Sunday, March 04, 2018

Trudeau’s Government is screwing up the Trump Steel Tariff issue



And why is this happening? 

Because the Canadian government has not done its homework. 

It has been obvious for more than 18 months that a Trump presidency would pose special problems for the small Canadian economy, but you would never have guessed this from the activities and statements of the Trudeau government.

Trump won because he had views on the direction of the USA that millions of Americans agreed with, and voted for. 

A major view that Trump and his supporters hold is that the American worker has been sold out by the political and economic elites over a period of several decades, and one means this was done was through the free trade agreements, and globalization efforts.

Trump’s policy of reversing the deindustrialization of the US is going to be implemented by his tariff policies, amongst others.

This has been obvious from early on.

Now Trump has announced tariffs on steel and aluminium, aimed at increasing the production of those products in the USA, and using the massive excess capacity in steel and aluminium plants in the USA to produce more.

The Canadian government has failed to seriously analyze the Trump policies, as announced time and again during his campaign, and in the year he has been in office.

And this shows in their response to the tariffs, which might include Canadian exports to the USA (we are a major exporter of steel to the USA).

If our government had done its work properly, it would have analyzed the needs that Trump’s policies were trying to meet, and tried to revise Canadian policies to achieve a win-win solution that meets those needs and our needs.

For example: trying to change the Trump policy of America First and American production increases in its homeland, is a good attempt, but unlikely to change Trump or his millions of supporters.

But trying to meet his concerns that a powerful American needs a thriving steel industry, is a different approach. 

Trump’s spokespersons have clearly spelled out their concerns over the past year, and a major one is the security issue.

Just what has Canada offered the USA to resolve its concern about America being able to produce enough steel to meet its defence needs should the USA find itself in a protracted war?

So far I have heard no intelligent Canadian response to this.

Time to do some hard work in Ottawa. 

Start with a detailed, in-depth analysis of the expressed concerns of the Trump administration over the past year or so, and  then seek solutions that meet those needs, as well as our needs to export steel and aluminium.

Trudeau’s government might be surprised by how many win-win solutions they can come up with if they brainstorm the issues (not the perceptions, or the kneejerk free-trade-driven ideological reactions we have seen to date).

Canada needs a government that does the heavy lifting required to protect and expand our economic growth.

So start with this tariff problem, and solve it in a more meaningful way than the government has announced so far.

And then move on to breaking down trade barriers within Canada.

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