In its Proclamation announcing the new tariffs, the administration claimed that Canada’s 25% tariff on U.S. autos and auto parts—enacted days after Trump’s April 2, 2025 “Liberation Day” Executive Order announcing new U.S. tariffs on Canada and virtually every other country in the world—unfairly discriminates against the American auto industry, thus “disadvantaging the commerce of the United States compared to the commerce of other countries.”
In support of this view, the administration claims that Canadian imports of U.S. autos “fell precipitously” by more than $5 billion, or “approximately 22%,” while Canada’s imports from Mexico, Japan, Korea, and Germany increased by nearly $3 billion.
A closer look at actual trade flows tells a different story, however. As the chart below shows, Canadian imports of U.S. autos historically have far exceeded those from the other listed countries. Since April 2025, Canada’s auto imports from the other countries have increased slightly or stayed the same, while Canada’s imports of U.S. autos have bounced around, falling sharply late last year, rebounding sharply during the first quarter of this year, then trending downward again—ending up, most recently, around the level they were in April ’25.
Moreover, it’s not clear that the tariffs are the cause of the modest decline in American auto exports to Canada. A more likely explanation is that Canadians, like Americans, are holding on to their existing cars longer, resulting in fewer new car purchases overall, which would affect both U.S. and foreign imports.
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Canada’s tariffs may harm the Canadian economy, but they’re not harming America’s—at least not the auto sector, which is the focus of the administration’s Section 338 retaliatory action.
The announced new U.S. tariffs on Canada are responding to a problem that American tariffs started. Trying to get back at Canada with new tariffs because Canada is trying to get back at America for the tariffs we unilaterally imposed is a fool’s errand. A tariff war with Canada is another potential U.S. war with no winner and no end. But there are likely losers: U.S. and Canadian consumers and the U.S. and Canadian economies.
For eight decades, the U.S. led the world toward open markets and open trade. In barely two years, Trump has transformed it into effectively the most protectionist major advanced economy. The result has not been a manufacturing renaissance. It has been higher prices, weaker investment, fewer manufacturing jobs — and a government increasingly willing to make falsehood official policy in order to defend a failed economic creed.
The grandeur of the Roman Empire was built on the aggregation of wealth. Using its superior military organization, Rome conquered its neighbors, took their gold and silver and sold their populations into slavery. When the empire ran out of neighbors, the Roman economy began to falter.
Today America is in the midst of the greatest epoch of wealth creation the world has ever known. Our history is one of innovation, and we are all richer because of it.
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Billionaires don’t keep their wealth locked in Scrooge McDuck-style money bins. They invest it in ever more wealth-creating enterprises.
Capital and labor are the two fundamental inputs into an economy. Many on the left, unable to distinguish between wealth aggregation and wealth creation, want to tax wealth heavily, which would reduce the available capital needed to make the economy grow. If there was ever a prime example of ideology blinding people to reality, this is it.
[DBx: Gordon should have instead written: “Entrepreneurial innovation is the fundamental input into an economy.” This revised claim is more consistent than is his own claim with his essay. Yes, entrepreneurs require capital and labor to put their ideas into action, just as they require gravity and oxygen and temperate climates. Yes, also, capital and labor contribute at the margin to wealth creation, which is why capital and labor earn returns. But all societies, even hunter-gatherer ones, used capital and labor. Today’s enormous productivity of capital and labor is due to entrepreneurial innovation. See the work of Deirdre McCloskey and of Julian Simon.]
A friend recently observed that many young, relatively affluent people in his New York City neighborhood—which voted heavily for Zohran Mamdani—dress like hobos and sport Carhartt workwear. Call it socialist chic. The sartorial style is also an apt metaphor for patrician progressives who feign solidarity with the proletariat.
Consider Abdul El-Sayed, the left-wing front-runner in Michigan’s Democratic Senate primary this Tuesday. Mr. El-Sayed has surged to the lead against Rep. Haley Stevens by presenting himself as a man of the people. He has called for free child care, “Medicare for all” and an 8% wealth tax on billionaires.
“I don’t think that our system should be in the business of creating billionaires,” he said during a March debate. “I think our system should be in the business of empowering everyday folks to be able to live a life with access to the basic dignities that they need and deserve, good housing, good healthcare, affordable food.”
Nobody can disagree with the latter goals. But Mr. El-Sayed’s prescriptions to achieve them would expand government control of healthcare and the private economy and exacerbate the socioeconomic inequalities he inveighs against.
