It continues to be baffling beyond words how Canada has ended up being among the Administration’s “most wanted” trade villains. In a client note, Doug Porter, the chief economist at the Bank of Montreal, set aside the usual analysis for a “rant” that apparently he could just not keep in. Even big bank economists need to blow off steam, and in Porter’s case, he did so by pretty much demolishing the argument that Canada is the trade villain Trump makes us out to be.
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Porter…is by no means the only expert scratching his head over U.S. President Donald Trump’s decision to slap tariffs on steel and aluminium from Canada, Mexico and the EU — a move that has led to retaliation by Canada and the onset of a trade war.
Said Porter: “The President…[has railed] about Canada tweeting about our [supposedly] “highly restrictive” trade practices …[yet:]
- Canada is the world’s single biggest market for U.S goods and services (with Mexico in a strong second position).
- Canada buys more from the U.S. than Japan, Germany and Korea combined, and almost twice that of China even though it has a population of less than 37 million and
- Canada has much more closely balanced bilateral trade with the U.S. than against any other major nation the U.S. deals with.
…Trump [has] continued his attacks on Canadian trade policy…accusing Canada of unfairly protecting its agricultural sector…but if Porter is confused, it may be simply because he is expecting something from Donald Trump that the President can’t deliver: a consistent and rational approach to trade or any other issue.
Some economists have gone a little farther than Porter in taking this into account. Take, for instance, Jeffrey Sachs, the celebrated economist who runs the Earth Institute at Columbia University. In a recent column, Sachs argued that the explanation for Trump’s decisions is that he is “unwell and unfit to be President…By instinct, we strive to make sense of Trump’s nonsense, implicitly assuming some hidden strategy. There is none. … His is a psychopath’s trade war.”
There you have it, folks — expert economists on Trump’s trade agenda. Is it even worth negotiating with a Trump administration and if not, what next? Strange questions for a strange time.
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