US chief trade negotiator, Robert_E._Lighthizer was a long time lobbyist for the steel companies and so not surprising he convinced Trump to go after steel imports. As a Canadian, I am incredulous that Canadian steel exports to the US were hit with a 25% tariff---on the grounds that Canada is a national security threat! It happens that Canadian steel exports to the US equal US steel exports to Canada. Where is the sanity in that decision to hit Canada?

Peter Navarro, Trump's chief advisor on trade, has gone on record as saying that countries will not retaliate against the US because they need the US market. Arrogance and a total misreading of the degree to which other countries will go to lengths to protect their industries.

Two point of clarification. First,The US domestically saves too little to fund the Federal deficit. Thus the deficit can only be fully financed with dollars that are held in reserve by US trade partners who run trade surpluses with US, such as China, Japan, EU and many emerging markets. Second, The Fed takes cash out of the markets when the bonds it currently hold mature. Thus there is a demand for USD to fund deficits but at the same the supply shrinks. A stronger dollar only makes matters worse since encourages more imports and hence a higher trade deficit.( ironically, should the USD increase by, say 20%, it would negative most of the tariffs recently imposed ). It is the twin deficits--- trade and govt budget deficits--- that puts the US in a bind, a bind that will get only worse under a protectionist. If you want to see how this plays out, read the history of the Plaza Accord of the mid-1980s, and substitute China for Japan.

Gary, there is the whole other side of the international trade issue with China and the US. The international capital account is starting to draw attention. China can devalue the yuan to offset the US tariffs, although that might lead to an outflow of capital from China. But it is a very effective weapon.Or, China can sell US Treasuries, drive up yields and mess with the US financial markets. This is less likely scenario, but one that should not be discounted.

If I may have the final word. All Canadian political parties are firmly behind the Prime Minister and his response to US #tariffs. It is rare that all parties agree in such a unified manner. Given the size of the US -Canada trade, the US will suffer just as Canada will suffer by putting up trade barriers. If only that concept could be understood by the Trump Administration, everyone would be better off. Lets hope saner heads prevail

For whose benefit should Canada do this? Canadian companies who process dairy products have publicly stated that they have no interest in the US dairy products because the quality is not as good. Canadian diary producers are not pushing for greater access to the US.

On lumber the issue it is all about stumpage fees and every international tribunal has found that Canada has not violated any international trade rules regarding how it applies stumpage fees ( a form of royalty on land use). The irony for Americans is that US lumber producers can sell all they produce which is not enough to satisfy the US housing demand, so they are forced to import lumber from Canada under a high US tariff. Canadian lumber companies are doing a roaring business selling to the US, despite the tariff and US customers are over-paying for their homes. How smart is that?

Truthfully, I avoid any travel to the US. One of the big issues is the behaviour of US border guards at Niagara/Buffalo. One time the US custom officer saw that my passport showed that I travelled to Israel ( which I do often) and asked why I do so. Do I need to explain that to a US official in Buffalo?

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.

Canada has a very small shadow bank---only about 10% of the mortgage market. The big six banks own 75% of all mortgages ( the balance is held by regulated credit unions, second tier banks).

Gary

You are most welcome to move to Canada. We are polite, do not want to turn the world upside and just go about a daily work. Also, the healthcare is universal and free.

Your assessment about farming and jobs is so right. When will the light go on with some of Trump supporters?

Norm

Apologize accepted. I know you personally would never have approved of this behaviour!

I just do not see any way forward on the trade issue with Canada. Truthfully, the Canadian officials I know are really top notch and know exactly how trade flows between the two countries and just how to push back,, knowing that the American farmer will be on the same side. The whole mess is surreal.