Trump’s trade threats should worry us
How worried should we be about Donald Trump’s latest threats directed at Canada’s dairy sector and also around new hire and buy American measures?
The simple answer is: We can’t afford not to be concerned. But a few things should be kept in mind. Trump’s track record in terms of consistency is not good. Just as he went from threatening during the election campaign to placating when first elected, he has now turned back into the hyperaggressive, simplistic solution president. He may well change again. And his bombast doesn’t necessarily translate into over- the- top action, especially considering Congress is there as a check and balance.
All that said, what Trump is radiating in terms of tone if not detail should worry us. He made the anti- Canadian comments in the heart of U. S. dairy country, where there is a widely- held view Canadian trade tactics unfairly protect the domestic dairy industry from U. S. competition. Is there protectionism involved? Canadian dairy farmers and processors struck a pricing deal in 2016 that critics say prices domestic cheese ingredients below cost, undercutting imports.
Is it justifiable? If a negotiated agreement doesn’t happen first, this could end up in front of the World Trade Organization, and it won’t be just the U. S. pushing for that. Dairy industries in Australia, New Zealand and Mexico support Trump’s perspective. It’s not something Canadians would be happy to admit, but they may have a point.
However, that’s not the same as saying Canadian practices are responsible for the state of the U. S. dairy industry. That Trump allegation falls short according to Trump’s own Department of Agriculture, which says poor results in the U. S. sector are due to U. S. and global overproduction, not Canadian trade barriers or protectionism.
Perhaps the most significant thing to take away from Trump’s tirade is this: We are now getting closer to the time when important trade matters – NAFTA, the softwood lumber dispute, U. S. protectionism around steel, buy and hire American – are going under the microscope. Anyone who thought that would be an easy ride was probably naive to begin with, but certainly given Trump’s rediscovered isolationist rhetoric, it’s going to be anything but easy.
Fair enough. They’re called trade negotiations for a reason. And they’re not supposed to be easy. It’s not wrong for American negotiators and their leader to want the best possible deal for their country, any more than it’s wrong for us to want the same thing. One thing that would be wrong is for us to expect all sacred cows – the dairy industry being just one – to walk away from this unchanged. Like it or not, everything will be on the table. And when that happens, the only thing guaranteed is change.