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US/Canada Trade War ?

logger said:
How has Canada reacted to this tariff?
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Provincially, see my post above.

Federally, the Prime Minister has said he's exploring all options. What that probably means is to find some fabricated accusation about American subsidies, and put a tariff on that product.

In my industry, that would be call centers. We have about fifty thousand employees in the USA, we could be told to fire them all and return the work to Canada, for example.

80% of US auto manufacture is exported, for example. Americans export more than the import. The USA is very vulnerable to net job losses in the event of a protectionism war.
 
blutoski said:
Protectionism leads to fewer jobs overall, for everybody. Trade is Win Win. Protectionism is Lose Lose.
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Technically it just leads to lower paying jobs for everyone. The central bank can already drive job creation to the point where inflation starts to rise so “lost” jobs can actually be replaced fairly easily, Not only can the jobs be replaced, but since the replacements are in more efficient industries than those lost the new jobs support higher wages in both countries.
blutoski said:
Trade is Win Win. Protectionism is Lose Lose.
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Mostly true. Trade can unbalance mechanisms like organized labour that help ensure fair wealth distribution and there are issues around worker retraining and worker mobility. To a first approximation though, trade reallocates jobs to more efficient industries and more efficient industries can and usually do pay higher wages.
 
blutoski said:
Provincially, see my post above.

Federally, the Prime Minister has said he's exploring all options. What that probably means is to find some fabricated accusation about American subsidies, and put a tariff on that product.

In my industry, that would be call centers. We have about fifty thousand employees in the USA, we could be told to fire them all and return the work to Canada, for example.

80% of US auto manufacture is exported, for example. Americans export more than the import. The USA is very vulnerable to net job losses in the event of a protectionism war.
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Or they might do what they've always done and come to another agreement?
 
blutoski said:
The BC premier is already commencing a process to bar US coal import.

So, at this point the question is: how many US coal jobs are worth losing to save a few US logging jobs (if any)?
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Even if he doesn’t it doesn’t really change much. When the US buys less Canadian lumber demand for US$ to CDN$ conversion drops, which causes the CDN$ to drop. When the CDN$ drops it make US products more expensive in Canada and Canadian products more affordable in the US.

From a US perspective this means US business find their prices undercut by Canadian competition at home while others who had been exporting products/services to Canada face reduced demand because their precuts have effectively been made more expensive on Canadian markets. Not only does this mean job losses across the US economy, the jobs lost will be in higher paying industries than the ones that were “saved”
 
logger said:
Or they might do what they've always done and come to another agreement?
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Yep. Anything's possible.

Just saying that if Trump goes to the wall on this (as opposed to just doing this as a token gesture, expecting to abandon it later), it will be an actual trade war.

So, this is a common theme with Trump. If he means what he says, it's a problem.

So people console themselves by saying he's just kidding around, and there's nothing to worry about.
 
CapelDodger said:
However this works out for the US timber trade, I don't expect it'll do the US tourist industry any favours.
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I think it's more the airport arrest boondoggle back in January that cratered US tourism for the foreseeable future.

In unrelated threads, I was mentioning that my wife's entire department opted out of APA this year. The convention is apparently 50% booked. And this is not surprising: MDs in Canada are disproportionately 'ethnic'. Muslims, Jews, Sikhs, Atheists, mostly dark skinned with 'funny names'. Nobody wants to end up handcuffed in an airport. Not worth the risk.

My childhood babysitter is a travel agent in Sidney Australia and she says even Australians are picking 'safer' destinations this winter (meaning Julyish). US packages are down more than half in her agency.
 
lomiller said:
Even if he doesn’t it doesn’t really change much. When the US buys less Canadian lumber demand for US$ to CDN$ conversion drops, which causes the CDN$ to drop. When the CDN$ drops it make US products more expensive in Canada and Canadian products more affordable in the US.

From a US perspective this means US business find their prices undercut by Canadian competition at home while others who had been exporting products/services to Canada face reduced demand because their precuts have effectively been made more expensive on Canadian markets. Not only does this mean job losses across the US economy, the jobs lost will be in higher paying industries than the ones that were “saved”
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Yes, I admit I was simplifying, and just describing short term effects. In the long term, both countries experience accumulated effects and will adjust monetary policy. It's still going to be lose-lose.
 
blutoski said:
Yep. Anything's possible.

Just saying that if Trump goes to the wall on this (as opposed to just doing this as a token gesture, expecting to abandon it later), it will be an actual trade war.

So, this is a common theme with Trump. If he means what he says, it's a problem.

So people console themselves by saying he's just kidding around, and there's nothing to worry about.
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No I don't think it will be a trade war, for the simple fact that they need our money more than we need theirs.
 
logger said:
No I don't think it will be a trade war, for the simple fact that they need our money more than we need theirs.
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I'm not sure who the we and they are in this. They being Michigan auto workers and we being loggers?

And what's this about money? Trade is about living standards. More trade makes for higher living standards than without.

So, yes, in this day and age trade wars are less likely, because advanced countries that want to improve their standard of living participate in trade agreements like NAFTA and TPP.
 
It's funny. "Canada is not charging enough to graze on Canadian government land, so it undercuts US farm product!"

Meanwhile in the US, the government is well under-charging grazing rights compared to private land grazing rights, i.e. what farmers can and are willing to pay, with one side saying, "The People need to raise prices to get their money's worth out of Their Land", while the other side says, "Keeping prices low to grow food is the People's primary business!"
 
blutoski said:
I'm not sure who the we and they are in this. They being Michigan auto workers and we being loggers?

And what's this about money? Trade is about living standards. More trade makes for higher living standards than without.
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Meaning Canada will back down as they always have.
So, yes, in this day and age trade wars are less likely, because advanced countries that want to improve their standard of living participate in trade agreements like NAFTA and TPP.
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Agreed, which is why Trump is working them over a bit.
 
US Commerce chief says Canadian trade threats 'inappropriate'

CNBC said:
U.S. Commerce Secretary Wilbur Ross said on Saturday that threats of retaliatory trade actions from Canadian officials "are inappropriate" and will not influence final U.S. import duty determinations on Canadian softwood lumber.

"We continue to believe that a negotiated settlement is in the best interests of all parties and we are prepared to work toward that end," Ross said in a statement issued by the Commerce Department.

On Friday, Canadian Prime Minster Justin Trudeau said his government would study whether to stop U.S. firms from shipping thermal coal from ports in the Pacific province of British Columbia in response to the lumber duties.

Canada also is considering duties on exports from Oregon such as wine, flooring and plywood, a source close to the matter told Reuters, citing the role played by U.S. Senator Ron Wyden, an Oregon Democrat, in pressing for the lumber tariffs.
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logger said:
A better deal than what you had?
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It's only "better" for the tiny proportion of the US population directly involved in the logging industry - possibly even only those who own logging companies. OTOH everyone else will be paying higher prices for all kinds of goods and/or will have their own employment disrupted in the event that the new trade terms are less favourable for other industries.

That said, I think the Vox article you linked earlier may have the correct analysis. This is a trivial and simmering thing that Trump has blown out of all proportion to look like the big man on the international stage.
 
logger said:
Meaning Canada will back down as they always have.
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Winning their challenge to similar tariffs is “backing down”?

Not that it really matters, tariffs are really just a way for Government to pick winners and losers among US industry and punish consumers as an unintended consequence. It’s a real example of “big government” interference in the economy that causes far more harm than good. (As opposed to the false or badly formed objection to regulations we are normally presented with)
 
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