Author Topic: How will USA respond to Canada's terrible NAFTA demands? (split fm CF-188 Replacement)  (Read 14866 times)

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Offline Larry Strong

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Boy, a WTO ruling against the US will really show them, won't it?


Yeah seeings how
Quote
Trade experts say while the history of the softwood-lumber wars is long and complicated, they agree that Canada has repeatedly come out on top since the 1980s.

And where are we now.........

https://globalnews.ca/news/3460660/canada-softwood-lumber-battles/


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Larry

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Offline Altair

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Yeah seeings how
And where are we now.........

https://globalnews.ca/news/3460660/canada-softwood-lumber-battles/


Cheers
Larry
does it not have more weight to it  if more countries join in canadas complaint?
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Offline Larry Strong

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does it not have more weight to it  if more countries join in canadas complaint?

I imagine it would....it will be interesting to see what happens

However...........maybe Zoolander and his Keystonesque crew should be careful what they wish for.........

http://business.financialpost.com/news/economy/australia-new-zealand-back-trumps-fight-against-canadas-very-unfair-dairy-industry


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Offline Altair

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I imagine it would....it will be interesting to see what happens

However...........maybe Zoolander and his Keystonesque crew should be careful what they wish for.........

http://business.financialpost.com/news/economy/australia-new-zealand-back-trumps-fight-against-canadas-very-unfair-dairy-industry


Cheers
Larry
I would gladly watch the Canadian dairy cartel die if it means cheaper cheese and milk on grocery shelves.
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Offline ModlrMike

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I would gladly watch the Canadian dairy cartel die if it means cheaper cheese and milk on grocery shelves.

Considering that it's centered in Quebec, not much chance of that happening... although I'm happy to be proved wrong.
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Offline Larry Strong

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I would gladly watch the Canadian dairy cartel die if it means cheaper cheese and milk on grocery shelves.


I agree 100% with that. Was just saying, careful what you wish for........


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Larry
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Offline Cdn Blackshirt

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I agree 100% with that. Was just saying, careful what you wish for........


Cheers
Larry

That Lobby bought the Conservative Party leadership....so sadly our "supposed" free market reps are now endentured.
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Offline Altair

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That Lobby bought the Conservative Party leadership....so sadly our "supposed" free market reps are now endentured.
damn,  I forgot about that.

Now I really want scheer to lose so bernier can get another crack at the leadership.
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Offline AlexanderM

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This is a couple of weeks old but I hadn't seen it before and it is encouraging.

https://www.axios.com/senate-republicans-1515621750-ea2f15f1-aa6a-4a18-ae9d-43db2f4db220.html

Offline AlexanderM

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Offline Altair

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Raising steel and aluminum tariffs citing national security reasons and is willing to lower them for a better trade deal.

Dotard really has mastered screwing over allies.

Quote
President Donald Trump said the U.S. won’t lower tariffs on steel and aluminum from Mexico and Canada unless the two countries agree to a revamped NAFTA that’s fair to the U.S.

We have large trade deficits with Mexico and Canada. NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed. Also, Canada must..

— Donald J. Trump (@realDonaldTrump) March 5, 2018
“NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A. Massive relocation of companies & jobs,” the president said in a tweet Monday. “Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

Canada must treat American farmers “much better,” and Mexico must stop drugs from “pouring into the U.S.,” he added.
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Offline PuckChaser

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You had a good point until you tossed in the childish name calling.

Back on topic, however, Trump has a point. We can't cry integrated economy for steel and aluminum exports while on the other hand we supply manage and subsidize dairy and other farming industries.

More and more I'm thinking if we bail on Mexico, we can sort this NAFTA negotiation out while doing a much better job protecting Canadian industries. Sometimes you have to look out for number 1.

Offline daftandbarmy

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You had a good point until you tossed in the childish name calling.

Back on topic, however, Trump has a point. We can't cry integrated economy for steel and aluminum exports while on the other hand we supply manage and subsidize dairy and other farming industries.

More and more I'm thinking if we bail on Mexico, we can sort this NAFTA negotiation out while doing a much better job protecting Canadian industries. Sometimes you have to look out for number 1.

Go East, Young Man..

The BC forest products market used to be completely reliant on the US but, since the early 2000s, has diversified almost 30% of its products eastwards, into China and elsewhere largely as a result of ongoing trouble with the US via the Softwood Lumber Agreement.

https://www.bcfii.ca/chinas-focus-green-building-opens-opportunities-bc-wood-products
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Offline winnipegoo7

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Go East, Young Man..

