Fake news: we have trade SURPLUS with Canada

Here is some more fake news about our escalating trade war with a host of other countries, including our best allies.

Way down deep in this week’s articles on the growing list of tariffs and counter-tariffs was the fake news that the U.S. actually had a trade surplus with Canada in 2017. Our northern neighbor, who has been with us in every major war, flooded the U.S. with $333 billion in its goods and services, according to the federal Office of the U.S. Trade Representative.

That source would be part of the Trump Administration.

The other half of the equation, though, is our exports to Canada last year. They totaled $341 billion. That means we had an $8 billion surplus in trade with Canada in 2017.

Prime Minister Justin Trudeau

Is there any question why Prime Minister Justin Trudeau pushed back on President Trump’s new tariffs on Canadian timber, steel and aluminum? Is there any justification for our president to tweet that Trudeau was “very dishonest & weak” in taking a tough stance? The tweet was meant to insult and it did.

Trumps’ defining characteristic is divisiveness.

There probably isn’t a single Canadian who doesn’t agree with the prime minister. Some agree so much that there is a growing movement to boycott American goods. That, of course, means fewer exports to Canada in 2018. That, in turn, means fewer jobs making those products on this side of the border.

That’s just part of the damage. American consumers will be paying higher prices for all kinds of goods, such as houses that had used lower-priced Canadian lumber. U.S. lumber producers aren’t stupid. They will raise their prices to just a tad below the price of Canadian timber that includes the new tariff.

Some U.S. manufacturers won’t even be able to get enough raw materials, such as some kinds of steel, from U.S. suppliers – at any price. This country simply doesn’t have the capacity.

President Donald Trump

Here in fly-over country, which put Donald Trump into the Oval Office, the trade war is even more harmful. Wisconsin also had a trade surplus with Canada: $6.5 billion in exports and $4 billion in imports.

The Trump Administration can make a better case for trade sanctions with Mexico and China, with trade deficits $71 billion and $338 billion respectively. China is two-thirds of our trade imbalance.

Yet Wisconsin also has a trade surplus with Mexico: $2.8 billion in imports vs. $3.5 billion in exports. (Disclosure: Serigraph has a plant in Mexico to serve our customers there.)

President Trump trumped China’s counter-tariffs Tuesday by jacking the amount of incoming Chinese goods facing new taxes from $50 billion to $200 billion. It’s a big poker game to see who blinks first. It’s great theatre that puts our leader in center stage, which is where he likes to be.

Will his blunt instruments work? No one knows, including him.

One part of the big gamble is that there will be a lot of collateral damage to consumers who pay more and to people who lose their jobs in export industries.

The Wisconsin Republican delegation must be suffering from severe heartburn over the trade wars on top of their indigestion over the Trump Administration’s soaring domestic deficit and debt levels.

There is no way that the twin deficits won’t be major issues in the fall elections.

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  • David Newby

    John,
    We’ve disagreed about many issues over the years, but I give you credit for doing what almost no other business commentators are willing to do: note the level of imports as well as exports. Almost everyone else extols the exports (of Wisconsin or the US), but fails to note the value of imports. Obviously, if the value of imports is greater than the value of exports, then we are losing jobs and control of our economic assets and economy.
    David Newby, President
    Wisconsin Fair Trade Coalition

  • Tom

    Hey John I never read where you thanked the President for the nice cooperate tax cut. Hmmm I must of missed that one.

    • JohnTorinus

      Any of the Republicans who ran for president would have pushed for those cuts and signed them.

      • Tom

        But they didn’t. No President ever cut the corporate tax rate this low. Oh John just go away because your becoming irrelevant.

        • JohnTorinus

          Thanks for the cogent reply, ending with a Trumpian insult. That’s what third graders do. Grow up. You can move to fourth grade with a reasoned response of some sort.

          • Tom

            You almost sound like Charlie Sykes. Depending on which way the wind blows that’s how you decide how your opinion is. By the way John the average Trump voter is someone who goes out and busts his or her behind everyday to try and make ends meet. I realize you’re up there in your ivory tower looking down at the little guy but like I said before you’re becoming more irrelevant every time you put out one of your idiotic opinions.

          • JohnTorinus

            B. S.

          • Tom

            B S just like your articles.