The US has had a goods surplus with Canada every month since 1985.
Nonetheless, Trump is incredibly annoyed at Canada and threatens to put tariffs on Canadian cars.
Well, Trump better make that US cars because Canada does not have any Canadian car brands.
The US 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.
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.
> “No NAFTA is better than a bad NAFTA deal for Canadians and that’s what we are going to stay with.”
> U.S. President Donald Trump - who signed a NAFTA side deal with Mexico last week - has threatened to impose auto tariffs on Canada or exclude it from the three-nation pact unless an agreement can be struck quickly.
> Trudeau made clear, however, he would insist on keeping the so-called Chapter 19 dispute-resolution mechanism that Washington wants to scrap.
> “We will not sign a deal that is bad for Canadians, and quiet frankly, not having a Chapter 19 to ensure the rules are followed would be bad for Canadians,” he said.
> He also said 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 US sugar, corn, an ethanol lobbies are just as bad if indeed not far worse.
US tariffs on Canadian lumber are ridiculous. Housing is already slowing 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.
US Balance of Trade 2011-2017
I created the above chart from downloads of these three Census Department files.
- Hong Kong, Singapore, and Taiwan were added in 2015.
- The format of the reports changed in 2014, but that link has annual totals that date back to 2011.
- Prior to 2014 there was no Exhibit 20 (selected countries).
Laughable Concern Over Canada
While it's true the US 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 US has had a surplus with Canada, including services.
Check out this reporting from Reuters writers Jason Lange, David Ljunggren on this month's trade deficit surge.
"The shortfall with Canada shot up 57.6 percent."
Irony abounds. In one quarter, possibly related to Trump tariff repercussions themselves, the goods deficit rose.
Here's the real picture.
Mid-year 2018, the US is still running an overall trade surplus with Canada, so this will likely be the fourth year the US 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 "worst trade deal in history" where Canada is now more important than Mexico.
Spotlight South America
The US has tariffs on Brazilian sugar and Ethanol despite the fact the Us runs a trade surplus with the region.
We call higher gas prices and higher sugar prices "winning". Yes, it's insane.
Notice OPEC and Saudi Arabia. For three straight years the US has had a trade surplus with the Mideast.
All this silly talk about the Petroyuan and dumping dollars is a direct result of this trade shift. The OPEC countries are not dumping reserves because they want to, it's because they have to.
The Petroyuan does not represent the demise of the dollar, but rather a huge problem for OPEC. They are burning US dollar reserves at a substantial rate. The US is increasingly energy independent but it's not quite there yet.
Moreover, the Petroyuan barely trades because it's not liquid. The entire Petroyuan discussion is much ado about nothing from a US perspective but it is a problem for OPEC.
Mike "Mish" Shedlock