The bravado of President Trump.

Every time we have needed a warming thought in these blah days of winter, we have pictured President Trump running into a school to rescue children from a mentally ill person with a gun. It is similar to the bravado of a 12-year old suggesting that teachers be armed: ludicrous. There are times when that man would do himself good to shut up.

But Canada’s main concern should be the current North American Free Trade Agreement (NAFTA) negotiations in Mexico City. All reports are that this session will go nowhere and the recommendation is likely to be that the discussions recess until 2019. This will enable the Mexicans to get their presidential elections out of the way and the Americans their mid-term elections for congress.

The wild card in this game is President Trump. If he reacts to the delays, as any 12-year old would, he will give six months notice of the cancellation of NAFTA. He will think that will scare hell out of the Mexicans and bring those uppity Canadians back to the table.

But the problem is that his advisers tell him that he would lose American jobs as well as Canadian and Mexican jobs. So instead, he has been attacking specific industries. Trump has actually been complaining lately that those Canadians are a bunch of con artists who have been taking gullible Americans to the cleaners for years. This is why he continues attacking Canada on an industry by industry basis: first softwood lumber and dairy and now steel and aluminum. His attacks are not only driving up costs for Americans but are jeopardizing relations between the two countries.

What Trump does not seem to understand is that Canada has been America’s best customer for many years. His problem is that Canadians will have to rely on Americans to keep the NAFTA discussions going in that country. Canadian business has to launch major sales efforts in Europe, Asia and South America to see how much American trade we can replace. We will still have trade with the United States but new tariff barriers on both sides can be expected.

The Canadian government will also be forced to impose tariffs to try to balance increased deficits in trade with the U.S. That is a no-win game but necessary. It was what we tried to get rid of with NAFTA.

The good news is that in the long run, a new American president would bring the U.S. to its senses and a better NAFTA can be written. The only difference will be that Canada will never again want its trade so tightly linked and dominated by the United States.

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Copyright 2018 © Peter Lowry

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