The attempt in 1911 by the William Howard Taft administration in the US and the Liberal government of Wilfred Laurier in Canada to put through a free trade or “reciprocity” agreement cutting tariffs provoked sharp disagreement in ruling circles in the US and Canada, as well as Great Britain, which still retained the power to pass laws concerning its dominion, Canada.
In the US the agreement was heavily backed by Republican president Taft and most congressmen from the Northeastern industrial states, who looked to gain access to Canadian raw materials and agricultural products. Politicians representing industries in the US potentially threatened by the deal — grain producers, fish production, and pulp lumber producer — opposed the bill.
A challenge in Britain’s House of Commons led by Austen Chamberlain focused on whether or not Laurier had consulted British authorities on the decision, and the implications for British capitalism were Canada’s economy to be entirely reoriented to the US. Chamberlain, a Liberal Unionist, demanded the imposition of “an imperial tariff” to protect British domination of its colonial possessions and dominions. The same week, a nearly hysterical article in Britain’s Saturday Review, entitled “The American Challenge,” warned that the agreement might reduce the United Kingdom to the status of a second-rate power. “The British Empire has withstood many shocks,” the newspaper states, listing Napoleon and the rise of Germany, “but now the challenge ... comes from our most formidable of all our rivals, the United States of America.”
In Canada, the opposition attacked the plans as the product of “continentalism” and the destruction of the dominion’s British heritage. Robert Borden, a leader of the Conservative opposition, spoke for three hours in parliament, warning that the trade deal would undo a quarter century of Canadian efforts to build up east-west trade, rather than just north-south. “We must decide whether the spirit of Canadianism or that of continentalism shall prevail on the northern half of this continent,” Borden declared.