Canada and the US: Whither the common ground?

[Machjo]

Why would the mass of a product matter?

The US depends on importing raw resources and exporting finished products. If Canada imposes an export tariff by weight to the US, the Canadian exports that would suffer the most would be cheap but heavy raw materials while those that would benefit the most would be expensive lightweight value-added products.

For example, a 1 dollar per kg tariff on Canadian exports would be a very high tariff on unprocessed gas, but a very low one on a cell phone or computer, and it would not even apply to software.

This means that Canadian exports if bulk unprocessed products would become uncompetitive. This would push the value of the Canadian dollar down, and so help the export of lightweight or weightless high end products and services.

On the US side, it would devastate US manufacturers that would depend on Canadian raw materials to manufacture their products. Yet since it would be an export tariff and not an import tariff, the US would have no control over it.

Some US manufacturers might even move to Canada to benefit from the lower CAD since the strong US dollar would make them too uncompetitive in the US.

The US could counter an import tariff with an import tariff of its own. But how would it counter an export tariff?

If Mexico should introduce an export tariff by weight too, while US resource-extraction companies would love it, US manufacturing would be gutted. It would be like imposing the Dutch disease onto the US by pushing the US dollar up, up and beyond. All the US could do would be to extract more resources from its ground, maybe export some if it can, must mostly import high-end products that would just be too expensive to produce there.

 

[taxslave]

Trump's successor might not be so keen on Canada building tade relations with Russia. This gives Canada a four-year window to take advantage of this golden opportunity.

One area in which I think Canada should give in in any renogotiation of NAFTA is in Canadian Content rules.

Why would you want to trade with Russia> They don't have anything we need and don't have any money.

 

[Machjo]

Why would you want to trade with Russia> They don't have anything we need and don't have any money.

You're exaggerating.

Russians have money and might want to buy things we have.

 

[taxslave]

You're exaggerating.

Russians have money and might want to buy things we have.

Some people in Russia have money but the country really doesn't.

 

[Machjo]

Some people in Russia have money but the country really doesn't.

Well, if we trade with Russia, then maybe more Russians will have money, no?

 

[petros]

The US depends on importing raw resources and exporting finished products.

Fact or an assumption?

Well, if we trade with Russia, then maybe more Russians will have money, no?

No. Not at all.

 

[Machjo]

Fact or an assumption?



No. Not at all.

We export finished products too, yes, but the US still imports far more raw materials that it exports. So Canada imposing an export tariff by weight would inevitably hurt US manufacturing in a major way. It would hurt Canada's resource industry too, but since the US needs them, it would have no choice but to grin and bear it.

It could import from elsewhere, but distances would still make it more expensive to do so.

 

[PoliticalNick]

If Canada is going to build stronger relations with the US, Trudeau will need to find common ground with Trump, but that will be a challenge.

Trump is anti-immigration, Trudeau pro-immigration.

Trump is anti-trade, Trudeau pro-free-trade.

Trump intends to lower taxes and increase spending on the military, and cares little for balanced budgets. Trudeau cares little for balanced budgets too. Okay, some common ground there, but ground we wish they didn't share in common or, better yet, that they both disagreed with. Trudeau could exploit that in that if Trump increases spending and reduces taxes, that could stimulate the US economy and postpone a crash into the future. Trudeau could take advantage of this to ride the wave by reducing expenditure. Unfortunately, Trump's anti-trade stance could make that difficult.

Both Trump and Trudeau appear to want to help the poor. That puts them in the same ball park at least. But the devil is in the details. I figure if they are going to find any common ground, it will be burried somewhere in the long grass of that large ball park.

Another possible point of common ground is that Trump is militarily somewhat non-interventionist. Trudeau tends in the same direction. This could give Trudeau a chance to build trade relations with Russia. Even if Trump has little interest in promoting trade with Russia, at least he's not Russophobic and so would be at worst indifferent to Canada pursuing such trade relations. Besides, Canada might need to compensate for loss of trade with the US if Trump renegotiates NAFTA, so let's take advantage of that.

As Trump decides to ramp up resource exploitation in his own country, Canada's resource industry will inevitably take a hit. With that, there is not even a point in trying to counter the inevitable. Instead, go ahead with a carbon tax but lower other business taxes, income taxes, and value added taxes and let our manufacturing industry shine. As the US extracts more oil and Canada exports less, that will inevitably raise the US dollar relative to the Canadian. This would be a golden opportunity for Canadian manufacturing... unless Trump decides to raise tariffs against it. But if Trump does that, that will also exacerbate inflation in the US, so he might not do it if we're lucky.

You should post the link to where you copied this from. And my finger slipped...I didn't want to give you a green for this drivel.

Let's be honest. The US represents 10X Canada's population. So if Trump gives Canada an ultimatum, he's got us by the balls and we'll have to accept unless we can think outside of the box.

