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Thursday, April 27, 2017

America Last! A Consumer Choice?

ANALYSIS

'America Last': A dangerous reaction to Trump's trade bullying: Don Pittis

Over-the-top protectionist rhetoric wins few friends among governments or consumers

By Don Pittis, CBC News Posted: Apr 27, 2017 5:00 AM ET Last Updated: Apr 27, 2017 5:00 AM ET

When U.S. President Donald Trump, here with Japanese Prime Minister Shinzo Abe in Florida in February, announced he was pulling out of the TPP Asian trade agreement, everyone assumed it was dead. But now Japan says it will relaunch negotiations excluding the U.S.

When U.S. President Donald Trump, here with Japanese Prime Minister Shinzo Abe in Florida in February, announced he was pulling out of the TPP Asian trade agreement, everyone assumed it was dead. But now Japan says it will relaunch negotiations excluding the U.S. (Carlos Barria/Reuters

About The Author

Photo of Don Pittis

Don Pittis
The Business Unit

Don Pittis was a forest firefighter and a ranger in Canada's High Arctic islands. After moving into journalism, he was principal business reporter for Radio Television Hong Kong before the handover to China. He has produced and reported for the CBC in Saskatchewan and Toronto and the BBC in London. He is currently senior producer at CBC's business unit.

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At first it was easy to discount U.S. President Donald Trump's outrageous comments on trade. They came in the same breath as vows to build a wall along the entire U.S.-Mexico border and remarks about dating his own daughter.

But now with the planned imposition of duties of up to 24 per cent on Canadian lumber, Trump has demonstrated to the world that he is not merely raving.

There are growing signs that the world is taking Trump's protectionism seriously.

 

Blame Canada

Canada's government has responded diplomatically, politely disagreeing with the discredited old saw that Canada is dumping softwood on U.S. markets. But British Columbia, whose huge forest industry would be devastated by such a duty, has shot back, demanding a ban on U.S. thermal coal shipments through the province. (Sorry, Alaska)

Heaping blame on foreign governments may play well among core Trump supporters. But Trump's outspoken comments are beginning to alienate some of the country's closest trade partners in a way that will only hurt the U.S. economy and damage the lives of the people who voted for him.

As in the past, companies that produce lumber in the U.S. will experience a windfall once the duty is imposed. But it is U.S. consumers who will pay the bill, says Queen's University trade expert Warren Mabee.

 

Pushing up prices

"It's going to push up prices for lumber. It's going to push up prices for houses. It going to make things more expensive for the average American," says Mabee. He says studies have shown the duty could increase the price of a new U.S. home by thousands of dollars.

USA-ECONOMY/HOUSING

While U.S. lumber producers will get a windfall from duties that devastate parts of the Canadian industry, U.S. consumers will pay the bill as house prices rise by thousands of dollars. (Mike Blake/Reuters)

As for dairy, Mabee says that from Trump's tweets you would never guess Canada is a net importer of dairy products from the U.S.

But of course Canada isn't alone in taking offence from the U.S. president's protectionist tack on trade.

Back when the new president took office, one his first official acts was to sign an order pulling the U.S. out of the Trans-Pacific Partnership, calling the move "great news for American workers."

Everyone assumed that was the end of the deal, but Japan's minister of finance Taro Aso has just announced his country will restart negotiations, leaving the U.S. out in the cold.

 

'Minus the U.S.'  

"We will start talks on an 11-member TPP, minus the U.S.," said Aso in New York last week.

Japan isn't the only one looking to start a club without inviting the U.S. China is already threatening to fill the role of Pacific trade leader with RCEP, the Regional Comprehensive Economic Partnership, a free-trade deal with 16 Asian countries.

MEXICO PROTEST

Mexican dairy farmers have complained about cheap imports that hurt their industry, but now the world's biggest importer of U.S. milk is looking for new sources. (Daniel Aguilar/Reuters)

According to a report yesterday from the Bloomberg business news service titled "America's $1.2 Billion Mexico Milk Trade Is Now at Risk," the world's biggest buyer of U.S. milk is looking for new sources, working on a deal with giant milk producer New Zealand and increasing imports from Europe.

"Mexico is looking to make sure they have market alternatives because of the rhetoric from the U.S. on renegotiating NAFTA," a U.S. agriculture and trade expert told Bloomberg.

 

Seeking markets outside the U.S.

Here in Canada trade hostility from the U.S. has led to a push to find new markets for lumber and other Canadian products. Canada's CETA agreement with Europe is one success, as Canada expands trade links with the world's second largest trade bloc. A similar deal between Europe and the U.S. seems far away.

