President Trump lashed out at Canadian Prime Minister Justin Trudeau and the country’s trade relationship with the U.S. Sunday accusing Canada of “charging massive Tariffs” to U.S. businesses. In a tweet sent Sunday while en route to Singapore, Trump pointed specifically to Canada’s 270% tariff on dairy the origin of his frustrations with Canada.
Trump’s stinging critique — while technically accurate — obscures the larger trade relationship between the two countries. Canada does indeed impose a 270% tariff on dairy that has kept many U.S. dairy products from making their way from the U.S. to Canada. And many other countries rely on similar measures to protect select domestic industries.
But trade policy experts say Canada’s trade relationship with the U.S. is key to our domestic economy. Canada is the top U.S. export market, with the country buying more than $340 billion in American goods and services in 2017, according to data from the U.S. Trade Representative. And, overall, the U.S. has an $8.4 billion surplus with Canada. The U.S. has a significant deficit if only goods are included due to the service-sector-centered nature of the U.S. economy.
Protective measures like Canada’s dairy tariff are common around the world. The U.S. uses tariffs to protect a variety of industries from a 350% tariff on tobacco to more 160% on shelled peanuts. In other cases, such as sugar, the U.S. has crafted a complex program to protect domestic industry by limiting imports.
Trump should realize that the whole North East of the US gets most of its electricity from Canada. A flip of the switch and the Trump Tower would be dark! Now that is a National Security risk!