Republished with permission from Thom Hartmann

Late Friday night, trade talks with Canada collapsed when Prime Minister Mark Carney—the former president of both the Bank of Canada and the Bank of England, a guy whose knowledge of economics and history makes Scott Bessent’s bleatings sound pathetic—said he was tired of Trump bullying his country. He was blunt about the scam Trump’s trade people tried to run on Canada, saying, simply:

“We were attacked.”

And they were. As Dean Blundell documents, Trump was demanding of Canada:

• Control over who Canada trades with.
• Control over Canada’s use of the French language.
• Control over Canadian-made cars.
• Control over what goods the Canadian government buys for its own use.
• And the ability to re-impose tariffs against Canada any time Trump gets irritated, for any reason.

That midnight, in retaliation for Carney refusing to bow to Emperor Trump, the US imposed fifty percent tariffs on about twenty billion dollars’ worth of Canadian goods destined for American consumers.

Young families are being crushed by Trump’s existing tariff inflation, but he made sure that the morbidly rich got their wavers.

Trump exempted items where there are major lobbyists in DC spiffing GOP legislators (fossil fuels, electricity, potash, fish, and critical minerals), leaving the price increases Americans will pay on things the lobbyists don’t care about or would just as soon have tariffed (cars, liquor, dairy, cement, plywood, furniture, clothing, fishing rods, swimming pools, and hockey sticks).

As a result, history, it appears, may be on the verge of repeating itself.

In the last year of Biden’s presidency while Trump was running for a second term, he told Lou Dobbs:

“We have an economy that’s so fragile…. And when there’s a crash—I hope it’s going to be during this next 12 months because I don’t want to be Herbert Hoover. The one president I just don’t want to be, Herbert Hoover.”

Say hello to Donald Herbert Hoover Trump. Carney is hitting back with “dollar-for-dollar” reciprocal tariffs, effective in two weeks (September 8th).

Arguably the worst thing Republican President Herbert Hoover did after the stock market crashed on his watch in 1929 and the country slid into the Republican Great Depression over the next three years was signing the Smoot-Hawley tariff legislation.

Most Americans know virtually nothing about Smoot-Hawley other than a vague—and negative—familiarity with the name, mostly because since Hoover left office no American president has used the most dangerous of its provisions. That negative familiarity is probably why Trump’s people are referring to it as “the Tariff Act of 1930.”

When Congress passed it that year, 1,028 top American economists signed a public petition begging President Hoover to veto it, warning it would deepen the Depression. The most powerful banker in America at that time, Thomas Lamont, told a reporter that he almost went down on his knees begging Hoover to kill the thing.

But Hoover caved to his corrupt Party’s demands and the first nation to retaliate was Canada, hitting 16 categories of goods that made up about 30 percent of all of our exports to that country. Trade across the world collapsed by fully two-thirds between 1929 and 1934, and a third of America ended up unemployed as people’s savings were wiped out in bank failure after bank failure all across the country.

When the Supreme Court pointed out that under our Constitution only Congress could authorize tariffs, Trump went looking for old or obscure laws Congress had passed that give the president unilateral tariff authority. He found a doozie in Section 338 of Smoot-Hawley, a provision of that archaic law that—it’s worth emphasizing—no president has used since Hoover.

Section 338 isn’t really even a conventional tariff authorization. If normal tariffs were a hammer to fix trade disputes, Section 338 is a nuclear weapon: it authorizes the president, upon finding and declaring that a foreign country is “discriminating” against American goods, to hit the offending country with a massive 50% tariff and even pull foreign goods off store shelves. As the National Law Review notes:

“If the President determines that the discrimination continues or escalates, he may exclude the country’s products from importation entirely—an embargo power backed by forfeiture of goods imported in violation of the embargo. Proclamations may be suspended, revoked, or amended by the president at any time.”

The word “discrimination” is not defined in the law, so it means whatever Trump says it means, and there are no provisions in this section of the law for any agency or Congress to participate: it’s all in the president’s hands. No investigations needed, no hearings, no Congress, no agency participation. It confers a king-like power.

And that level of overkill is exactly why it’s been on the books for 96 years and not one president since Hoover has ever used that section. Until now.