Justin Trudeau, Li Keqiang in China

Chinese Premier Li Keqiang shakes hands with Prime Minister Justin Trudeau in Beijing on Aug. 31, 2016. In the face of U.S. protectionism, Canada is looking for new markets for its lumber. (Adrian Wyld/Associated Press)

Canadian international trade analyst Patrick Leblond says off-the-cuff comments by Trump have an effect, not just on government negotiators but consumers. For example, Trump's grouping energy with milk and timber as areas where Canada is trying to "take advantage" added new enemies.

"It has negative consequences," says Leblond, senior fellow with the Centre for International Governance and Innovation and a professor at the University of Ottawa. "It puts a damper on how people see the U.S. and how they see U.S. products."

He says the impact has already become apparent in the U.S. tourism industry as international travellers look for alternatives to Trump's United States, where minorities feel unwelcome and border guards demand cellphone passwords.

'America Last'

As Trump talks about "America First," consumers might be increasingly tempted to pursue a strategy of "America Last."

Patricia Cormack, an expert in a subject called consumer nationalism and co-author of the book Desiring Canada, says consumers have enormous power.

"The idea of boycotting Trump precedes these trade discussions at a more personal level, as all of us are consumers," says Cormack. "We don't need California wine. We've got tons of choices."

Of course in a globalized world market, products that seem to be from one country, such as California wine, may have inputs from many other countries, including the country doing such boycotting.

Trump's inflammatory and misinformed comments might be useful in softening up the other side in a real estate deal. But if they inspire old friends to develop plans for retaliation against the United States, they could be setting the stage for a trade war that will benefit no one.

Over-the-top protectionist rhetoric wins few friends among governments or consumers.

But the latest amazing news is that Trump will leave NAFTA in place – for now. 

Go figure.

8 comments:

  1. I adopted 'America Last' shortly after Trump was elected by enough stupid American voters to make him President and to make the USA the laughing stock of the world. There was no doubt in my mind then that his Presidency would end up being chaotic, destructive and obsessed only with himself.

    Consequently, we cancelled any further plans to snowbird or even take shorter vacations in the USA. This certainly isn't going to break the US economy but I feel much better about spending our money contributing to the Canadian economy instead of helping a raving, childish lunatic like Trump.

    Over the past 10 years or so, I've helped dozens of American friends and bloggers with various computer problems. I was glad to do this. Since Trump's election, however, I've stopped doing that as well, as I realized many of those I helped were supporters and fanboys of Trump. I no longer even acknowledge requests for computer help when I receive them from Americans.

    It's now Canada First for me until US voters finally wake up and realize they've elected a serial liar, woman assaulter, racist, self-promoting, egomaniac to be there President.

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  2. I apologize for the actions of Not My President and can assure you that we will remove him from power ......not soon enough for me and a large majority of the rest of the world.However,please don't be angry at all of us...we need your help to rid the world of this mad max!

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    Replies
    1. Don't you worry Richard, Here, on Campobello we know the difference between Trump's fan boys and the better majority half of Americans.

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    2. Same goes for Canadians on the opposite coast of Canada...Vancouver Island.

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    3. Thanks,Canada has always been our good neighbor and friend and with your always welcome help we will rid the world of this narcissistic jerk !

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  3. As an American, and a trump hater, I'm amazed at how most discussions of Cheeto Mussolini's idiotic babbling on trade, trade wars, and his imaginary "deal making skills" fail to discuss the elephant in the shadows. That being that everything this mentally ill wannabee dictator does, or even runs his gaping pie hole about, only causes the Chinese to smile, as they rack up the wins. Cheeto treats Mexico like they are a nation of undesirables who only want to harm America? no worries, The Chinese gently remind Enrique, "don't worry bro. we are here for you, and ready to start doing a half a trillion in business as soon as it suits you". Cheeto tells the entire Pacific rim to F' off, since TTP isn't the way to MAGA, the Chinese say, no problem, we are here for you, fellow Pacific nations. From the Arabic states to the tip of South America, the USA is being played by China, and Cheeto is simply too stupid to pay attention. China needs land, agricultural space, and markets for their tech. and industrial output, the stupidity of Trump only makes their goals far easier to reach, as other nations realize that the USA is a corrupt and crumbling bunch of idiots, led be a deeply disturbed fool, backed by a legislative branch who dances to the tune of their "donor class" AKA, the 1% and big business. This won't end well, and can't end soon enough.

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  4. Trump is a puppet of Russia...Trump and Putin mean to divide the country, break it's economy, isolate from friends. I really think Trump's for pick various official positions in office are meant to create as much damage as possible before they leave office. It's an attack on America and it's democracy...to bring it down and destabilize the entire world. I just hope some of our leaders can bring a quick end to this insanity. I do not understand why our former president did not deal with Russia's interference into our election early on.

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