The BC forest products market used to be completely reliant on the US but, since the early 2000s, has diversified almost 30% of its products eastwards, into China and elsewhere largely as a result of ongoing trouble with the US via the Softwood Lumber Agreement.

https://www.bcfii.ca/chinas-focus-green-building-opens-opportunities-bc-wood-products

Nice try. China is WEST of BC. You can't fool me  ;)

Offline Rifleman62

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I believe we ship raw timber West, not lumber, thus mills are going out of business.

Anywho, if we shipped the product East, Montreal would object.
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Offline AirDet

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Nice try. China is WEST of BC. You can't fool me  ;)

It could be east... it`s just a little further. :rofl:
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Offline pbi

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Quote
Back on topic, however, Trump has a point. We can't cry integrated economy for steel and aluminum exports while on the other hand we supply manage and subsidize dairy and other farming industries.

I wonder what dairy farmers would think about this? We have lots of them in Ontario, especially here in the eastern regions. While Liberals are not usually all that strong outside urban areas, Tories traditionally draw a fair amount of support from rural voters, and as far as I know most dairy farmers and cheese producers are located in rural areas.

The US engages in the direct subsidization of its agricultural sector, under different historical legislations such as the Grain Futures Act, the Agricultural Marketing Act,  and  the Agricultural Adjustment Act, or the 2002 Farm Bill.
(Summary here at: https://en.wikipedia.org/wiki/Agricultural_subsidy#United_States
They don't often talk about it, but they do it. And, consider, their agricultural output in some sectors could probably flood ours out of existence. How much of a level playing field are Canadian farmers on when facing the US agriculture industry?

If we decide not to protect our agricultural sector, or subsidize them directly like the US does, what happens to those farmers (many of whom are struggling now) and the communities they live in? Not all farmers support supply management, but my sense is that most do because no government has ever really gotten rid of it.

This is always the dilemma of protectionism: it can provide stability, security and good jobs in the protected industries and thus in the communities those industries are in. But, it means that consumers end up paying more than if cheaper foreign good enter the country unrestricted.

Which is the more important result?
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Offline Cdn Blackshirt

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I read an interesting counter-point to the "Trump is being mean to us" meme, which is easily regurgitated by Canadian media.

It basically broke down how little steel Canada actually produced vs the slightly-value add 'products' we shipped into the United States.

Same issue with Aluminum from Mexico.

Where they went with this was that at the end of the day, a huge portion of the raw material Canada uses for products which it then ships duty-free into the United States is in fact Chinese.

Same issue with aluminum coming in from Mexico.

Not sure if anyone has read about the $2 billion aluminum ingot pile in Northern Mexico, but the elephant in the room is this is all about China's cheating....it's just no one has the balls to call them on it.
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Offline Altair

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I read an interesting counter-point to the "Trump is being mean to us" meme, which is easily regurgitated by Canadian media.

It basically broke down how little steel Canada actually produced vs the slightly-value add 'products' we shipped into the United States.

Same issue with Aluminum from Mexico.

Where they went with this was that at the end of the day, a huge portion of the raw material Canada uses for products which it then ships duty-free into the United States is in fact Chinese.

Same issue with aluminum coming in from Mexico.

Not sure if anyone has read about the $2 billion aluminum ingot pile in Northern Mexico, but the elephant in the room is this is all about China's cheating....it's just no one has the balls to call them on it.
http://business.financialpost.com/opinion/terence-corcoran-why-president-trump-is-on-the-right-side-of-the-steel-trade-war

Quote
Steel has also been a nationalist, subsidized and protected industry in many countries for most of the last 100 years, a status that’s been hard to shake. The recent crisis was triggered by the 2008 economic collapse, which saw steel demand plunge. As demand recovered after 2008, the global capacity to produce steel soared, most of it in China. The usual snapshot statistic shows 2016 steel-making capacity of 2,369 million metric tonnes (mmt) compared with demand of 1,628 mmt. The gap implies more 700 mmt of excess capacity, equal to almost double the combined annual steel production of all of North America, Japan and the EU.

That 700-mmt world steel capacity/production gap has grown from 542 mmt in 2012, the year the European Commission launched its “Action Plan” for a competitive steel industry.

Since then, the OECD has been at the forefront of attempts to resolve the growing capacity problem. Two years ago the OECD, at a “high-level meeting” on the issue, warned that “the global steel industry is currently in the midst of a serious crisis that is leading to considerable trade disturbances and escalating tensions between trading partners.”

