WASHINGTON—There is good news and bad news for Prime Minister Justin Trudeau in U.S. President Donald Trump’s choice for chief economic adviser.

The bad news first. Trump’s new director of the National Economic Council, conservative economic pundit Larry Kudlow, two weeks ago called Trudeau a “left-wing crazy guy.”

The good news, which is probably more important: Kudlow has been a staunch ally of Trudeau’s trade agenda and an enthusiastic advocate of harmonious economic relations with Canada.

In appearances on CNBC business television and on his radio show this month, Kudlow has forcefully defended the North American Free Trade Agreement — “NAFTA going down, which could come after (the steel and aluminum tariffs), would be a terrible thing for our economy,” he said on CNBC on March 2 — and free trade more broadly: “I still feel the more free trade we have, the better we are.”

As Trump was contemplating steel and aluminum tariffs on Canada, Kudlow said on CNBC: “NAFTA is the key. And unfortunately we’re going after a major NAFTA ally, and perhaps America’s greatest ally, namely Canada. Even with this left-wing crazy guy Trudeau, they’re still our pals. They’re still our pals. Why are we going after them?”

Kudlow is replacing Gary Cohn, another supporter of free trade, who resigned last week after Trump decided to implement the tariffs over his opposition. There had been some concern among Canada’s trade advocates that Trump would replace Cohn with someone more aligned with his own protectionist instincts.

Instead, he chose an ardent free-trader. Kudlow, a proponent of conservative “supply-side” economic theory that favours tax cuts, was an economic official in the Ronald Reagan administration that initiated Canada-U.S. free trade talks.

It is not certain, of course, how much influence Kudlow will have with Trump — nor how forcefully he will press his views on trade. He told the Associated Press on Wednesday that he was “in accord” with Trump on policy, though that was clearly not the case on all issues as recently as last week.

“He’s so good on taxes. He’s so good on tax cuts. He’s so good on deregulation, infrastructure. I haven’t liked him on immigration. He’s never been good on trade,” Kudlow said on CNBC on March 2.

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Trump told reporters on Tuesday: “We don’t agree on everything, but in this case, I think it’s good. I want a divergent opinion. He now has come around to believing in tariffs as also a negotiating point.”

Trudeau’s government is seeking to preserve and modernize NAFTA. Trump, who has called the agreement the worst in world history, is seeking major changes, and he is threatening to terminate the deal if Canada and Mexico do not make significant concessions. He has also threatened to cancel the exemption he gave Canada and Mexico to steel and aluminum tariffs.

Kudlow has expressed firm opposition this month to steel and aluminum tariffs on Canada, noting that the U.S. has a surplus with Canada in steel trade. And although Trump has repeatedly insisted that the U.S. has an overall trade deficit with Canada, Kudlow has repeatedly noted that it is actually a surplus.

“The president singled out Canada. Which is a steelmaking country. But here’s what’s not been mentioned: one half of American steel exports, fully 50 per cent of our exports of steel, go to Canada. Isn’t that something? They go to Canada. So why are we punishing Canada?” he said on his radio show on March 3, before Trump granted the exemption. “Not only are they a friend and a great ally down through the years, my goodness, same continent, next door. Actually, we’re running a trade surplus with Canada, did you know that?”

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Kudlow explained that the U.S. surplus in services trade with Canada significantly exceeds the U.S. deficit in goods trade with Canada. “So, net-net, we run a trade surplus with our great pals up north in Canada,” he said.

He also rejected Trump’s frequent contention that trade deficits with individual countries should be a primary focus of U.S. policy.

“Trade deficits by themselves don’t matter,” Kudlow said.

And on CNBC on March 6, Kudlow endorsed Foreign Affairs Minister Chrystia Freeland’s argument that there is no plausible reason to apply tariffs on Canada on a “national security” basis.

“Canada’s our friend. They’re not going to desert us in a war,” he said.

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