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FIRST READING: Canada where Trump’s 'hardball' strategy failed hardest, says analysis

Washington, not Ottawa, is now backing off the trade war as U.S. midterms approach

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FIRST READING: Canada where Trump’s 'hardball' strategy failed hardest, says analysis Back to video

The basic premise of U.S. President Donald Trump’s trade war on Canada was simple: The massive U.S. economy could dictate favourable terms to a smaller and more dependent neighbour.

Instead, the Canadian economy proved more resilient to U.S. tariffs than almost anyone expected. The Canadian electorate went all-in on a strategy of retaliation. And now, with tariffs threatening several key Senate races in U.S. border states, it’s the Trump White House that is now backing down on some of its Canadian trade barriers.

Add it all together and, according to an analysis published Wednesday by the U.S.-based Council on Foreign Relations, Canada is where Trump’s “hardball” approach to trade has gone sideways the most.

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Trump’s White House confused “economic size with bargaining leverage,” it says. As a result, the U.S. is now “mired in a losing trade war with its economically much smaller and militarily much weaker neighbor to the north.”

The analysis cites the 1977 book Power and Interdependence, which devotes an entire chapter on how, despite its small size, Canada held a curiously large amount of leverage in its past dealings with Washington.

The authors examined 50 years of international disputes between the two countries – ranging from liquor taxes to lumber duties to........

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