David Bahnsen writes wisely about the recent spate of writing and talking about “the common good.” A slice:
The issue is not whether or not absolute standards of right and wrong exist (they do), and the issue is not whether or not the state has a role (it does). Any belief that the state ought to punish criminals and defend national security is a claim on the state’s promotion and defense of what some would call the common good. The issue is on where the lines are to be drawn and what the limiting principles are. Conservatives who loathe post-liberalism (like yours truly) recognize Kuyperian sphere sovereignty — where the primary institutional responsibility for civil society lies with the family, with church, and with robust communities. Asking the federal government to take on the role of common-good morality, manners, and virtues is a grotesque violation of jurisdiction and suitable silo. Using common-good language to rationalize some state intervention in the marketplace must contain a limiting principle, or it is better referred to by its other name: rank statism.
Also writing wisely about the common good is National Review‘s Dan McLaughlin. Two slices:
One of the problems with the common good as a standard is its vagueness. Does it mean that laws should have a moral basis? If so, that just restates reality: virtually all law is grounded in moral judgments about what is right, wrong, fair, unfair, just, unjust, etc. Does it mean that laws should aim to improve the morals of the people? That’s a very different question, and one that raises serious questions about the limits of the competence of government: government can do a lot to degrade the morals of the governed but has only limited power to improve them. That’s to say nothing of the difficulty of defining what kinds of morality are supported by a sufficient consensus to justify backing them with governmental force.
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The Founding Fathers understood the difficulty of defining this sort of thing. That’s why they used general terms like “establish Justice” and “promote the general Welfare” when describing the goals of government in the Constitution’s preamble, but avoided those terms when actually defining the powers of government.
We all want something that looks or sounds like the common good. But, like common sense, it’s easier to invoke as an aspiration than to define as a standard. Which means that instead of helping us sharpen our thinking, it often conceals more than it elucidates.
Paul Vaughn makes clear that many progressives are eager to weaponize government power to enforce their ideology. Two slices:
On a quiet October morning in 2022, my life changed forever. Agents of the Federal Bureau of Investigation pounded on my front door and arrested me at gunpoint in front of my wife and children. Last week, my life changed again.
After years of legal battles to clear my name, my family has reached a settlement with the government concerning the weaponization of power against us and the harm it inflicted. This settlement comes on the heels of a landmark Justice Department report that confirms what my attorneys at the Thomas More Society argued from the beginning: What happened to me wasn’t an accident or an overzealous mistake but a coordinated campaign against pro-life advocates like me.
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A Christian should be able to stand on a public sidewalk or in a building open to the public, pray quietly, peacefully share the pro-life message, and go home to his family without fear that a federal task force is building a file on him and taking cues from an abortion industry lobby.
That isn’t a radical request. I pray this marks a turning point—for pro-life Christians and for every American who believes that justice must be blind and speaking the truth isn’t a crime.
Matthew Continetti praises the late, great Milton Friedman. A slice:
Critiquing Friedman is a bipartisan trend. Recently, Vice President JD Vance told the Daily Wire’s Michael Knowles that, “American economic policy on the right is now much more Alexander Hamilton than it is Milton Friedman. I think that’s obviously a good thing.”
Obviously?
Leave aside the fact that current economic policy is neither Hamilton’s nor Friedman’s—it’s President Trump’s. Concentrate instead on the policy’s ambiguous results. Inflation remains above the Federal Reserve’s 2% target. Real wage growth has been lackluster. Overall manufacturing employment is down since January 2025. Furthermore, Mr. Trump’s economic agenda is unpopular. The public rejects tariffs.
It gives Mr. Trump poor marks on the economy and inflation. If this is the alternative to Friedman, it isn’t working.
Mr. Vance also told Mr. Knowles that, “Milton Friedman’s ideas made more sense in the 1980s because they were being advocated in a country that still had a very rich and powerful institutional Christianity.” Yet Friedman’s ideas—that government should secure rights and allow free people to trade with minimal interference—make sense regardless of social or historical context. They’re based on empirical data and the law of supply and demand. A rich and powerful institutional Christianity wasn’t behind Hong Kong’s or India’s prosperity, for instance. Their growth was the result of falling barriers to savings, investment and trade.
True, Friedman had little to say about culture. For him, people and nongovernmental associations such as families, churches and communities were the best transmitters of moral values. But his lack of interest in social questions doesn’t undermine his insights into economics. And no one is asking policymakers to become die-hard libertarians. Just a little Friedman would go a long way.
