While Trump tried to downplay concerns about a trade with with Canada, after his administration slapped tariffs on Canadian softwood lumber, he may have succeeded in fanning the flames when on Tuesday Trump told reporters that “No,” he does not fear a trade war with Canada adding “they have a tremendous surplus with the United States. Whenever they have a surplus, I have no fear.”
President Trump says he does not fear that there will be a trade war with Canada https://t.co/SwAdMO9hyX
— CNN Politics (@CNNPolitics) April 25, 2017
Trump’s decision to impose tariffs of as much as 24 percent on Canadian softwood imports ignited a trade dispute – let’s not call it war at least until Canada retaliates – between the two close trading partners.
Combined with his saber rattling on the Canadian dairy market and the North American Free Trade Agreement (NAFTA), Trump’s deeds, words and tweets have sparked concerns about a broader trade conflict that could have significant effects on the U.S. economy, not to mention on Canada’s. As The Hill notes, Canada is the second-largest U.S. trading partner, with $575 billion in two-way goods exchanged in 2015.
Still, despite Trump’s allegation that Canada has a “tremendous” surplus with the US, its trade relationship is rather balanced: the U.S. only had a $15 billion trade deficit with Canada in 2015, according to figures compiled by the Office of the U.S. Trade Representative.
Meanwhile, as Bloomberg puts it in almost deadpan humor, “Trudeau’s Reward for Courting Trump Is a Trade War on Lumber“
Justin Trudeau has always played nice with Donald Trump. The refugee-hugging liberal bit his tongue, flooded Washington with envoys, feted Ivanka Trump on Broadway and relentlessly talked up Canada-U.S. ties. It hasn’t worked.
Canada pledged legal action while criticizing the “unfair and punitive duty,” saying it will raise the cost of U.S. homes. It’s also threatening to pivot away, responding to duties by highlighting efforts to sell more lumber to China. All to be expected as two neighboring countries launch in a trade spat.
“Canada will continue to press their American counterparts to rescind this unfair and unwarranted trade action,” Freeland and Carr said Monday night in a statement. “We remain confident that a negotiated settlement is not only possible, but in the best interests of both countries.”
Canada looks set to stick to its play-nice strategy, and Trudeau had fair warnings on all this. His father, former prime minister Pierre Trudeau, famously described Canada-U.S. relations as “sleeping with an elephant,” with Canada “affected by every twitch and grunt.”
As Bloomberg concludes, “this elephant is now wide awake, but Trump’s commerce chief says the softwood dispute is strictly business. Describing Canada as “generally a good neighbor,” Ross distanced Trump from the softwood decision during a White House briefing Tuesday. “I don’t think it has anything to do with the personal relationship between Mr. Trudeau and the president.”
As for the winners from the sudden break out of a trade war between the US and Canada, these are China, Germany and North Korea, the countries that actually deserve retaliation for their trading practices, but are far too important to openly antagonize.
As for Canada…
via http://ift.tt/2q2e9yX Tyler Durden