America’s closest trading partners are in danger of becoming former close trading partners at a time when the American economy is booming and trade revenues are set to skyrocket.
Mexico threatened to punish U.S. hog farmers this week with a punitive tariff on some of their products. In reality, the measure will just make pork legs more expensive for the Mexican people while China and Southeast Asia pick up the slack.
The European Union threatened to put a 25% tariff on 200 American products like whiskey, motorcycles and peanut butter. This will make American products more expensive in the EU, and will likely push demand to Japan, Australia, Latvia and Singapore or open new markets for Tennessee Whiskey, Harleys and Skippy.
Canada is threatening to hit 128 American products with steep tariffs on $12.8 billion worth of U.S. goods. The complete list of proposed tariffs includes Iron and steel products, yogurt, coffee, whiskey and more.
The tariffs come in response to the Trump administration’s imposition of tariffs on steel and aluminum imported from the EU, Canada, and Mexico. The president asserts that having domestic steel and aluminum production capabilities is vital to America’s ability to defend itself. In today’s reactionary social-justice culture, he’s correct. At any moment, a provider of those commodities could take offense to a U.S. action and stop sending America the raw materials needed for infrastructure and defense. That cannot be allowed to impede America’s economy or her ability to defend herself.
The childish response from the EU, Canada and Mexico will likely destroy some of their domestic industries as they increasingly lose access to the U.S. marketplace. Manufacturers, suppliers and retailers will find new sources for their goods as the federal government is forced to increase tariffs on those countries in hopes of forcing good-faith trade negotiations. This is exactly the wrong time for those countries to lose opportunities to increase their market share in the American economy – it is red hot and getting hotter.
The steel and aluminum tariffs aren’t going away any time soon. They weren’t placed as a negotiating strategy, as some talking heads presume. They were put in place to make sure that the U.S. had a functioning steel and aluminum industry in-country as a matter of national security. There is no “deal” that is going to get rid of those tariffs.
What the EU, Canada and Mexico must realize is that the new America is protecting herself and her citizens. The government has an “America First” attitude and will not endanger itself to appear friendly, multi-cultural, global-minded or whatever other crap has been happening during past administrations. They must also realize that threatening to put taxes on our products entering their country will hurt their exporters more than those of the United States. The EU is struggling to grow as are Canada and Mexico – what are U.S. exporters really missing out on when compared to the best U.S. economy in generations? Internal consumption might make up for losses if the economy continues on its current trend.
While the U.S. is awash in stellar economic news, the best Canada can do is beat its own analyst’s terrible forecasts.
Gross domestic product expanded 0.4 per cent during the month following a 0.1 per cent contraction in January, Statistics Canada reported Tuesday in Ottawa. Economists anticipated a 0.3 per cent gain. The gains were due to idled oil and auto production coming back on line.
The EU? Yeah, their policies haven’t led to much better. In the first quarter for 2018, not a single member state saw better GDP growth than 1.6% while most were in the 1% range and a few were negative. The U.S. landed 2.9% in Q1 and has phenomenal growth ahead.
Mexico pulled in 1.1% growth in Q1 after a .9% Q4 – need I say more?
So, would Canada, Mexico and the EU like to trade with one of the hottest economies on the planet, while it’s booming – or would they like to continue thumping their chests like teenagers? The steel and aluminum tariffs aren’t going away, now – who wants to sell America some stuff?Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!