Bank Of Montreal Economist Destroys Trump’s Argument That Canada Is A Trade Villain – June 6, 2018

If you’re interested you can read the article in full by going here: https://www.huffingtonpost.ca/2018/06/04/trump-tariffs-bank-of-montreal-rant_a_23450339/

It’s interesting, when I read and listens to all sides of the argument, personally, I have my own opinions regarding Donald Trump’s tariffs. My opinions stem from NAFTA (North American Free Trade Agreement) and the rules contained in it. So let’s imagine two countries Canada and America with similar laws, but some fundamentally different laws. So Let’s say you’re America and your market is more open to free trade and then your Canada and your country is less open to free trade citing environmental concerns as one of your root causes for instituting restrictions on free trade.

So America, Canada, and Mexico signn a NAFTA agreement, after this deal is made Canada decides that it want’s to be more envioronmentally safe than America is, so Canada creates a puts a tariff on the importing of a certain product, also Canada stays true the NAFTA trading agreement and only allows materials with certain Mexican and U.S Nafta certitifications to get into Canada tariff free, where as in America because the NAFTA deal has been signed the assumption by American customs is that whatever materials coming from Canada have already made it through the proper safety checks therefore they’re safe under NAFTA.

How do you solve this problem? How do you negotiate? Well, if you’re a business-minded president like Donald Trump you deal with the country on an individual basis, you get rid of NAFTA so each country can charge tariffs how they see fit and you can retaliate the way you see fit. In the EU, bureaucrats constantly change their importation laws while America’s remain relatively the same, the end result is that it makes it harder for American companies to find consistency, which causes their costs to go up.

This is why I’ve said that Canada has been in violation of NAFTA for so long that we feel entitled to violate it. In the EU as an example, once their regulatory bodies make a deal it’s finalized and regardless of any of the prior deals or contracts signed. What this ultimately does is it makes doing business with them more difficult which in turn puts the country that staying to true to the original agreement at an economic disadvantage.

Now, in my position what I will say is because the world, for the most part, has become rather socialist, I’m not entirely sure how this all will play out. I can’t choose sides, I don’t know what will happen, quite frankly on a personal level I’ve done whatever necessary to keep myself economically flexible, because even though I have my own ideology, over the years I’ve come to accept the reality. When I listen to most Canadians they don’t understand what’s going on and they side with Doug Porter.

I think Doug Porter has a point, he has some valid points, by my response to his points are maybe Trump is right, maybe we should just scrap NAFTA. If Canada is getting the short end of the stick, why would Canada want to keep NAFTA? Or are Canada’s upset about the name calling? which is called “puffing” in the legal world. Unless something is true you don’t let it bother you, then again this is something business people are more familiar with than employees.

In a business man’s world when you shake on something or sign an agreement, you don’t make changes to the agreement without first notifying your partner. There are 2 sides to this, but I can say with absolute certainty that I’m not sure how this will end.

Interesting times ahead