Will Canadian Boycott Start With Kentucky Whiskey?
It is interesting to look at the products that Canada may decide to boycott if the trade war with Canada heats up. This boycott may be the only thing that shows Donald Trump that he is not winning. This boycott could end up saving America and Canada a lot of pain in the future but boycotts hurt.
While we hope things don't get so bad in Canada with trade tariffs that boycotts are needed, certainly they are a tool that could bring restraint to governments that are perceived to be out of control.
We know Donald Trump thinks that a pending trade war is just about leaders. That shows a misplaced arrogance. Boycotts can work and are a patriotic action. But they should be a last resort action if leaders fail to act.
Shot of Whiskey Author Guinnog
Boycotting Whiskey
Boycotting whiskey could be the most effective of all boycotts. Whiskey was popular, died, and now is popular again. I have adult children who have enjoyed the Kentucky Bourbon Trail. Whiskey sales are soaring around the world. A boycott would be fairly easy to accomplish. Not only Canada, but the whole world could engage in it. The bottles are labeled. It is not difficult to determine the origin.
Since the Senate majority leader, Mitch McConnell, has buried his head in the sand regarding warnings of worldwide tariffs coming to Kentucky bourbon whiskey, a boycott may be the only way to get him to move. The state of Kentucky could be financially decimated if Canadians bought their own whiskey and if it spread to other nations. Whiskey is not the most expensive product to boycott, but would affect the most powerful senator!
Thirteen distilleries owned by 8 companies produce 99 percent of the whiskey produced in the United States. Ten of those distilleries are located in Kentucky. Kentucky produces 95 percent of the bourbon whiskey, which is corn based, in the world. There are other whiskeys produced in Kentucky and in other states, and these include rye whiskey, scotch whiskey, etc. These are all potential subjects of a boycott.
While no one wishes that financial disaster to befall Kentucky, a beautiful state and home of the Kentucky Derby, perhaps the threat of same would get Mitch to force his Senate membership to act.
Because of McConnell bourbon is being singled out for a boycott on the internet. Some Canadians, from comments I have viewed on the subject, are making plans to change their buying habits.
The silence of Republicans to the Trump tariff ramp-up has been disturbing and disturbingly weak. McConnell, so far, has only wanted to attach an amendment to the legislation, but news organizations in Kentucky like the Courier-Journal have called for him to introduce a stand-alone bill to stop the tariff process.
The Courier-Journal makes this impassioned plea to the Republican leader:
What does the adversarial tit-for-tat likely mean for Kentucky, which produces about 95 percent of the world’s bourbon? Jobs could be lost; manufacturers may see slowdowns; and there could be a crippling effect on the booming bourbon-related tourism industry.
So far, the Senate Majority Leader is timidly pushing back against the White House and Trump’s plan to slap tariffs on American allies.
Trump and Navarro Are Not Facing Reality
Trump and his trade adviser, Peter Navarro are not facing reality and they are dangerous men. They are not only dangerous men, but one could make the case that they are deluded men as well. They need to be weakened, politically, for the protection of the American consumer according to free traders everywhere. Sure, they have gained support from some far left union leaders. It is not the party, but the ideas, that make Trump and Navarro so dangerous.
I wrote a comment to Canadian professor and TalkMarkets contributor, Norman Mogil regarding both men:
During his interview with Chris Wallace, Navarro said he was going to upset the global order. He said:"And my job at the White House is to help the president get jobs, good jobs, manufacturing jobs to the working men and women of America, and we can't do that unless we upset this existing world order, which basically is tremendously biased." (Emphasis added by me)
He previously said no country would retaliate for the trade sanctions on steel and aluminum. He thought it would be a win for Trudeau that Trump even go to Canada. What is that guy smoking? He is a very dangerous man. Very dangerous.
Then Trump says, "we have a world to run". How about he run his nation and leave others to put their nations first as well. These guys in the white house are radicals. They want to upset the existing world order. That will devastate farming in America, and will devastate the job prospects for millions of people. And it will raise prices and manifest the inefficiency of protectionism, Prof.
Upsetting the existing world order, wanting to see Trudeau burn in hell, and the rude way of treating the Canadian hosts shows a lack of understanding of Canadians by the American leaders.