As demand declined, world steel exports continued to rise. In response, the OECD said governments have “resorted to measures including import duty increases, government subsidies and other support measures, export incentives, trade finance, investment measures, import quotas, minimum import prices, and surveillance mechanisms. While these support measures might provide temporary relief, they do not provide long-lasting solutions to help the industry and can lead to further trade tensions between steel trading partners.”
I don't side with the conclusion of the article, but I am posting it for the raw stats.

There is a global glut of steel.  The problem here is the premise that trump is raising tariffs because of that. If that were the case, why would he eliminate them for a better deal on NAFTA? It undermines the entire rational behind the tariffs in the first place.
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Offline FJAG

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http://business.financialpost.com/opinion/terence-corcoran-why-president-trump-is-on-the-right-side-of-the-steel-trade-war
 I don't side with the conclusion of the article, but I am posting it for the raw stats.

There is a global glut of steel.  The problem here is the premise that trump is raising tariffs because of that. If that were the case, why would he eliminate them for a better deal on NAFTA? It undermines the entire rational behind the tariffs in the first place.

And therein lies the problem.

As I understood Trump, the issue is a strategic one in that the US requires a healthy Steel and Aluminum industry in order to ensure it's supply if and when dispute s with foreign producers choke supplies.

The long term intent with tariffs is to increase imported costs so that domestic producers can thrive and ramp up facilities and production. This, in part, (I think) is why there was such a fuss about the Gordie Howe bridge and the requirement that only US and/or Canadian and not Chinese steel be used.

The problem is that steel rarely goes to consumers as a raw product. It goes by way of manufactured products where the consumer doesn't know and care about content, only price. Adding tariffs does not ban imports, merely makes them more expensive. It's a game of shifting prices and tariffs which may or may not cause a ramping up of a domestic industry. If manufacturers can offset the higher prices by way of passing them off on the consumer then they still won't care where the steel comes from so long as it's the cheapest at that moment.

If one wants to guarantee that a strategic industry will survive then it is a bit risky to leave that at the whim of the capitalist marketplace. It's best done by nationalizing sufficient portions of the industry so as to meet ongoing and projected strategic needs. i.e. create a crown steel corporation and then mandate that all defence products, all national highway infrastructure, all federal construction projects use that corporation's product. It's counter intuitive to free enterprise but if the resource is truly a "strategic" one then it may be necessary.

The problem with Trump is that he has a large number of unofficial advisors who have their own special interests and agendas. He has just said that he likes to see two opposing viewpoints fought out and then he makes his decision. Quite frankly, Trump has neither the experience nor the intellectual depth to properly weigh conflicting arguments in order to determine what is in the nation's best interest. To call steel and aluminum a strategic asset and then consider it fine to leave a component in Canadian hands so long as there's a decent NAFTA agreement is contradictory. It shows that he is playing with negotiation positions--focusing on the art of the deal--rather than an actual strategic end state.

 :cheers:
« Last Edit: March 07, 2018, 21:28:05 by FJAG »
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Offline Journeyman

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The problem with Trump is that....
That could be a never-ending sentence.     :nod:
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Offline Oldgateboatdriver

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See my comments in yellow:

And therein lies the problem.

As I understood Trump, the issue is a strategic one in that the US requires a healthy Steel and Aluminum industry in order to ensure it's supply if and when dispute s with foreign producers choke supplies.

It does seem to be the original problem in Trump's sight. But it is incorrect.

Let's start with aluminium. It requires two main ingredients: Bauxite as the raw material and incredibly large amounts of electricity (Canada's largest producing province, Quebec, could - if it shut its aluminium smelters down, provide 30% of the whole of Ontario electricity needs. That's how much electricity is required). Bauxite is NOT mined in the USA, or Canada actually - only Jamaica mines some in North America - but comes mostly from Brazil, Australia and Indonesia. Moreover, at the actual aluminium production level, Canada produces 14% of the world aluminium, while the USA produces 3.5%. The US consumes, however, 20% of the world's aluminium, and we, Canada, make up 63% of its shortfall.

So two things here: First, there is no way in hell that the US can ramp up its aluminium production to the point of near self-sufficiency (heck, they already have a hard time generating the electricity they currently need, and couldn't do it without B.C., Manitoba and Quebec). They could, however, ramp up and work with Canada so that, between the two of us, we could make a self sufficient bloc for "national" security reasons. Anybody ever wondered why we have a fighter base at Bagotville? It was set up there during WWII specifically to protect the critical aluminium production facilities required for the war effort of Canada and the USA.

Steel is pretty close to the same situation: Between Canada and the USA, we mine enough iron ore and have enough smelters facilities to provide for BOTH of our needs, but without Canadian iron ore (Canada and he US mine almost exactly the same amount of iron ore, year in year out), the USA is short on ore for production. Similarly, the trade in finished product (read: steel) between the USA and Canada is a zero sum game. We export to the USA as much steel as we import from them - it's just that plants producing this steel product or that steel product, as the need may, be are in either one country or the other.

