faster than anyone believes. This whole thing may collapse quite quickly, but when it does collapse, it's going to be hard to put together a second plan. It's going to be hard to persuade countries that have been targeted by the tariffs, the countries that have been threatened with aggression, the countries that have been abandoned, that the United States has repented and will do better. And I'm not thinking here just about close American friends, but about a country like Vietnam, which is a historic enemy of China, which welcomed the opening of an economic tie to the United States as a way to afford it, both to enrich themselves and also to give them some leverage against their powerful neighbor. They are now thinking, as nasty as the Chinese are, they may be more reliable. And we are seeing a revival of high level visits between Vietnam and China in a way that is going to be very hard to undo. Authoritarian states like Vietnam have a lot of policy continuity. Once they settle on something, it comes out of a big bureaucratic process of decision. But once they settle on it, that becomes the new plan. And if they've become convinced that the United States under Donald Trump, but the United States generally is not a reliable partner, that's not something they're going to change their mind about. When the United States say, oops, sorry, it didn't work out, we didn't hit the Dow 50,000 target the people Peter Navarro promised, we're rethinking this. We're going to try something else. We've got to pause. We've got an unpause, then we're pausing again, then unpausing again. Through all of this, the United States is going to find itself in worse and worse shape. And now my interview with Ontario Premier Doug Ford. After that, I'll be answering questions from viewers and listeners. Please remember to like and subscribe to the David Frum Show. But first, a quick break.