Trump plays hardball with Canada on tariffs
We have just been informed that Canada, a very difficult Country to trade with, including the fact that they have charged our farmers as much as 400% Tariffs, for years, on dairy products, has just announced that they are putting a Digital Services Tax on our American technology companies, which is a direct and blatant attack on our country. They are obviously copying the European Union, which has done the same thing, and is currently under discussion with us, also. Based on this egregious Tax, we are hereby terminating ALL discussions on trade with Canada, effective immediately. We will let Canada know the tariff that they will be paying to do business with the United States of America within the next seven day period. Thank you for your attention to this matter!
The ball is in Canada’s court now.
Hard Ball, and a Louisville Slugger
“they have charged our farmers as much as 400% Tariffs, for years, on dairy products”
Ottawa’s refusal to negotiate in good faith is a clear indication that continuing to demonize Orange Man Bad is seen as the means to continued domestic political support. In may well work, even as Carney and his leftist coalition take Canada over the looming cliff’s edge. It’s increasingly likely that Canada will no longer exist in 5 years.
I’m opposed to protective tariffs and trade barriers in principle, on the grounds of mathematical logic, so take what I say next as admission against interest.
Trump’s tariffs are not moving us from a free trade economy to a protectionist one. They are moving us from one set of tariffs and trade barriers, to another set. And the people who negotiated and signed the North American Free Trade Agreement sold us a bill of goods in terms of calling it “Free Trade”.
Dairy products are a perfect example. NAFTA was not allowed to touch Canada’s protectionist dairy racket. Instead, a complicated circumlocution was developed. The US would be able to import a quota of dairy goods without tariffs, and above that amount the huge tariffs would kick in. But here is the deception: the quota is filled entirely by the output of Canadian-owned dairies in the United States. It is only American dairy farmers who are locked out of Canada’s market, by a treaty that said “Free Trade” right on it.
Canada’s dairy racket does its people no favors: milk costs Canadians 25% more than Americans pay after adjusting for the currency. But it puts a lot of money in the pockets of the connected, and that’s why countries have protective tariffs. That said, our “free trade” politicians should not have cheated us by calling a treaty “Free Trade” that did no such thing, and our “free trade” loving talking heads and ink-stained wretches in National Review and other such places should not have parroted their talking points.
Niketas
When has there ever been free trade? Ever? I think it is wishful thinking in the extreme to suggest there really ever will be. Maybe I’m wrong, but I don’t think so.
@Richard F Cook:When has there ever been free trade? Ever?
Free trade is the default state before government intervention. It’s what happens before a government figures out it’s going on and sticks it fat snout in and starts picking winners and losers, setting up rules to favor its clients and cronies, and taxing it.
Asking “when has there ever been free trade” is like asking “when have there ever been free people”. It is very nearly the identical question. Has there ever been a people who didn’t have to obey some kind of rule? No. Has there ever been a government that didn’t want to meddle in trade? Probably not. For most of history political freedom was pretty rare and unusual, and for most of history so have free markets been.
When you look at trade, it seems like people would want more of it and as free as possible. However, every nation is competing with other nations in the realm of trade. We produce goods and services that we would like to sell to as many people as possible. Why? Because it grows the wealth of the nation. That’s why nations try to protect their industries. Would Canda’s dairies go out of business if they had to compete on a level playing field with American dairy farmers? No, but there would be fewer of them and less income. Canda would be somewhat poorer.
Unfortunately, economists, environmentalists, and businessmen decided in about the 1960s that we should not be a manufacturing, mining, lumbering, and basic industrial country. We would let other countries do those dirty, polluting jobs and we would become an “information economy.” And they succeeded. However, now we are faced with the fact that we can no longer provide the basics of a life and good jobs because we have farmed out all the dirty work to places like China, Japan, South Korea, Vietnam etc. Doing that has enriched WallStreet investors and some global companies while hollowing out our economy. And the people who did this didn’t care if there were barriers to our products because they were making money – and China would surely become less of a cheater and thief of our intellectual property. 🙂
It took a businessman turned politician to recognize what has happened. We are losing a trillion dollars a year in trade deficits. We could not support ourselves in a major war with China or Russia. We can be economically blackmailed by other nations that aren’t our friends.
What Trump is trying to do is to get manufacturers to come back, restore mining/lumbering/oil production, and stop counties from taking advantage of our errant ideas about what makes us wealthy.
Tariffs are just one-part of the plan.
Lower taxes, deregulation, and making basic industries the core of our economy are also part of the plan.
Can he succeed? That’s the question. If MAGA candidates can dominate the government for the next twelve years, we’ve got a chance.
