Canada/U.S. Trade War?

We have been following the developments surrounding the "Buy American" policy of the United States with some interest. The return of aggressively nationalistic protectionism to U.S. policy is a very serious affair: the U.S. is presently the world's largest economy, and even as it shrinks it still is a disproportionate slice of the pie, if you will. When the number one economy puts up trade barriers, things will not be pretty.

As could be expected, Canada - as the U.S.'s single largest trading partner - would be the most affected, and quickest to notice. Indeed, notice Canada has: the Federation of Canadian Municipalities recently passed a resolution "to bar bids from companies whose countries impose trade restrictions with Canada." The FCM also voted to refrain from action for 120 days, but this is definitely a return salvo in a burgeoning trade war between Canada and the U.S.

It remains our opinion that integration with Canada is the U.S.'s best hope for economic salvation. If instead the U.S. insists on fomenting a trade war, it will likely only insure a very disastrous economic squabble. Although at present Canada needs the U.S. more than the U.S. needs Canada, a trade war will force Canada to rather more quickly cultivate trade with other nations. This will inevitably leave the U.S. bereft of the assets of its closest neighbour, and merely heir to a gutted industrial base (and collapsed banking industry, and a bankrupt Federal Government, and defaulted State Governments, and a grossly devalued currency, et cetera).