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What export tariffs should Canada impose on the US?


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2 hours ago, -1=e^ipi said:

 

Trade should be reciprocal. Realistically, the US will not give up their subsidies for Canada because then they indirectly given concessions to the Europeans. Also, it is unlikely that we would get a world with 0 agricultural subsidies even if we were to get 100% economically literate politicians because there are national security reasons to subsidize agriculture (the supply management does the opposite and harms national security by reducing the quantity of food produced). So one possible reciprocal solution is that Canada simply imposes reciprocal dairy subsidies.

 

One thing that I think is important to understand about trade issues internationally, is that often countries act completely against their interests, especially when it comes to subsidies. This is because of a combination of general economic illiteracy of politicians and because producers tend to have disproportionate political influence (be it the dairy farmers in Canada or the softwood lumber producers in the US). If a country subsidizes an industry then effectively the tax payers of the subsidizing country are subsidizing the consumption of consumers in another country. If you calculate the net impact on the economic welfare of a country due to the subsidy, the subsidizing country's overall welfare is always lower, while the other country may sometimes have a slightly higher welfare. Yet because producers tend to have disproportionate influence, many politicians and countries pretend that subsidies help the subsidizing country.

You would have had more credibility if you just answered my question,

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13 hours ago, paxrom said:

You can all thank trump for trying to fix it now. 

How is it smart economic policy for the US taxpayer to subsidize another country's food consumption when that taxpayer himself might be struggling to make ends meet?

 

You've never studied economics, have you?

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48 minutes ago, Machjo said:

How is it smart economic policy for the US taxpayer to subsidize another country's food consumption when that taxpayer himself might be struggling to make ends meet?

 

You've never studied economics, have you?

Its not smart, trump is proposing free trade across the G7 countries. Seriously think about if we all take down our barriers then our countries will prosper 

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15 hours ago, -1=e^ipi said:

This is because of a combination of general economic illiteracy of politicians and because producers tend to have disproportionate political influence

The question is can a government win re-election if it eliminates supports for producers? 

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54 minutes ago, Queenmandy85 said:

The question is can a government win re-election if it eliminates supports for producers? 

Valid point, its because politician have a short term incentive to do protectionist agenda. But they're hurting themselves and the rest of the world in the long term. Look at america. We have the lowest trade barrier out of all the countries and we have the best economy because of it. Obviously there are vital strategic industries you do need to keep but dairy is definitely not one of them.

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Canada's tariff and non-tariff barriers for dairy have been challenged many times by many nations (New Zealand, Brazil, EU, etc.) long before Trump became U.S. president.  

The difference this time around is that Trump is willing to put leverage behind the challenge, and cares far less about political cost.    This is a game of chicken and Trudeau is at a disadvantage politically and economically.

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2 hours ago, Queenmandy85 said:

The question is can a government win re-election if it eliminates supports for producers? 

Absolutely. We saw that in Australia and New Zealand.

 

The bigger question is in Canada can we get 1 major party to elect a leader that supports getting rid of this awful system so that we can vote to end this system in the first place. Special interest groups tend to have bigger influence in leadership conventions, when there are far less people voting, than in general elections.

 

But due to the loss of Martha Hall Findlay and Maxime Bernier the answer so far is no.

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3 hours ago, bush_cheney2004 said:

Canada's tariff and non-tariff barriers for dairy have been challenged many times by many nations (New Zealand, Brazil, EU, etc.) long before Trump became U.S. president.  

The difference this time around is that Trump is willing to put leverage behind the challenge, and cares far less about political cost.    This is a game of chicken and Trudeau is at a disadvantage politically and economically.

Of course Canada is at a disadvantage. Look at the differences in population,  you decided to play the bully, you will suffer the fate of the bully.

Edited by Jimwd
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1 minute ago, Jimwd said:

Of course Canada is at a disadvantage. Look at the differences in population, 

 

And Canada seeks to take advantage of the difference in population (market size), offering less in return. 

85% of Canada's automotive production is exported to the USA.   The U.S. doesn't export 85% of anything to Canada.

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11 minutes ago, bush_cheney2004 said:

 

And Canada seeks to take advantage of the difference in population (market size), offering less in return. 