As Professor Mogil, a contributor to Talkmarkets, has said, Canadians are polite. Now we see that this politeness cannot be mistaken for weakness. Trump and his minions have done exactly that. They were "stabbed in the back" by kindness. Trump's policy, by reading Navarro's comments, proves that he expected the trading partners to fold. That was a major assumption embedded in his plan.
How will he save face? He will get even if he can.
And don't think that the idea of a boycott of bourbon has not been entertained. There is already extensive discussions on replacement Canadian whiskey for those who choose to begin the boycott. One large discussion is seen on Reddit, which has promoted bourbon as well.
Mitch McConnell had better act fast to head off this debacle which is likely now beginning in his state. The exchange-traded fund, WSKY, made up of mostly American companies, looks like a sell at the moment but may become a buying opportunity once trade wars settle down.
Larry Kudlow has been reported to have had a heart attack. He is also an economic adviser to Donald Trump. It seems like a free trade guy like Larry has no place in the Trump Administration. Most fans of business news hope for his speedy recovery.
Disclaimer: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment advice. The ...
more
Update: US whiskey exports worldwide are crumbling. Europe, which accounts for 60 percent of US exports, fell 13 percent in the second half of 2018 after rising 33 percent in the first half of the year. Tariffs are biting and Trump is failing.
Just FYI, the governor of Kentucky is still crowing about Canada's tariff on bourbon. Time for the Canadians to keep the pressure on a state that has two racist senators and that does not reflect the values of Canadians or most Americans.
Thanks for sharing sir.
As we should all know, erecting trade barriers among close trading partners has an adverse effect on the economy. Sadly, many of these effects occur long term. This means the one implementing them may only have to deal with the #inflation caused by their actions and not the disfigurement of their economy and the gradual shift of trade away from the country implementing one sided trade barriers which are usually illogical because they usually do more harm than good and cause massive unforeseen results because they let he opposing side do one sided actions as well.
There should be a basic economic test the Republican party requires before a candidate is elected because #Trump's position on this is more liberal than even Clinton's which is depressingly sad coming from a person who's suppose to be a businessman.
So true, Moon, but I can't see it as being liberal. It is radical, far left. And now it has been adopted by the far right, and Trump is farther right than anyone could have forseen. Being a radical nationalist (as opposed to a moderate national) is a far right position but it does correspond to a far left union radicalism. Most everyone, I thought, was in the middle, be they liberal or conservative, and were for free trade as a general rule. The problem with the USA is that real estate is inflated, and wages are inflated, and pretty much everything is inflated as regarding competitive international trade. So it is hard for the US to compete in making everything. Trump seems not to understand this, and will create real inefficiencies going forward. And he would like to see real estate continue to go up. He wants everything to go up except maybe the dollar and oil. Jesse Colombo says everything is a bubble, and regarding international trade he could be right!
Scary thoughts.
Yes, it's a mistake to target our close allies and friends.
@[Norman Mogil](user:26709), @[Gary Anderson](user:4798), what are the pros and cons of US tariffs against Canada?
Speaking for myself, Canada and the US are pretty balanced regarding trade. Why make a trade war under those circumstances? I would like for a peaceful atmosphere to continue between the US and Canada. We need Canadian lumber and house prices inflate due to a scarcity of wood product.
I agree Gary. I understand #Trump's concerns about China, but Canada? Why make an enemy with such a close ally and trusted partner?
Take agriculture which has highly integrated supply chains, not unlike those in the auto sector. The two countries are so connected within the agriculture sector that a tariff war would devastate farms on both sides of the border. Canada buys more US agricultural products than China and the US is Canada's biggest agricultural market. The dairy industry that is singled out by Trump as the worst offender is less than 2% of all US agricultural trade. Is this all about votes in Wisconsin that Trump and his advisors are prepared to over turn 50 years of good trade relations?
The issue of Canadian supply management involves domestic quotas on eggs, poultry and dairy products. Canadians pay more for their own products than they would otherwise be the case without supply management. But we are satisfied with that, otherwise we would have done away with this form of subsidy years ago. The Canadian supply management does not contravene the WTO rules, so we are playing by the rules.
This is no different than the US Congress voting billions to subsidy agriculture in the US. We do not complain about that, yet Trump complains about Canadian supply management.
There are no 'pros' when it comes to putting up tariffs --- consumers are the big losers.