Canada faces difficult times ahead.

That reality was the overriding undercurrent at the Vancouver Real Estate Forum last week, where commercial property industry leaders came together with issues like tariffs, the Canadian election, immigration and economic policy at the forefront of their minds. 

Perseverance felt like the main talking point of the two-day event.

David Frum brought a similar message as a keynote speaker at the event.

Frum, the Canadian-American staff writer at The Atlantic, a Republican strategist and former speechwriter for George W. Bush, said there are certain things Canada and its new Prime Minister (Liberal leader Mark Carney received a minority government mandate from Canadians on Monday) should do, and other things Canada should not do when it comes to Donald Trump's chaotic trade war against this country. 

Embrace export taxes instead of countervailing tariffs

Canada’s leadership should resist the powerful urge to retaliate with tariffs against U.S. products that Canadians need, Frum said. Instead, we should be applying export taxes to goods on which Americans depend. 

"Why make Canadians pay more for everything that comes from the United States when you can retaliate instead by imposing export taxes on the selected targets, on selected items that Americans need?" 

Frum said applying export taxes on products like potash, hydroelectricity, oil and gas and wheat would provide strategic pain to the U.S. without causing widespread inflation on prices north of the border. 

It’s the lesser of many evils in a trade war Canada doesn’t want, he noted. 

If the trade war continues long-term, he said Canada will eventually be hit hardest given the disproportionate size of the U.S. economy.

"But the difference between Canada and the United States is that Canada didn't start it,” he said. “Canada doesn't want it, and Canada is fighting for its existence . . . and people fight harder for their existence."

Do raid U.S. talent 

This American government is also at war with its scientific community, Frum said. "There are many scientists in the United States who are anxious and upset."

The Canadian government should start pumping funds into universities and labs to boost innovation, while drawing experts into this country to pursue their research and development, he said. 

Don’t increase government control over the economy 

It’s tempting for Canadians to react emotionally to the tariffs by becoming more narrowly nationalistic and leaning more into state-led economic policy akin to the 1970s, Frum said. 

It’s important to guard against government overreach in response to this crisis, he said.

"Do not allow voices of control and direction and state monopoly . . . to overwhelm the creative energies of Canadian people and creative energies of Canadian business that can make the wealth that allows governments to afford to do the things that government should do."

Don’t negotiate too quickly

"The last piece of advice I would give the Canadian government is not to negotiate too fast," Frum said. "Do not be quick to return to the table."

He said Trump is already showing signs of eagerness to start making deals after creating chaos in previous weeks and months, especially with China. 

Turbulence and drops in the stock market, coupled with lost confidence in U.S. bonds, portend a dark outlook for the U.S. economy and the pain of this trade war hasn’t even been felt yet by consumers and workers.

As in 2018, Trump has put himself in a scramble to sign deals as the reality of his executive decisions start to sink in for Americans facing higher prices, weaker investments, rising inflation and potential goods shortages. 

We’re already seeing that play out.

For instance, the Globe and Mail reported Friday that the U.S. auto industry, including the Detroit 3 automakers, sent a letter dated April 21 to the Trump administration, calling for the reversal of import taxes on auto parts, warning it will drive up prices for buyers, destroy supply chains and cause layoffs.

"The consequences will arrive… and no one should be in haste to bring this to an end, because it's important not just to end the current trade war, but to break this pattern," Frum said. 

Ultimately, he said breaking this cycle will rely on Congress reasserting its constitutional control over trade and tariffs, but Canadians can be sure to achieve a much better trade deal with the U.S. after Americans start to feel real pain of Trump's decisions.