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The Establishments war on Donald Trump
See other The Establishments war on Donald Trump Articles

Title: A trade war Canada will lose to its larger, louder counterpart [Trump]
Source: National Post
URL Source: http://nationalpost.com/opinion/and ... -its-larger-louder-counterpart
Published: Jun 3, 2018
Author: Andrew Coyne
Post Date: 2018-06-03 20:26:39 by Tooconservative
Keywords: None
Views: 4956
Comments: 44

Presumably Donald Trump was warned of the furious response he could expect from the United States’ trading partners were he to proceed with his threatened tariffs on their exports of aluminum and steel. He went ahead and did so anyway.

This is one problem with trade wars: they seek to achieve in retrospect what they failed to achieve in prospect. Were he likely to have been deterred by retaliatory tariffs, of the kind that Canada, Mexico and the European Union have just applied to a fantastic assortment of U.S. goods, he would have been already.

And yet, deterrence having so conspicuously failed, they feel obliged to carry out the threat regardless. It is difficult to see how the reality of a trade war is more likely to succeed than the anticipation, especially when dealing with a man who tweets “trade wars are good and easy to win.”

Perhaps its advocates are right to believe that retaliatory tariffs will so focus congressional and public anger on Trump, notably in the states most affected, that he will be forced into a humiliating retreat. Perhaps Trump is right to calculate that people do not necessarily put cause and effect together quite so logically — his people in particular.

They may even be moved to rally around their besieged (as they see it) president and country. Wasn’t it precisely to “fight back” against these scheming foreigners, with their long history of preying upon American naivety, that Trump hit them with the tariffs in the first place?

Canada has treated our Agricultural business and Farmers very poorly for a very long period of time. Highly restrictive on Trade! They must open their markets and take down their trade barriers! They report a really high surplus on trade with us. Do Timber & Lumber in U.S.?— Donald J. Trump (@realDonaldTrump) June 1, 2018

At any rate, while we are testing this theory, matching the U.S. tariffs we decry as madness and ruin with mad, ruinous tariffs of our own, it is our consumers and businesses who will be the victims. This is the other problem with trade wars. In a real war, the guns are pointed at the other guys. But tariffs are self-inflicted wounds.

This is a hard point to get across in the heat of battle. Suggest that retaliation is unlikely to work against them and certain to hurt us, and the response is a volley of patriotic oaths: We have to do something! So you’re saying we should just sit there and take it? You have to stand up to a bully! Why don’t you just take out U.S. citizenship then?

It is neither appeasement nor treason to refrain from costly, futile measures that at best are unlikely to succeed and at worst will trigger an escalating series of attacks and counter-attacks. It is simply facing facts. The U.S. economy is more than 10 times as large as ours. Its exports to Canada account for two per cent of its GDP; our exports to them are 25 per cent of ours.

Even in concert with the other countries targeted, it is unlikely that we can cause Trump to alter course, for the simple reason that he is Trump. A normal president in possession of a rational mind might well be dissuaded by the united opposition of much of the democratic world. Trump is not that president. If he were he would not have slapped the tariffs on us in the first place, in open defiance not just of economic sense or international trade law, but of the very “military security” invoked as its justification.

This is a point that bears repeating. The sheer enormity of Trump, the impossible combination of every conceivable malignant quality in one man — comprehensive ignorance, pathological dishonesty, thoroughgoing corruption, and a seeming determination to use his time in office to cause as much damage in as many ways as he possibly can — is a constant invitation to denial. The mind does not want to believe what the eyes and ears are telling it, that an emotionally disturbed man-child has control of the White House. But it’s true. The nightmare is real.

It is folly, then, to expect him to respond as other presidents might. What we can do is learn from this experience. Trump cannot be reasoned with, and he cannot be appeased; he can be flattered, but not with any expectation it will be repaid. His word is worth nothing, and while he can be frightened or bought, he absolutely cannot be relied upon. He will do what he will do, and there isn’t a lot the rest of us can do about it. This goes far beyond the odd tariff.

