How do you negotiate a trade agreement with a president for whom facts don't matter?: Neil Macdonald

Ultimately, it doesn't matter how big the crowd was at Donald Trump's inauguration, although, for the record, I was at Obama's in 2009, and I remember the National Mall being so packed it felt almost dangerous. I was in D.C. again for Trump's last weekend, and the crowd was comfortably thin – even sparse.

Anyway, Trump might sulk and whinge about reporters doing their jobs properly, reporting facts and broadcasting pictures he doesn't like, but Donald Trump is still president of the United States, and he's promising – threatening – to do some pretty radical things. That — not his self-declared war with the "lying, dishonest media" — is what counts.

He has, for example, made it clear he intends to withdraw from the North American Free Trade Agreement if Canada and Mexico don't agree to its renegotiation.

• How NAFTA renegotiations might unfold

Prime Minister Justin Trudeau and his ambassador to the United States, David MacNaughton, have responded gamely; Canada, both men have said, is "more than happy" to talk about a renegotiation, if it can lead to better terms for Canada and the U.S.

Well, this is just a guess, but the America-firster now in the White House probably doesn't plan on offering anybody better terms.

One suspects the Trudeau government understands that, despite its public nonchalance.

Already, Trudeau's senior aides have recruited former prime minister Brian Mulroney, a personal acquaintance of President Trump, and have met in private with Stephen Bannon and Jared Kushner, Trump's most powerful aides (the latter is also his son-in-law), trying to explain the deep integration of the Canadian and American economies.

One need only glance at the website of the U.S. Trade Representative to see the status quo Trump wants to renegotiate.

In 2015, two-way trade in goods and services between Canada and the United States totalled $662.7 billion. Of that, $337 billion, more than half, was American exports to Canada.

Canada is the single largest market for American goods. They sell us more than we sell them.

Further, according to the U.S. Department of Commerce, exports to Canada supported 1.7 million American jobs in 2014, a figure that has no doubt risen since.

A senior Canadian official in Washington, speaking off the record, says he's met with Wilbur Ross, Trump's pick for commerce secretary, and came away convinced Ross "gets it."

"This is a smart guy."

And Stephen Schwarzman, a senior Trump economic adviser, said this week that, "There may be some modifications, but basically, things should go well for Canada … it's a model for how trade relations should be, it's a positive sum game. Canada is well-positioned."

The potential problem, though, is not the cadre of officials and trade experts in Washington. These are people with a deep well of knowledge who are guided by facts.

'Alternative facts'

The potential problem is that the president and his inner circle, when faced with inconvenient facts, tend to simply make up new ones – "alternative facts," to use the phrase concocted by Trump senior advisor Kellyanne Conway a few days ago — then label anyone who calls them on it "lying and dishonest."

Trump nation then jumps in, angrily raining down filth on social media and comment sections. To them, the facts are what their hero says the facts are. Up can be down, the sun can rise in the west, a sparse crowd can be the largest in history.

In other words, on trade with Canada, Trumpworld might have a whole different view than experts like Schwarzman. The president might see factories in Canada that manufacture vehicles for export into the U.S. as stealers of American jobs, or at least pretend to see things that way in order to force a better deal than NAFTA.

Remember: the president is a businessman — a self-declared specialist in grinding down opponents, a man with a record of withholding payment from counterparties, reneging on commitments, then inviting them to sue if they aren't happy. The only rules are his rules.

This, in part, is what he said in his inaugural speech:

"From this day forward, it's going to be only America first, America first. Every decision on trade … will be made to benefit American workers and American families. We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs."

And remember something else: Donald Trump is not really a conservative. Conservatives believe market forces should be tampered with as little as possible.

With all his threats of imposing "major border taxes" on companies that minimize costs by employing labour outside the United States (the way he himself did), Trump is actually talking about using the dead hand of government — as a conservative would call it — to distort market forces, artificially boosting the price of imported goods in order to re-engineer consumer behaviour.

Left-wing fiscal policy

This, until now, has been left-wing fiscal policy; the sort of thing urged by large labour unions and economic nationalists.

If Trump does go ahead with protectionist barriers and tariffs, and other countries retaliate with countervailing measures, it'll be interesting to see how the result – higher prices and less consumer choice and maybe even fewer jobs – will sit with the tens of millions of relatively spoiled American consumers who voted for him, and who have become accustomed to cheap and plentiful.

Of course, it may be that President Trump and his acolytes only resort to alternative facts in speeches and media briefings, and will govern as sensible realists.

Maybe his trade threats are a fantasy, like his promises to eliminate Islamic extremism from the face of the earth and make Mexico pay for a border wall.

Or not. Canada, and, for that matter, America, is about to find out.