My recommendation if he forces Canada into a corner is to accept (since we'd have not much choice in the matter anyway) but declare our port cities free economic zones that would stand outside the boundaries of the new Canada-US trading block. That way, businesses that trade mainly by rail or truck between Canada and the US could move out of those cities so as to avoid US tariffs, and our businesses that don't trade much with the US but rely on international trade could move into a port city. It would face US tariffs of course, but if it doesn't trade much with the US anyway, who cares? The FEZ could drop tariffs unilaterally to the rest of the world.

You get stupider by the second

 

[Machjo]

You should post the link to where you copied this from. And my finger slipped...I didn't want to give you a green for this drivel.



You get stupider by the second

What a perfect example of an ad hominem.

Teacher: What's 1x3?

Student: 4.

Teacher: Ah, that would be correct for addition where 1 added to 3 makes 4, but in multiplication, it means 1 added three times, 1+1+1. So what's 1x3?

Student: 3.

Political Nick: What's 1x3?

Machjo: 3.

Political Nick, lacking the necessary language skills to explain the error: You're so stupid. It's 5.

 

[Murphy]

Here's a thought. Rather than worrying about what might happen and how we could counter any possible bad juju between the US and Canada, take a deep breath and realize that:

a. Getting worked up about something that hasn't happened is stressful;
b. It's the US. We've lived beside them for a long time. Through Democratic and Republican presidents. We're still around - undamaged and friendly; and
c. Whatever happens won't affect you as much as you think. Take a pill. (It's rumoured however that the Donald is sending his armed forces to Canada at night and will slaughter all the 'non-beleivers' in their beds.)

 

[pgs]

Here's a thought. Rather than worrying about what might happen and how we could counter any possible bad juju between the US and Canada, take a deep breath and realize that:

a. Getting worked up about something that hasn't happened is stressful;
b. It's the US. We've lived beside them for a long time. Through Democratic and Republican presidents. We're still around - undamaged and friendly; and
c. Whatever happens won't affect you as much as you think. Take a pill. (It's rumoured however that the Donald is sending his armed forces to Canada at night and will slaughter all the 'non-beleivers' in their beds.)

You might want to add that Machjo can trade with whomever he wants .

 

[darkbeaver]

If Canada is going to build stronger relations with the US, Trudeau will need to find common ground with Trump, but that will be a challenge.

Trump is anti-immigration, Trudeau pro-immigration.

Trump is anti-trade, Trudeau pro-free-trade.

Trump intends to lower taxes and increase spending on the military, and cares little for balanced budgets. Trudeau cares little for balanced budgets too. Okay, some common ground there, but ground we wish they didn't share in common or, better yet, that they both disagreed with. Trudeau could exploit that in that if Trump increases spending and reduces taxes, that could stimulate the US economy and postpone a crash into the future. Trudeau could take advantage of this to ride the wave by reducing expenditure. Unfortunately, Trump's anti-trade stance could make that difficult.

Both Trump and Trudeau appear to want to help the poor. That puts them in the same ball park at least. But the devil is in the details. I figure if they are going to find any common ground, it will be burried somewhere in the long grass of that large ball park.

Another possible point of common ground is that Trump is militarily somewhat non-interventionist. Trudeau tends in the same direction. This could give Trudeau a chance to build trade relations with Russia. Even if Trump has little interest in promoting trade with Russia, at least he's not Russophobic and so would be at worst indifferent to Canada pursuing such trade relations. Besides, Canada might need to compensate for loss of trade with the US if Trump renegotiates NAFTA, so let's take advantage of that.

As Trump decides to ramp up resource exploitation in his own country, Canada's resource industry will inevitably take a hit. With that, there is not even a point in trying to counter the inevitable. Instead, go ahead with a carbon tax but lower other business taxes, income taxes, and value added taxes and let our manufacturing industry shine. As the US extracts more oil and Canada exports less, that will inevitably raise the US dollar relative to the Canadian. This would be a golden opportunity for Canadian manufacturing... unless Trump decides to raise tariffs against it. But if Trump does that, that will also exacerbate inflation in the US, so he might not do it if we're lucky.

Contrasting objectives and allies, Fortress North America and the Amero loom in our future,

The Russians are coming.

 

[Curious Cdn]

Why would you want to trade with Russia> They don't have anything we need and don't have any money.

We compete against them directly (except that we have fed them with our grain since the 1960s). Rubles are too rough to wipe your a55 with but there really isn't any other use for them.

Russia ... Basket case ... who could kill us all fifty times over ...

 

[Ron in Regina]

We export finished products too, yes, but the US still imports far more raw materials that it exports. So Canada imposing an export tariff by weight would inevitably hurt US manufacturing in a major way. It would hurt Canada's resource industry too, but since the US needs them, it would have no choice but to grin and bear it.

It could import from elsewhere, but distances would still make it more expensive to do so.

Do you have any family or friends that farm, or ranch, or mine, or work in the oil/gas sector?
Logging or Timber? Or any service industry related to any of the above? There's a big chunk
of Canada west of Metropolitan Toronto.