Milking the System

In case you’re wondering where I stand in the U. S.-Canadian Cheese War, I don’t think that the United States should subsidize dairy production and I don’t think that Canada should impose 250%+ tariffs on U. S. dairy products. Both the U. S. and Canada are playing within the rules by their actions as is Trump in saying that the Canadians aren’t playing fair. Sometimes playing within the rules isn’t enough.

3 comments… add one
  • CuriousOnlooker

    Lets say the shock for Justin Trudeau and Canadian political commentary was that the US President paid attention to his comments!

    A former chief of staff to Canadian PM, Norman Spector, commented that Trudeau reaction to the metal tariffs were meant for domestic consumption; playing to his base as it were. But the American media picked it up and presto, Trump was using the comments to play to his base…

    When all the dust settles, the fact is trade with Canada is fairly balanced, so its an unlikely trade target. However Trudeau is playing with fire in teaming up with countries like Mexico and the EU on trade which the US does have big deficits. Its literally asking for the elephant to run over the mouse.

    In an ideal world; all these countries running big trade surplus would see this as both danger and opportunity. If the trading relationship has to change, make big investments in those depressed areas in the Midwest, there’s cheap land, relatively cheap labor, low taxes, guaranteed access to the biggest consumer market in the world. As a bonus, the US is going to respect your investment in a way that China would not. Could make a lot of money; the British once made investments in American railroads, those profits saved the British in WWI.

  • In an ideal world; all these countries running big trade surplus would see this as both danger and opportunity. If the trading relationship has to change, make big investments in those depressed areas in the Midwest, there’s cheap land, relatively cheap labor, low taxes, guaranteed access to the biggest consumer market in the world. As a bonus, the US is going to respect your investment in a way that China would not. Could make a lot of money; the British once made investments in American railroads, those profits saved the British in WWI.

    That’s the kernel of the comment above and it should be mentioned that a major source of our problems is that the world is full of fiat currencies and too many players are running permanent trade deficits to avoid unemployment at home. That means that they’re actually underwriting U. S. consumption and importing employment. Our present LFPR is so low going any lower is problematic for us.

  • steve

    When you look at dairy, Canada actually runs a deficit with us. Exclude oil, and these is no deficit with Canada in good. Include services and we run a surplus with Canada, even including oil.

    https://www.motherjones.com/kevin-drum/2018/06/our-trade-relationship-with-canada-in-2-charts-and-200-words/

    It is entirely possible Trump is entirely ignorant on the topic, however I think this was mostly just playing to his base by bashing the liberal leader of another country.

    Steve

Leave a Comment