85% of Canada's automotive production is exported to the USA.   The U.S. doesn't export 85% of anything to Canada.

Again promote the Marxist philosophy of the state over the individual. I get it.

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On 6/28/2018 at 11:33 PM, -1=e^ipi said:

Yes, because it would be so terrible for poor people to have cheaper food prices! *Sarcasm*

I have no dog in the supply management fight other than to say that the US has no business lecturing us about it when they massively subsidize their own agricultural sector. The system has flaws but it's our issue to discuss, and when it is discussed what I generally see are two parallel tracks where everything from the facts up is disputed. 

Edited by SpankyMcFarland
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1 hour ago, SpankyMcFarland said:

I have no dog in the supply management fight

 

Yes, you are completely indifferent to the plight of poor people. Also, you seem to be indifferent to having a giant trade war in order to protect a system that makes poor people suffer.

 

But Donald Trump disagrees with dairy tariffs, therefore, by Canadian nationalism logic we must be pro giant tariffs and pro supply management system that makes food unnecessarily expensive for poor people.

 

How disgusting nationalism is.

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2 hours ago, SpankyMcFarland said:

I have no dog in the supply management fight other than to say that the US has no business lecturing us about it when they massively subsidize their own agricultural sector. The system has flaws but it's our issue to discuss, and when it is discussed what I generally see are two parallel tracks where everything from the facts up is disputed. 

Once again, trump is trying to fix all that with zero tariff, subsidies and barriers. Complete free trade when it comes to non national security interest. 

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3 hours ago, paxrom said:

Once again, trump is trying to fix all that with zero tariff, subsidies and barriers. Complete free trade when it comes to non national security interest. 

 

President Trump will not be able to achieve zero tariffs...tariffs of 2.5% are built into the WTO and so called "rules based order" post WW2 just for openers.   Tariffs and non-tariff barriers were/are part of the game.   But he may be able to use tariffs to reduce other tariffs and reduce the massive U.S. trade deficit with other nations.  In theory, free trade zones should not have tariffs, but Canada and the U.S. still use them to protect domestic interests.

 

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I have to question Trump's negotiating skills. TTP negotiators easily got concessions from Canada just through friendly negotiation whereas Trump can't get concessions from us even in a full on trade war. On the contrary, he's just forced Canada to dig in its heals and even talk about accelerating the removal of trade barriers to other countries.

I've never read the Art of the Deal, but his behaviour reveals that he has zero negotiating skills. He reveals a total lack of basic human psychology. My intellectual being favours Canada just unilaterally dropping all trade barriers under normal circumstances while my emotional being tells me strike back at the US even if it hurts us more just to not let Trump win. If Trump can get even a person like me (who'd be his best ally given my desire to drop trade barriers) to react so emotionally as to have a part of me want a full on trade war just to save Canada's dignity even while my intellectual side knows that it's not a wise move, then how do you think most Canadians are reacting to Trump's belligerance? Heck, the latest polls are showing that 80% of Canadians want to fight back. And you know what, I bet that at least some of them would normally favour free trade under friendlier circumstances.

 

Where in the world did Trump learn his negotiating skills? In kindergarten?

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4 hours ago, -1=e^ipi said:

 

Yes, you are completely indifferent to the plight of poor people. Also, you seem to be indifferent to having a giant trade war in order to protect a system that makes poor people suffer.

 

But Donald Trump disagrees with dairy tariffs, therefore, by Canadian nationalism logic we must be pro giant tariffs and pro supply management system that makes food unnecessarily expensive for poor people.

 

How disgusting nationalism is.

I oppose supply management and subsidies, but Trump is doing nothing to soften Canada's stance on this. Consider for moment that Canada had made dairy concessions in the TPP yet wil soon be raising tariffs against the USA. Clearly the problem is not that Canadian officials aren't willing to reduce dairy tariffs. The real problem is that Trump doesn't know how to give people face. When you make a person lose face, you force him emotionally to go on the defensive. It's human nature. So much for Art of the Deal if Trump doesn't even understand that. No wonder he'd gone bankrupt a few times.

