(YouTube & “Trump is creating chaos Can we survive that?”)
Experts say that while the U.S. has a trade deficit with Canada — i.e. we export more to them than they export to us — that relationship serves the U.S. economy well and should not be viewed as a subsidy.
U.S. President Donald Trump's claim that
his country subsidizes Canada with hundreds of billions of dollars every year has become a key plank in his argument for annexing the country. But do his numbers add up?
His argument hinges on a belief that the deficit in trade between the two countries has left the U.S. footing the bill for Canada's economic growth.
The amount of "subsidy" Trump claims the U.S. provides Canada has varied over time.
In December, he said it was $100 billion US. And he claimed it was $200 billion as recently as Thursday.
"We can't do that anymore," he
told an audience at the World Economic Forum last month as he put the deficit at $250 billion. "You can always become a state, and if you are a state we won't have a deficit. We won't have to tariff you."
In Trumps mind, is he defining a subsidy as cash laid out "without any goods and services provided in return," or something else completely? "I think that in Trump's mind, he sees trade as a zero-sum game," Moshe Lander, an economics professor at Concordia University, told CBC News. "He's just hearing the word deficit. And that's the end of his math calculation."
(YouTube & “Once markets realise Trump is serious about tariffs they will crash”)
According
to the U.S. Census Bureau, the trading relationship between Canada and the U.S. amounts to more than $760 billion US a year, with Canada buying more American exports than any other country in the world, yet when the U.S. trade deficit is measured against the U.S.'s annual GDP of almost $30 trillion US, the trade deficit with Canada is barely more than a rounding error, even with Canada’s population being about 1/8th of the USA.
According to
Statistics Canada, energy exports such as oil, natural gas and electricity make up about a third of goods Canada sent south last year. Remove energy, and it's Canada that has the trade deficit. "The reality is that the energy that we're selling to the United States is cheaper than the energy that they can buy from pretty much anywhere else around the world,"
U.S. President Donald Trump said on Thursday that BRICS nations could face 100% tariffs from the United States "if they want to play games with the dollar."
apple.news
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Senior official says tariffs are designed in large part to retaliate against Europe's comparatively high VAT rates
apple.news
Responding to a reporter’s question about the prospect that BRICS, a growing counterweight to the West, might establish its own currency, Trump declared that “BRICS is dead” since he first threatened tariffs against the group earlier this year.
Countries like Malaysia and Thailand have expressed interest in joining BRICS, seen as a counterweight to the West, in recent years.
apple.news
Countries have often chafed under the U.S. dollar’s premier status in world economic affairs. Just about every international transaction, even those involving two non-U.S. countries, is denominated in dollars. The European Union, Japan, and China have, at times, pushed for greater international use of their national currencies.
Grumbling intensified after Russia’s invasion of Ukraine in 2022. Washington used access to the dollar-based financial system to ensure
global compliance with its sanctions program, even if national governments still wanted to do business with Russia. That led to more transactions being denominated in the
Chinese renminbi or
Indian rupee to facilitate trade.
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Higher U.S. interest rates
made matters worse. Traders flocked to the dollar to take advantage of better yields in the U.S., strengthening the dollar and putting pressure on economies that relied on dollar-denominated imports. Yet if central banks increased interest rates to lessen downward pressure on their national currencies, they risked dampening economic growth.
(YouTube & “Trump Threatens BRICS Nations With 100% Tariff for De-dollarising | Vantage with Palki Sharma”)
Is Trump, with his tariff threats in all directions simultaneously against friend and allies as well as economic & political rivals actually strengthening the BRICS alliance to counter American economic blackmail annd intimidation?