It was evident from the start that Trump represented a total break with all previous norms and expectations of how a president should behave or what he should believe in. Among those norms, it is now incontrovertible, is much of the international order successive American presidents helped to build over many decades.


Poster Comment:

Trump will crush that Trudeau punk and make him cry.

Trump wants to dump NAFTA and have one treaty with Canada, a separate treaty with Mexico. And they will lose a lot more than we will in any trade war. And they know it, just as they know that Trump will not be deterred or appeased or bought off.

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Begin Trace Mode for Comment # 35.

#3. To: Tooconservative (#0)

Trump will crush that Trudeau punk and make him cry. Trump wants to dump NAFTA and have one treaty with Canada, a separate treaty with Mexico. And they will lose a lot more than we will in any trade war. And they know it, just as they know that Trump will not be deterred or appeased or bought off.

I think you miss the point and so does Trump. Trade is two way. That the US hasn't come out on top is a reflection of the fact that the US can no longer dominate world trade, they have become a smaller part of it. What was the idea behind NAFTA, that the market might expend? But it did expand to take advantage of lower costs. The EU has been advantaged by creating a single market, The US should be similarly advantaged but it cannot be forced. Unless the people of Mexico have industries and employment they cannot buy US goods

paraclete  posted on  2018-06-03   22:14:31 ET  Reply   Untrace   Trace   Private Reply  


#4. To: paraclete (#3)

We will get a better trade deal with Canada. There is no doubt. Trump won't even have to flood them with illegal aliens to make them give in.

I think it is very likely that Trump will prevail and get a much better trade deal with Mexico as well. Our leverage isn't quite as strong with Mexico but it is still huge.

With the EU, the picture is more complex. This is the perfect time for Trump to pick a trade fight with them because he is lowering the boom slowly on them over the Iran deal, giving them until fall (for the most part) to conclude all business with Iran and join our new sanctions regime against Iran. Since Trump is already pursuing that, this is the perfect time to go after their trade deficits with America as well. Even more so considering what a pack of weak sisters they are as NATO allies, especially Germany. But there are another half-dozen that pay nothing for their own defense, others that cheat and try to count things like military pensions as defense spending, etc.

We're going to find out who our allies are and who we can rely on. Good allies will have more favorable trade with us. As long as they kowtow to our Iran sanctions as well.

It wouldn't take that much for Trump to just destroy the cohesiveness of the EU. Don't imagine that he couldn't. They hate him so much because they know it. They are close to falling apart already and it would take so little to push them over the edge, a nightmare for France and especially Germany.

Trump is pursuing multiple trade and economic policies at once, not a piecemeal approach that has worked to our disadvantage for so many years.

Tooconservative  posted on  2018-06-03   22:32:01 ET  Reply   Untrace   Trace   Private Reply  


#5. To: Tooconservative (#4)

Trump is pursuing multiple trade and economic policies at once, not a piecemeal approach that has worked to our disadvantage for so many years.

Trump only has one policy, turn trade in favour of the US, but tariff walls are a bad idea because the US has more to loose than it has to gain

paraclete  posted on  2018-06-03   22:37:48 ET  Reply   Untrace   Trace   Private Reply  


#6. To: paraclete (#5)

tariff walls are a bad idea because the US has more to loose than it has to gain

That's where you're wrong.

They are the ones with trade barriers and trade deficits and we don't need them nearly as much as they need us. Yes, a trade war would be mutually destructive but it would hit them a lot harder than it would hit us.

That's before we even start meddling with their supply of Mideast oil and our own oil production. We are the petrodollar economy, in addition to being the top trading partner of all these countries.

They can just suck it up or suffer the consequences. I don't care whether they like it or not.