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10 minutes ago, Machjo said:

My intellectual being favours Canada just unilaterally dropping all trade barriers under normal circumstances while my emotional being tells me strike back at the US even if it hurts us more just to not let Trump win. If Trump can get even a person like me (who'd be his best ally given my desire to drop trade barriers) to react so emotionally as to have a part of me want a full on trade war just to save Canada's dignity even while my intellectual side knows that it's not a wise move,

 

Well, clearly this approach is not any smarter than Trump's, and may be worse.

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1 minute ago, bush_cheney2004 said:

 

Well, clearly this approach is not any smarter than Trump's, and may be worse.

I agree. That's why I made a distinction between my intellectual and emotional beings. In my case, I can curse Trump and still recognize that the best course of action would be to ignore his childish tantrums and cool-headedly unilaterally drop all trade barriers in spite of his bullying tactics.

But if you understand even the most basic of human nature, then you also understand that most Canadian voters won't be able to make that distinction and will let their emotions get the best of them. And in a democracy, politicians will have no choice but to follow their voters' wishes to Canada's harm. Luckily for Canada, we're a constitutional monarchy with an unlected head of state which could help to mitigate at least some of the dangers of an angry electorate, but the Canadian monarchy is still very circumscribed and so the electorate will still be able to force our politicians to hurt our country. The more Trump pushes, the more Canada will push back even if it hurts us ten times more than it hurts the US. It's a matter of national pride.

Look at 9/11 for example. In some respects, Osama Bin Laden was a terrible genius. He knew that by destroying the twin towers, he could thrust the US into a decade-long conflict that would sap the US treasury and leave a few Middle-Eastern states in ruins. No one benefited from it (heck, even anti-Saddam activists now lament that he's now gone!).

 

Of course a calmer mind might have refused to jump into a bunch of wars without any exit strategy, but once you fire up the population, the politicians, even the calmest ones among them, will be forced to lead the country to its own harm. In one sense, Trump is Canada's 9/11 and sure enough, Canadian voters will force our politicians into a trade war to our own detriment.

 

I disagree with it, but my understanding of basic human psychology tells me that unless I have the power to convince enough Canadian voters to not go through with this, then the next best bet is to try to guide the war in a direction that will hurt us less than otherwise.

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11 minutes ago, Machjo said:

...Of course a calmer mind might have refused to jump into a bunch of wars without any exit strategy, but once you fire up the population, the politicians, even the calmest ones among them, will be forced to lead the country to its own harm. In one sense, Trump is Canada's 9/11 and sure enough, Canadian voters will force our politicians into a trade war to our own detriment.

 

Canadians wishing to "fight the bully" now at any cost have seemingly ignored the ground battles and losses since the FTA/NAFTA.   American corps and investment capital have dominated Canada since then, as has increasing reliance on the U.S. export market. Repressed patriotism should have been exercised back then to preclude the current situation.    On softwood lumber, Canadians begrudingly accepted a settlement several times to save the industry.

Did Canadians stop paying attention to the trade "file" until Trump came along to wake them up ?

Edited by bush_cheney2004
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14 minutes ago, bush_cheney2004 said:

 

Canadians wishing to "fight the bully" now at any cost have seemingly ignored the ground battles and losses since the FTA/NAFTA.   American corps and investment capital have dominated Canada since then, as has increasing reliance on the U.S. export market. Repressed patriotism should have been exercised back then to preclude the current situation.    On softwood lumber, Canadians begrudingly accepted a settlement several times to save the industry.

Did Canadians stop paying attention to the trade "file" until Trump came along to wake them up ?

Well, maybe it's a good thing. If we cannot trust the US, then it might be best for Canada to in fact gradually distance itself from the US over time. In that sense, Trump's tariffs might be a blessing in disguise as they would force Canada to pursue far more aggressive trade deals with other countries, tear up NAFTA, and just welcome the US tariffs as permanent or at least for as long as Trump is in power and even then keep the borders open to other states.

Another thing Canada might need to do is grow its population quickly to produce a larger domestic market. There could exist a few ways of doing this including making it easier for foreign nationals to work in Canada for example. Maybe for the next ten years, Canada should form a trade-war economy. It will probably expand our debt and make Canadians poorer at least in the short to medium term, but from a national security standpoint would also make us less prone to the kind of attacks Trump has launched against us.

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