A recent analysis piece in TheWashington Post reveals that Canada is probably America's best trading partner.
Canada could even be called the United States’ best major trade partner. It’s the largest export market for U.S. goods, and the $4 trillion trade is by far the most balanced. The United States exports 94 cents’ worth of goods to Canada for each dollar of imports. In trade with the rest of the world, it’s only 62 cents.
The pattern within U.S.-Canada trade in part reflects differences between the two countries. Although both have about the same area of land, Canada has only one-ninth the U.S. population, less than California’s. So while rich in natural resources to export as raw material exports, Canada doesn’t necessarily make the vast array of consumer goods, or the specialized machinery and equipment used to make many finished products, and those are more often imported.
...it’s the U.S. workers making machines, not consumer goods, who could suffer the most in the blowback from an auto tariff. The United States last year exported to Canada $79 billion worth of production equipment, including machines for farming, mining and manufacturing, as well as computer and telecom equipment. The trade surplus: $36 billion.
Consider the forklift and other material-moving equipment that is central to modern just-in-time delivery. That category alone last year generated a $1.6 billion trade surplus with Canada. “It’s a very important market for us,” said Brian Freehan, president of the Industrial Truck Association, which represents forklift manufacturers and their suppliers. He said that without the North American Free Trade Agreement, U.S. manufacturers would lose business, probably permanently, to countries outside North America.
That could affect workers across the country. Forklifts are sold in Canada, for example, with wheels from Wisconsin, forks from Ohio, a frame from Kentucky, transmission from Indiana, oil pump from Illinois, seats from Michigan, lift cylinders from North Carolina, a counterweight from Texas and a tilt cylinder from West Virginia.
...A study from leading Canadian think tank C.D. Howe Institute found that under a 25 percent auto tariff, Canada could lose 60,000 jobs, a blow that could cause a regional recession centered in Ontario. But the study also found that the United States would lose twice as many jobs, more than 120,000. Although U.S. jobs directly related to autos would get a boost, those gains would be more than offset by job losses in sectors such as machinery, electronic and transport equipment, and other manufacturing. In other studies potential job losses in both the U.S. and Canada have ranged higher.
For Trump to impose the 25 percent auto tariff, the U.S. Commerce Department must find that auto and parts imports threaten national security. It’s widely viewed as a negotiating tactic, a U.S. threat to Canada to get NAFTA concessions by the end of September. Auto and parts manufacturers and a wide variety of other interests told the Commerce Department that they opposed the tariff.
“A car put together with American-made parts is not a national security threat,” Toyota spokesman Ed Lewis said.What the article overlooks is that trade between Canada and the United States is not merely in goods but also in services and it is America's surplus on the services side that tips the overall balance in America's favour.
If Mad King Donald remains intractable and menacing, Ottawa might consider firing a shot across Washington's bow. Our armed forces need a replacement for the vintage and rapidly time expiring CF-18 fighters purchased by the previous Trudeau government. The American options are Lockheed or Boeing aircraft. Lockheed's offering is overpriced and underwhelming. Even the Pentagon now admits that stealth is more gimmick than war winning breakthrough. Boeing is offering an updated version of the F-18 but that same company almost maliciously went out of its way to screw Bombardier's C-series regional jet. What's good for Boeing's goose is good for the Canadian gander. What an auspicious moment for Canada to take a serious look at SAAB's latest iteration of its state of the art, affordable Gripen. Great way to get Washington's attention.