Tooconservative  posted on  2018-06-03   22:52:06 ET  Reply   Untrace   Trace   Private Reply  


#12. To: Tooconservative, hondo68, sneakypete, Pinguinite, Vicomte13, Deckard (#6)

a trade war would be mutually destructive but it would hit them a lot harder than it would hit us.

How would you measure the degree of damage? Decaying cities, crumbling infrastructure, mass real unemployment, rising personal debt,speculators getting richer, etc ...? What are your criteria?

You must be quite sheltered from the world out there.

A Pole  posted on  2018-06-04   2:37:38 ET  Reply   Untrace   Trace   Private Reply  


#29. To: A Pole (#12)

I think it's a waste of time to try to predict who's going to win or lose any trade war. Whatever happens will happen.

What is much less speculative is that the US national debt is going to ruin the USA eventually. Some $300 - $400 billion is spent each year just to pay the interest on the debt which does NOT provide a single penny of service to the American people, and of course a percentage of that payment in coming from new borrowing. Congress is incapable of passing any balanced budget, so it's just a matter of time when the system crashes, and when it does, foreign trade "winners" and "losers" will be very much redefined.

Pinguinite  posted on  2018-06-04   11:18:40 ET  Reply   Untrace   Trace   Private Reply  


#31. To: Pinguinite (#29)

What is much less speculative is that the US national debt is going to ruin the USA eventually. Some $300 - $400 billion is spent each year just to pay the interest on the debt which does NOT provide a single penny of service to the American people, and of course a percentage of that payment in coming from new borrowing. Congress is incapable of passing any balanced budget, so it's just a matter of time when the system crashes, and when it does, foreign trade "winners" and "losers" will be very much redefined.

I agree.

What we will DO, of course, is inflate our way out of it, because Americans cannot agree to slash the military or social services, or to raise taxes, sufficiently to ever close the gap.

Which means that either we will print money to pay the debt, or we will default. The political will will never exist to just outright default. So we'll inflate our way to solvency, as we always have.

Vicomte13  posted on  2018-06-04   11:38:59 ET  Reply   Untrace   Trace   Private Reply  


#32. To: Vicomte13 (#31)

Which means that either we will print money to pay the debt, or we will default. The political will will never exist to just outright default. So we'll inflate our way to solvency, as we always have.

That is the historical norm. It amounts to a tax via devaluation on everyone holding US dollars, including US debt. to pay it off.

Pinguinite  posted on  2018-06-04   11:44:30 ET  Reply   Untrace   Trace   Private Reply  


#33. To: Pinguinite (#32)

That is the historical norm. It amounts to a tax via devaluation on everyone holding US dollars, including US debt. to pay it off.

Exactly. All countries do this.

For example, we all know that the British "Pound Sterling" used to literally be a pound, 22 troy ounces, of sterling silver. What would 22 oz of silver be worth today in British Pounds "Sterling"?

Now consider this: the Italian word "lira" means pound. Obviously by the time the plenteous lira was dissolved into the Euro, a lira was worthy nowhere close to a pound of silver.

Vicomte13  posted on  2018-06-04   14:14:06 ET  Reply   Untrace   Trace   Private Reply  


#34. To: Vicomte13 (#33)

Now consider this: the Italian word "lira" means pound. Obviously by the time the plenteous lira was dissolved into the Euro, a lira was worthy nowhere close to a pound of silver.

Polish "zloty" means golden (adjective from "gold")

A Pole  posted on  2018-06-05   0:53:22 ET  Reply   Untrace   Trace   Private Reply  


#35. To: A Pole (#34)

How close in value is a zloty to an ounce, or a tenth of an ounce, of gold.

I'll hazard a guess that it's off by four or five orders of magnitude.

It's another demonstration of the point: all nations inflate their currency in order to have sooner what they would otherwise have to wait too long for.

Vicomte13  posted on  2018-06-05   6:25:39 ET  Reply   Untrace   Trace   Private Reply  


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