Nobody wins a trade war

 

Trade issues are at a boiling point as the United States instigates disputes across multiple sectors based on the notion of ‘America First’. After just a few weeks, the results have been nothing short of disastrous on both sides of the border.  For that reason the House of Commons Trade Committee held an emergency meeting in Ottawa after the Commons had recessed for the summer to help develop a Canadian response. With no immediate solution in place, New Democrats want the committee to focus the government on helping those who will suffer when production drops. 

It is clear the government must quickly develop a concrete plan to protect the jobs of hundreds of thousands of Canadians who will be caught up in a trade war that makes no economic sense.  In the short term that means ensuring EI benefits quickly flow to those facing layoffs so workers are in place when production returns to normal. 

In our part of Canada people need look no further than Sault Ste. Marie to see what is at stake.  American tariffs levelled against Canadian steel and aluminum producers will cut deeply into the communities and the government will have no choice but to help.

While Canada is planning its own round of dollar-for-dollar tariffs, that won’t just punish America.  Goods that flow across the border prop up jobs in Canada too. Tariffs on imports, like American made pleasure boats, are going to cut into sales and hurt people who make their living of them in Canada.  And the sting is being felt in America as well. 

Steel tariffs have led to layoffs at the Mid-Continent Nail plant in Missouri and the company said it will have to shut down by September which is bad news for its 500 employees.  The problem isn’t limited to America’s trade with Canada.  European counter-tariffs on motorcycles also forced Harley-Davidson to move some its production overseas for motorcycles that will be sold in Europe.

What’s frustrating is that it’s hard to fix what wasn’t much of a problem in the first place.  The flow of trade between Canada and the US was largely balanced, but President Trump isn’t looking at the big picture.  He wants to focus on trade sector by sector and win every one of them which is unreasonable and dangerous.

Apart from the indiscriminate loss of jobs, trade wars have significant security implications.  That’s because trade is one of the best tools to facilitate global peace.  Inter-dependencies in supply chains make security a shared concern.  Economic cooperation leads to agreements on many other fronts based on trust.  That alone is a more than compelling reason to deal with trade problems at the negotiating table, but the President doesn’t appreciate that or seem to recognize the harm he is inflicting globally or even in the places like Missouri that supported him during the election.

In Canada the government has to act swiftly and do all it can to support workers who will feel the pain the most.   In addition to that, we must find a way to convince America that the best place to deal with their concerns is at a negotiating table where reasoned responses can help protect jobs.