@J. J.Would Canda’s dairies go out of business if they had to compete on a level playing field with American dairy farmers? No, but there would be fewer of them and less income. Canda would be somewhat poorer.
Canadians are somewhat poorer because they are paying 25% higher prices for dairy products than they need to–those that don’t live close enough to the border to buy their dairy in the US. If they didn’t have to do that, they could spend that money with different Canadians that produce something else. The dairy price supports destroy other Canadian industries to prop up one. Minuses cannot add up to a plus.
We are losing a trillion dollars a year in trade deficits.
You are neglecting the value added by the trades. The people who bought products traded the money for something they valued more. Plusses cannot add up to a minus, unless you think that only money has value and goods and services have no value.
The existence of a trade deficit means that someone somewhere is buying and selling currencies. You have to ignore where these “lost dollars” in trade deficits go, in order to make them sound scary. If they really disappeared, we’d be getting manufactured goods and raw materials in exchange for paper–or rather entries in ledgers–that we print as much of as we want. That’s actually the best possible deal.
Never spoken about are the Canadian intraprovincial tariffs.
Yep, the Canadian provinces, esp. Quebec, have tariffs on goods coming into their province from other Canadian provinces.
This would be like individual states in the USA imposing tariffs on goods coming from other US states.
One must conclude that the provinces of Canada believe they are benefiting from imposing these tariffs, given that they have had them for many years.
Ever since Trump began his tariff campaign all we hear about is how this is a really bad idea.
Yet somehow just about all other nations have had for many years tariffs on goods from the USA and we never hear economists talk about what a bad idea it is for those nations that impose tariffs.
So, if tariffs are so bad, then why do just about all other nations impose tariffs?? And if tariffs are so bad one would think these other nations would have removed them years ago; but they haven’t.
These nations must realize some benefits to tariffs.
Apparently, the only “bad” tariffs are any that Trump is imposing. If France or Italy or Japan or the UK or Vietnam or China or Germany or………take your pick…. have tariffs, well that is just fine and there is nothing wrong with that.
But if Trump (ahhhhhh !!!) insists on doing the same thing, well, that is evil, a disaster, a tragedy.
JJ’s comment reminded me of something my father would say: There are six groups of people who produce the things that the rest of us rely on for everything, and without them we have nothing. Farmers, ranchers, fishermen, miners, loggers, and oil drillers should be encouraged as our prosperity is built on their work.
There are lots of other important jobs, such as medical and education fields for example, but none of these could do their work and provide us their benefits without the above six.
No, one must conclude that a controlling subset of the politicians believe they, personally, benefit from imposing these tariffs. It’s a mistake to conclude that the politicians’ interests are the same as those of the polity as a whole.
Thanks for your comment, Bluiegreen kayak. Your father and I may be contemporaries. (I’m 92.)
My grandfather told me the same facts 75 years ago.
J.J. at 12:01am,
Good comment.
“Doing that has enriched WallStreet investors and some global companies while hollowing out our economy.”
It didn’t just hollow out our economy, it hollowed out our communities, cities and many small towns.
Yep. Trump is trying it all, to put America in reverse of the left’s destructive agenda.
Gotta love orange man. Lol!
(Though I cringe plenty at some things he says* or does. Sigh …
It seems that some foot shooting comes with the package.
* Insulting Jerome Powell, for one.)
Bluegreen kayak (that sounds like a nice color scheme for a kayak), it would be quite interesting for a politician someday to build his economic vision for the country starting from that essential fact.
Should anyone be wondering what kind of place Canada has become under the past dozen-odd years of so-called “Liberal”-Party rule …
“…Ottawa’s latest bill could force your lawyer to rat you out;
“’Bill C-2 empowers Ottawa to demand private client info without a warrant — and bars lawyers from telling clients they’ve been compromised.’”—
https://www.westernstandard.news/opinion/geist-ottawas-latest-bill-could-force-your-lawyer-to-rat-you-out/65787
(To be sure, for too long now, Canada seems to have become the bell weather—a kind of testing ground—for sick WEF/WTF fantasies.)
Related:
“How Canada’s Digital Tax Exposes Brussels’ Globalist Playbook: A Trump Retaliation”—
https://www.zerohedge.com/markets/how-canadas-digital-tax-exposes-brussels-globalist-playbook-trump-retaliation
Opening grafs:
Re: that digital penalty tax in Canada – I don’t know what it’s really for, but the retroactive nature of it would alone be enough to draw my ire if I were in DJT’s position, never mind anything else.
I was reading about the Eagle Mine last night. It seems the U. S. doesn’t have a facility to process nickel concentrate at all, so we send it to Sudbury for finishing there. Wacky. We might have to do something about that.