So the real "national security" aspects of these two specific product for the USA should actually direct the USA towards an integrated Canada/US open market, as is right now under NAFTA.


The long term intent with tariffs is to increase imported costs so that domestic producers can thrive and ramp up facilities and production. This, in part, (I think) is why there was such a fuss about the Gordie Howe bridge and the requirement that only US and/or Canadian and not Chinese steel be used.

The problem is that steel rarely goes to consumers as a raw product. It goes by way of manufactured products where the consumer doesn't know and care about content, only price. Adding tariffs does not ban imports, merely makes them more expensive. It's a game of shifting prices and tariffs which may or may not cause a ramping up of a domestic industry. If manufacturers can offset the higher prices by way of passing them off on the consumer then they still won't care where the steel comes from so long as it's the cheapest at that moment.

I think that "how" the product goes to the consumer is irrelevant. If the argument is national security, then it is the availability of the raw product to US manufacturers of products - principally defence related manufacturing - that matters.

If one wants to guarantee that a strategic industry will survive then it is a bit risky to leave that at the whim of the capitalist marketplace. It's best done by nationalizing sufficient portions of the industry so as to meet ongoing and projected strategic needs. i.e. create a crown steel corporation and then mandate that all defence products, all national highway infrastructure, all federal construction projects use that corporation's product. It's counter intuitive to free enterprise but if the resource is truly a "strategic" one then it may be necessary.

The day something in the USA is nationalized, even for strategic needs, is the day the end of times will occur.  ;D

The problem with Trump is that he has a large number of unofficial advisors who have their own special interests and agendas. He has just said that he likes to see two opposing viewpoints fought out and then he makes his decision. Quite frankly, Trump has neither the experience nor the intellectual depth to properly weigh conflicting arguments in order to determine what is in the nation's best interest. To call steel and aluminum a strategic asset and then consider it fine to leave a component in Canadian hands so long as there's a decent NAFTA agreement is contradictory. It shows that he is playing with negotiation positions--focusing on the art of the deal--rather than an actual strategic end state.

 :cheers:

 :cheers:

Personally, and considering the aluminium market parameters I outlined above, I have said, in jest, that our answer to President Trump should be to publicly state something like this:

"Oh my god! We never realized that our selling our aluminium to you was actually affecting your national security. We have had a unified front on the national defence of North America since WWII and the last thing we want is to negatively affect the USA's national security. So forget about this meagre 10/25% tariff. If our actions in providing you with steel and aluminium are negatively affecting your national security, we will immediately STOP selling you any aluminium, steel or even iron ore. You can thank us later!"

Then just watch as the US stock markets tank by 40% in one day.

 ;D

Offline tomahawk6

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It looks like Trump will look at trade with Canada and Mexico on a case by case basis.picking a trade war with countries interlocked with the US economy would be ill advised.

http://thehill.com/homenews/administration/377233-wh-mexico-canada-could-receive-tariff-exemptions

The White House said Wednesday it may exempt Mexico, Canada and other nations from President Trump's tariffs on steel and aluminum imports.

"There are potential carve-outs for Mexico and Canada based on national security, and possibly other countries as well, based on that process,” White House press secretary Sarah Huckabee Sanders told reporters, adding other nations could receive exemptions as well.

"That would be a case-by-case and country-by-country basis but it would be determined [by] whether or not there is a national security exemption," she said.

Offline FJAG

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. . .

Then just watch as the US stock markets tank by 40% in one day.

 ;D

What bothers me a lot is that I actually hold a dollar or two in US stocks. Every time the dollar drops my portfolio actually goes up based on the US stocks being worth more in Canadian dollars.

I actually hate seeing US stocks tanking because when they do . . . well it's kind of obvious.  :'(

 :cheers:

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Offline Pencil Tech

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See my comments in yellow:

Personally, and considering the aluminium market parameters I outlined above, I have said, in jest, that our answer to President Trump should be to publicly state something like this:

"Oh my god! We never realized that our selling our aluminium to you was actually affecting your national security. We have had a unified front on the national defence of North America since WWII and the last thing we want is to negatively affect the USA's national security. So forget about this meagre 10/25% tariff. If our actions in providing you with steel and aluminium are negatively affecting your national security, we will immediately STOP selling you any aluminium, steel or even iron ore. You can thank us later!"

Then just watch as the US stock markets tank by 40% in one day.

 ;D

Thanks for that. I really learned something.