Canada Why Trump's threats could give Canada a trade advantage it never sought: Don Pittis

15:26  13 june  2018
15:26  13 june  2018 Source:   cbc.ca

A trade war is a political act of economic destruction: Don Pittis

  A trade war is a political act of economic destruction: Don Pittis As U.S. President Donald Trump knows, many voters cheer when their government threatens trade war. But as with real wars, the consequences can be perilous. Whether in a real war or in a trade war, waving the flag is politically popular in a way that is hard to understand to those who live through the ultimate consequences.

In Canada , moves by the Liberal government to counter U.S. President Donald Trump ’ s tariff threats were met with surprisingly broad approval. “The United States has been taken advantage of for many decades on trade ,” said Trump in a statement following Canada ’s —@ don _ pittis .

Rather than cowing China into submission with trade threats , experts who study international trade say, Trump may instead be hastening Don Pittis was a forest firefighter, and a ranger in Canada 's High Arctic islands. First casualty of Trump ' s trade war is his country's reputation: Don Pittis .

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

a man wearing a suit and tie: If the Bank of Canada fears Trump's trade threat is real, it might be forced to reduce future interest rate hikes, effectively giving Canada an unwanted trade advantage.© Jonathan Ernst/Reuters If the Bank of Canada fears Trump's trade threat is real, it might be forced to reduce future interest rate hikes, effectively giving Canada an unwanted trade advantage.

The head of the U.S. Federal Reserve may be the world's most powerful central banker, but U.S. President Donald Trump has put him in an awkward position.

And contrary to the president's promise to increase U.S. exports, if Fed chair Jerome Powell raises interest rates today — and markets are making a 100 per cent bet that he will — odds are he will make it harder to sell his country's goods abroad.

States that supported Trump would get hit hardest in a Canada trade war

  States that supported Trump would get hit hardest in a Canada trade war Trump supporters who are cheering the president's tough stance on trade policy with Canada might want to take a closer look at a CNBC analysis of state level trade data.A review of state-level trade data, though, may give many of them second thoughts.

But there is growing evidence the greatest victim of Trump ' s erratic and seemingly never -ending demands over trade will be the Don Pittis was a forest firefighter, and a ranger in Canada 's High Arctic islands. Stocks rally but still see big weekly losses on threat of Trump trade war.

Employment numbers in Canada and the U.S. may already be feeling the effects of President Donald Trump ' s trade war threats . Don Pittis explains why Trump ' s battle plan to save American jobs won't work.

Meanwhile in Canada, Trump's latest tough trade talk is already giving us an international trade advantage as the U.S. dollar rises on world markets and the loonie falls.

Trade fears offer loonie advantage

There is every reason to think that if U.S. hostility continues, the spread between the two currencies could increase further.

But it's not the kind of advantage Canadians would have asked for. It would be a signal of an economy in trouble.

If our own central banker, Stephen Poloz, believes escalating threats of major trade disruption are more than talk, he would have every reason not to follow U.S. interest rates higher.

a man wearing a suit and tie: U.S Federal Reserve chair Jerome Powell must deal with an overstimulated U.S. economy, but every move he makes is likely to drive the greenback higher.© Ben Nelms/Reuters U.S Federal Reserve chair Jerome Powell must deal with an overstimulated U.S. economy, but every move he makes is likely to drive the greenback higher.

As international trade expert Patrick Leblond reminded us last week , a trade scrap between Canada and the U.S. — no matter how necessary as a response to U.S. bullying — will be far from painless for the Canadian economy.

Mayor John Tory takes on Trump and tariffs at board of trade speech

  Mayor John Tory takes on Trump and tariffs at board of trade speech Mayor John Tory says he stands with Prime Minister Justin Trudeau against U.S. President Donald Trump’s “sabre-rattling”, calling on other big city mayor’s to do the same.Tory, whose public addresses are normally purposefully measured, spent a large part of a lunchtime speech at the Toronto Region Board of Trade on Bay St. Thursday lecturing the U.S. president, saying his “rhetoric” on trade threatens a successful agreement and the economic well-being of two countries.The mayor said he would speak to his counterparts in Canada and the U.S., including those cities with which Toronto has strong economic ties.

—@ don _ pittis . Canadian borrowers know bond traders aren't the only ones to be affected by rising rates. But it ' s fair to ask why anyone would be worried about inflation in Canada when the official inflation But a sudden change in inflation could affect people who have never experienced it before.

In spite of Trump ' s protectionist threats , the Mexican economy is poised for a First World takeoff. Don Pittis · CBC News · Posted: Jan 04, 2017 5:00 There is growing evidence that Mexico and Canada are ideal trade partners and that Canadian business will benefit by opening doors, not building walls.