Back in 1935, FDR’s Tariff Commission ruled that Germany and Australia were “discriminating” against American goods, but Roosevelt wasn’t crazy enough to try invoking Section 338. There are records of the State Department discussing using it against the Japanese before WWII and there’s a 1949 telegram from Dean Acheson wondering out loud if it should be used against China, but that’s it. In the past 77 years, nobody in government has, as anybody can determine, even thought about being stupid enough to use it.

In my book The Hidden History of Neoliberalism: How Reaganism Gutted America, I shared the history of Alexander Hamilton’s Report on American Manufactures recommending tariffs to President Washington to both fund the government and defend American manufacturing. Washington asked Congress to put them into place and some endure to this day.

But both men—and every president since, except Trump—understood the simple reality that no company and no wealthy industrialist is going to build a factory in America because of a tariff put on the goods he wants to make by an erratic president. Before anybody puts hundreds of millions or billions into land and buildings and machinery, they want to know that Congress has passed a protective tariff, so it’ll be there for the decades it’ll take to recoup their investment.

Trump, on the other hand, has been using tariffs to basically extort gifts and hundreds of millions of dollars out of everybody from Apple’s Tim Cook to the royal family of Abu Dhabi who threw about a half-billion into Trump’s crypto company, most of which ended up in his pocket. Cook got a tariff exemption for Apple in exchange for his gold bar, and Abu Dhabi got high-tech AI chips that had been banned because of their mutual-defense treaty with China.

The Associated Press dug into Trump’s tariff scam and discovered that when Trump or his boys got what they wanted, the tariffs went away, including advanced tech for Qatar and tariff relief for Vietnam. Efforts by Democrats in Congress—most notably Jeff Merkley and Elizabeth Warren—to investigate this naked corruption and similar foreign kickbacks have been systematically blocked by Republicans Mike Johnson in the House and John Thune in the Senate.

Back in 1932, Canada fought back against Hoover’s Smoot-Hawley tariffs by convening that year the Imperial Economic Conference and working out a deal with Great Britain called “Imperial Preference”—a sort of most-favored-nation status—to trade with each other with only minimal tariffs that helped both countries mitigate the damage from the Republican Great Depression. It took President Roosevelt’s efforts to re-normalize our trade relations with either.

Carney, being a student of history (unlike Trump), is following in his predecessors’ footsteps. He announced that the era of America’s global economic leadership is over, created a $25 billion sovereign wealth fund, signed a trade agreement with China, backed a Canada-led defense and resilience bank, started talking seriously about a joint EU and CPTPP trade bloc, and just joined the EU’s SAFE defense financing instrument.

For their part, the EU just provisionally activated its Mercosur agreement and finalized a new free trade deal with India to replace American goods including tech and pharma. And the NATO countries are increasingly planning to defend themselves without us, another international disaster that could easily foreshadow a Trump-caused WWIII.

Basically, the world is rearranging their trade to cut America out because Trump is so erratic and irrational. And the main beneficiary of this destruction of America’s economic power and the impoverishment of the American middle class is Vladimir Putin, who’s openly wanted a weaker, less capable, and poorer America for decades.

Canada was our second largest trading partner and their soldiers have fought beside ours in every major conflict of the last century or this until Trump began bombing countries and killing fishermen in small boats. Their diplomats hid six Americans in their embassy in Tehran in 1979 and smuggled them out with Canadian passports. In just the first half of this year, our trade with Canada has totaled over $375 billion.

But man-baby Trump doesn’t care: Mark Carney had the temerity to call him out and make him look like a fool, so he’ll punish us all just to get his petty revenge. Vengeance, after all, is the oxygen he breathes, consequences for others be damned.

House Democrats have introduced the Repealing Outdated and Unilateral Tariff Authorities Act, which would strip Section 338 out of American law entirely. Call the Capitol Switchboard at 202-224-3121 and demand that your representative and both senators cosponsor it, even if they’re Republicans.

Especially if they’re Republicans, in fact. In 1987, President Reagan gave a radio address pointing out that tariff-based trade wars shrink markets and throw millions out of their jobs. Ontario’s Premiere Doug Ford turned it into an ad that so pissed off Trump that he slapped a new unilateral tariff on Canada.

It’s clear that Trump doesn’t care if we slide into another Republican Great Depression, and, as I’ve written before, such events are seen by the morbidly rich as wonderful opportunities because they can buy up everything that’s not nailed down for pennies on the dollar. Some of America’s biggest fortunes were made during economic crises.

So the job of preventing it falls to us.