President Trump has played the Canadian leadership like a fiddle. By focusing on the 300% dairy tariffs, financially irrelevant to the US economy but a Canadian sacred cow (pun intended, thank you), and by means of an unethical media who would almost certainly leak his “off the record” comments, POTUS has backed the Canadian PM into a political corner. The reason is that President Trump wants Canada to reject the NAFTA modifications. Otherwise, he wouldn’t have political support in the U.S. to do what he intends to do to Canada.
The strategic goal is the recovery of U.S. auto manufacturing, a $100b industry, that has been lost to Canada under NAFTA. President Trump wants to recover that industrial base by placing a 25% tariff on Canadian autos. This will encourage manufacturers to shift production back to the U.S. and the bulk of future manufacturing investments will ignore Canada in favor of direct access to the massive U.S. market. Along with all of the ancillary manufacturing and supply firms, this will foster an economic renaissance in the U.S. “rust belt” and deliver a devastating blow to Canada’s economy over the next decade.
Canadian PM Trudeau and Foreign Minister Freeland thought they had the upper hand to block President Trump by allying with their counterparts in Europe and Mexico. So they boldly played anti-Trump politics to strengthen their domestic TDS base…but Trudeau and Freeland were not intelligent enough to realize they were actually giving Trump an excuse to hit them with an aggressive auto tariff. Trudeau never had a chance against Trump. Now that both the EU and Mexico have abandoned Canada and cut deals directly with the U.S., serious analysts in Canada have woken up to the massive losses the Canadian economy faces by Trudeau’s decision to reject a fair deal with the U.S. when they had the chance.
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