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Bully’s Backdown Can Actually BOOST Canada’s Steel Exports to US!!

March 9th, 2018 · 30 Comments

US President Donald trump must have read this blog!  Okay,  maybe also heard from a few others …in government, in business, in trade relations  … who let him know what a disaster it would be to include Canada in any steel tariffs.

Because RETALIATION would have had to follow!

There was NO WAY Prime Minister Justin Trudeau … still reeling politically and in popularity from his immaturity and silliness in India … could let Trump impose a 25% tariff on Canadian steel … and do NOTHING.

So retaliation would HAVE TO have come … probably hitting US products on the list I included in my previous blog: US-built aircraft (take that, Boeing, Cessna, Gulfstream); American motorcycles; American clothing (like Levis, shoes, boots, sports, fishing, boating and mountaineering gear): American recreational vehicles and other American-built equipment; American plastics, American computers, American agricultural goods that are also abundantly produced in Canada (apples, potatoes, chocolates, candies, canned goods: American wines.”

So the bully backed off! And picked on another potential victim that will huff and puff, but likely NOT retaliate in any major way: China.

China’s trade surplus with the US was a whopping $347 BILLION in 2016. It exported  (some say dumped) 2% of its steel production to America … worth a billion dollars in value: however, in the context of its overall trade surplus, not a huge enough amount to trigger a full trade war with Trump.

The European Union, though, will be hurt by the American tariff.  EU steel accounts for almost 21% of American steel imports … huge in comparison with China … and will suffer from Trump’s tariff attack.  So the EU WILL retaliate , hitting American products … but anyone who has watched Trump knows he’s not a great fan of most European countries/leaders and probably wouldn’t worry about getting into a spitting match with them..

Meanwhile …. without realizing it… Trump’s new tariffs on China’s and the EU’s steel will actually make CANADIAN steel more competitive and more attractive to US importers … who now know the quality,  relative proximity and continuing ease of access our steel enjoys in their markets will continue.

American steel production will increase, but the country …especially with its currently growing and expanding economy …will see continued growth in demand for steel … an essential component in virtually all construction but also in almost every product and machinery manufacturing venture.

So China’s and the EU’s LOSS of US market could be Canada’s GAIN!

And all the while, American exporting companies will pay the price from retaliation that is bound to come … especially from Europe … against US products.

There are already calculations that suggest the impact of Trump’s tariffs on higher production costs and foreign retaliation could result in a net LOSS of 146,000 US jobs within a year.

While Canadian steel exports to the US … already almost 18% of the US market, will stay strong … and, with other foreign competition handicapped …could even grow.

And also not to be missed: on the same day Trump caved in on Canada, we were also one of 11 countries that officially signed the Trans Pacific Partnership  … that will give Canadian businesses and exporters an extra “in” with countries overseas, now fuming at the increasingly isolationist US/Trump.

All in all … a VERY good week for Canada.

But Shhh!   Don’t tell the bully …. or his base.

Harv Oberfeld

→ 30 CommentsTags: International · National

US Trade: Canada Has No More Cheeks to Turn

March 5th, 2018 · 35 Comments

When the Trump Republican administration smacked Canada hard on the rear with yet another tariff on Canadian softwood lumber  …. even though we have won EVERY International Trade Tribunal decision over such tariffs in the past 20 years … Prime Minister Justin Trudeau and his government turned the other cheek: NO retaliation, just fight the Americans AGAIN in Court.

Then the Trump Republican administration supported an attack on our aviation industry by Boeing Corporation and imposed HUGE tariffs on Bombardier aircraft … Prime Minister Justin Trudeau and his government turned our other cheek: NO retaliation …just fight the Americans in Court.

We won … but a new attack against Canada by the Trump Republicans is on the horizon … against Canadian steel and aluminunm … and Canada has NO MORE CHEEKS to turn!

If Trump and his Republican administration go ahead with their threatened tariffs on Canadian steel and aluminum … Canada MUST NOT wait years and fight the attack in International Tribunals … Canada MUST retaliate and make Americans feel the impact of their own decisions/attacks/exclusionary policies.

And the US’s own Trade Department has come up with its own list of American exports to Canada that can help OUR officials hit back:

“The top export categories (2-digit HS) in 2016 were: vehicles ($48 billion), machinery ($ 40 billion), electrical machinery ($24 billion), mineral fuels ($16 billion), and plastics ($12billion). U.S. exports of agricultural products to Canada totaled $23 billion in 2016, our 1st largest agricultural export market,” the US Trade Department has offered up.

Here’s a little more help:

“U.S. exports to Canada totaled $375 billion in 2014 – 16 percent of total U.S. exports. Canada is the number one export market for 35 U.S. states.”

Hear that Justin????

In fact, the US Trade Representative has calculated U.S. goods trade deficit with Canada was $12.1 billion in 2016.  Trade between the two nations HAS helped Canadian companies expand the markets for our products.

BUT this is key …  ” Services exports (from the US TO Canada) were $54.2 billion; services imports were $ 26.9 billion. The U.S. services trade surplus with Canada was $24.6 billion in 2016,” according to the American officials’ own calculations.

Get that, Prime Minister???

The US had a TRADE SURPLUS in its dealings with Canada in 2016!!!

And yet Trump … apparently without reading, asking or citing ANY actual facts … has waxed ignorant, aggressive, threatening and rhetorically attacked Canada with his usual hyperbole as being an unfair trader ripping the US off.

He’s a nakedly exposed ignoramus: US officials and US House of Representatives members and US Senators KNOW the Emperor is wearing no clothes, but are too afraid to stand up to him.

Canada MUST!!!

With his silver-spooned background and private schooling under the watchful eye/protection of the RCMP, Justin probably had little or no experience dealing with bullies.

But most of the rest of us have … and WE know that if you let a bully get away with a first assault … a second will absolutely follow…and then a third and more.

Trump IS a bully … and the only thing that will stop him if he does proceed with another attack on Canada is if we …and other trading nations … start to hit back …WITH TARIFFS targeting American goods.

Regrettable, but only if American companies and American workers start feeling the same pain they have been handing out to Canadian companies and Canadian workers will the bully relent.

There’s a LOT to choose from: US-built aircraft (take that, Boeing, Cessna, Gulfstream); American motorcycles; American clothing (like Levis, shoes, boots, sports, fishing, boating and mountaineering gear): American recreational vehicles and other American-built equipment; American plastics, American computers, American agricultural goods that are also abundantly produced in Canada (apples, potatoes, chocolates, candies, canned goods: American wines), and also US-made machinery of all kinds… especially models easily replaceable within Canada or by imports from other friendlier trading partners.

Trudeau has described Trump’s bullying policies as “absolutely unacceptable”.

Big deal!

Does anyone in the real world recall any incident when an attack-prone bully was EVER deterred by just being told his/her antics were “absolutely unacceptable”?

A punch to the nose of a bully may not be pretty … but it’s far more effective and faster than fighting before international tribunals for years.

Especially since we have NO MORE cheeks to turn.

Harv Oberfeld

(Reminder: You can receive free First Alerts of all new posting on this BC and Canadian blog by following @harveyoberfeld on Twitter. No spam…just First Alerts of new topics.)

 

→ 35 CommentsTags: British Columbia · International · National