Spiting America's Trade Health

"Let's be clear, this is a rebuke [U.S. senators voting 88 - 11 in favour of a non-binding motion calling for more authority for Congress in the use of "national security" tariffs by the administration] of the president's abuse of trade authority."
"Can you imagine being Canada and being told your steel and aluminum exports to the United States [represent] a national security threat?"
Senator Jeff Flake, Trump critic

"Canada does have allies in Washington and Congress."
"Here in Ohio, U.S. Senator Sherrod Brown, who is one of the most anti-NAFTA, pro tariff members of the Senate you will meet ... even he's saying that Canada should be exempted -- as well as Mexico and the European Union -- from steel and aluminum tariffs."
"I really caution people when they say, 'We'll wait for a Blue [Democrat] wave'. This is the new normal on trade."
Dan Ujczo, trade lawyer, Columbus, Ohio

"We're just trying to make sure our strong ties and friendship with the U.S. are maintained, and we're not dragged into whatever is irritating the president."
"Our workers have done nothing. They don't deserve to be treated like this. If he's angry or perturbed in some way with China or with Mexico, deal with those issues. Don't drag your best friends, your allies into this dispute." 
"[The issue is automobiles and auto parts] not tanks, not battleships."
Jim Wilson, Ontario PC Cabinet, Minister of Economic Development

"It's clearly too early now to say if this investigation [hearings of the U.S. Commerce Department] will ultimately result in a Section 232 recommendation on national security grounds."
"But President Trump does understand how indispensable the U.S. automobile industry is ... it provides a backbone for our industrial economy ... "
Wilbur Ross, U.S. Commerce Secretary

Traders on the floor of the New York Stock Exchange occasionally worry about a trade war. Photographer: Bloomberg/Bloomberg

Donald Trump seems never to be as satisfied as when whatever he does or says creates controversy, a huge disturbance that keeps him in the limelight. In show business there was that old adage that publicity -- any kind, good or bad -- is always positive for visibility. And President Trump thrives on publicity, on being centre stage, on drawing attention to himself, on drawing on the powers of the presidency to invoke authority and command, even though his demeanor and demeaning behaviour contradicts that very authority and command.

But he certainly has the world's attention. International trade has become regularized and normalized in an interdependent mercantile, productive world where natural resources of one country are prized by another and finished manufactured goods and technical services are traded and trade-offs are made to the advantage of all participating member countries in vast free trade deals that lift the emerging economies into the next-up sphere of success in hopes of matching and eventually overtaking those countries whose economies have long since prospered.

As geographic neighbours who share not only two-thirds of a continent, but similar social values, heritage and culture, Canada and the U.S. are less trade adversaries than they are trade companions and have been since the advent of the original Canada-U.S. Free Trade Agreement, and its successor that brought in Mexico, to cover the continent. All three countries gained, in good measure with the growth of GDP as their economies and production became interwoven and interdependent. Because of its huge internal market the U.S. has no real need of enlarging its export market, but Canada with a tenth of the population is hugely dependent on export.

And as neighbours most of Canada's exports -- traditionally heavy on resource extraction -- has gone to its southern counterpart. Canada often feels -- and with good reason -- that it lives next to an economic bully, but one usually kept in check by Americans who do value fairness. Until the advent of hyper-competitive Trump who never saw an opportunity to strong arm a competitor that didn't appeal to his pathological impulse to control. Except that his current strong arm tactics are backfiring, taking Trump and his administration advisers by surprise.

Simply put, they're a little perturbed that the countries the Trump White House has disadvantaged through the imposition of tariffs -- claiming that the world suckles on America's teats and gives it no credit, leaving it in the lurch of huge trade imbalances that Trump is determined to reverse -- are reciprocating in kind. Trump issues edicts, he is not prepared to bargain; his way must prevail. So when Europe and Canada and Mexico respond to his tariffs with those of their own he is enraged at their unacceptable audacity.

And despite that the unfair trade practices that Trump accuses others of is a game the U.S. has itself long played, under Trump it has magnified enormously. Trade wars have no winners, though Trump insists he will 'win' for the U.S. in reversing and cancelling trade agreements unilaterally. The push-back has infuriated  him, whether from his targets or from his critics within his own country, it maddens him to absurd accusations, alienating former allies and polarizing his own population.

Trump-imposed tariffs and the resentment they engender are as nothing compared to the fall-out that has begun and will proliferate, harming mostly the American public who see that tariffs on lumber have increased housing construction costs, closed down newspapers when bulk newsprint becomes unaffordable, will make automobiles more expensive with tariffs on auto parts, and creates untenable job losses. His no-holds-barred confrontational demands and accusations are roiling trade everywhere, but the fallout will be felt painfully in the home states that have supported him.

In that sense, it will be a 'just' trade war, but in no other will it profit anyone.

President Donald Trump has so far suffered little political blowback for his tariffs and trade threats. But he and his party could soon begin to face consequences as companies begin reporting lower earnings, reassessing their supply chains and holding back on investments. | Luca Bruno/AP Photo

"The unity is as remarkable as it is unprecedented."
"The greatest threat to the U.S. industry at this time is the possibility that the administration will impose a tax on imports."
John Bozella, president, Association of Global Automakers 

"We’re already hearing complaints now from companies, so by the time we get to the midterms, you’re going to be hearing governors, mayors, Congress complaining about jobs, about cost increases, about problems."
"The question is: Will that be strong enough to offset the idea that we have to get tough on our trading partners, and that our jobs are being stolen overseas?"
Carlos Gutierrez, former U.S. Commerce Secretary

"If this escalates into a full-blown trade war, the innocent victims are going to be American consumers."
"That’s what we’d like to avoid."
Matthew Shay, president and CEO , National Retail Federation