As NAFTA negotiations linger on, let’s step back and see what Trump’s threats are all about.
The original article has been edited here by munKNEE.com for length (…) and clarity ([ ])
The U.S. has had a goods surplus with Canada every month since 1985:
Canadian Manufactured Auto Industry
Nonetheless, Trump is incredibly annoyed at Canada and threatens to put tariffs on Canadian cars. Well, Trump better make that…[American] cars because Canada does not have any Canadian car brands. The U.S. would lose far more from Canadian tariffs on cars than vice-versa but both sides would lose in such a war. Tariffs are a tax on consumers. No one wins from them.
No NAFTA Is Better Than A Bad NAFTA Deal For Canadians
For now, Canada says it will Stick to its Guns at NAFTA Talks Despite Trump Pressure. Canadian Prime Minister Justin Trudeau indicated on Tuesday that Canada would not compromise on key demands at high-level talks this week with the United States to update the North American Free Trade Agreement saying:
- “No NAFTA is better than a bad NAFTA deal for Canadians and that’s what we are going to stay with…
- We will not sign a deal that is bad for Canadians, and quiet frankly, agreeing to scrap Chapter 19 (a dispute-resolution mechanism to ensure the rules are followed) as demanded by the U.S.]…would be bad for Canadians.”
- …and existing protections that ban U.S. media firms from buying Canadian cultural industries such as television stations and newspapers must be maintained.
Legitimate Gripes and Plain Silliness
- Trump has a legitimate gripe about dairy products, BUT the U.S. sugar, corn, an ethanol lobbies are just as bad – if indeed, not far worse.
- U.S. tariffs on Canadian lumber are ridiculous. Housing is already slowing [and] high prices for lumber do not help.
Canada ought to propose scrapping all tariffs but even if Trudeau made such a proposal, Trump would not accept it.
Here’s the broad picture regarding the U.S. balance of trade 2011-2017
Laughable Concern Over Canada
While it’s true the U.S. has had a continual goods surplus with Canada, the overall balance of trade with Canada has not been consistently positive yet, for three straight years, the U.S. has had a surplus with Canada, including services.
Mid-year 2018, the U.S. is still running an overall trade surplus with Canada, so this will likely be the fourth year the U.S. records a trade surplus with Canada (total the first two highlighted columns). Nonetheless, Trump is moaning and the global chart shows it’s over very insignificant totals.
This is the true nature of the [supposed] “worst trade deal in history“…