Canada is not alone in being hurt by Trump's rising protectionist wall. If the U.S. actually follows through, trade flows for many countries will be disrupted.

But with more than 70 per cent of our trade crossing what has been the world's longest undefended border, a serious and protracted trade war with our American cousins will have real economic consequences, and Poloz will be forced to take that into account.

Mortgage relief?

The resulting slowdown in Bank of Canada rate hikes might come as a relief to Canadian homeowners. But the job losses that tag along with trade disruptions as significant as Trump's threatened 25 per cent tax on cars entering the U.S. would bring a different kind of misery.

And the U.S. would suffer, too.

Despite Trump's rants about Canadian milk, agricultural production is deeply integrated across the Canada-U.S. border. Fertilizer, feed and even livestock criss-cross borders because they come from the handiest source, with little consideration of their nationality. Parts, services and manufactured products do the same.

Notley says Trans Mountain pipeline vital in face of Trump's trade threats

  Notley says Trans Mountain pipeline vital in face of Trump's trade threats Notley says Trans Mountain pipeline vital in face of Trump's trade threatsPremier Rachel Notley appealed to Canadians on Tuesday to support the Trans Mountain pipeline expansion as a bulwark against U.S. President Donald Trump’s trade threats.

Completing Donald Trump ' s Mexican border wall seems as far away as it ever did. But some Canadian trade experts fear the protectionist president may be succeeding in building trade walls that could weaken the Gloom over debts and NAFTA threats trounced by 'positive surprises': Don Pittis .

Falling prices could mean investors will look elsewhere. ( Don Pittis /CBC ) According to the CIBC that's changing. 7. Local differences. Partly due to U.S. President Donald Trump ' s sabre-rattling over Syria, oil prices Don Pittis was a forest firefighter, and a ranger in Canada 's High Arctic islands.

a person standing in front of a building: Canadian and U.S. industries are so deeply integrated that if U.S. trade threats are more than just talk, both economies will suffer.© Rebecca Cook/Reuters Canadian and U.S. industries are so deeply integrated that if U.S. trade threats are more than just talk, both economies will suffer.

Paying withering tariffs or finding new sources for those cross-border goods would be a long and expensive process not just for Canada, but for U.S. businesses all along the frontier.

Of course, while Trump thumbs obstreperous tweets, and minions escalate with comments of the "special place in hell" variety, there are many others in the U.S. and Canada trying to lower the tension. So far, stock markets seem to be discounting a worst-case trade breakdown.

But Canada-U.S. trade is not the only issue facing central bankers. Nor is it the only Trump-caused disruption Powell must address.

New figures out yesterday show the U.S. economy is on a tear, with inflation at a six-year high and unemployment at an 18-year low.

The economic stimulation caused by years of cheap money was expected to show a result eventually. But the added stimulus of Trump's tax cuts, paid for with international borrowing, was the icing on the cake.

Trump OKs tariffs on $50 billion in Chinese products: report

  Trump OKs tariffs on $50 billion in Chinese products: report Trump OKs tariffs on $50 billion in Chinese products: reportThe Trump administration is working on an updated list of Chinese goods that will be hit with tariffs, and is expected to release a refined list on Friday, according to the Bloomberg report.

Trump weighing global steel tariff; Canada , Hamilton watching closely. Brexit's economic impact on U.K. could reach .5B a week, bus campaign warns. Why Trump ' s desire for a protectionist wall threatens more than NAFTA: Don Pittis .

3 things that could happen with Trump and trade . "One should never underestimate Donald Trump ," says Appleton, a dual national who has offices in Toronto and Washington. Don Pittis was a forest firefighter and a ranger in Canada ' s High Arctic islands.

Time to stop stimulating

It is Powell's job to figure out how to rein in all that stimulus.

The Fed is selling a trillion dollars in treasuries on international markets to pay for the deficit. It is gradually removing the $4.5 trillion it injected into the economy in the years following the 2008 meltdown. All while it raises interest rates.

According to central bank watcher Scott Aquanno from the University of Ontario Institute of Technology, all three of those moves draw U.S. dollars out of the global system, creating an increasing shortage of capital.

Stephen Poloz wearing a suit and tie: In the past, Bank of Canada governor Stephen Poloz kept interest rates roughly in line with those of the U.S., but a damaging trade war with our largest trading partner could change that.© Christinne Muschi/Reuters In the past, Bank of Canada governor Stephen Poloz kept interest rates roughly in line with those of the U.S., but a damaging trade war with our largest trading partner could change that.

"All of this would not be important if the dollar wasn't the central currency of the global economy," Aquanno says.

But if the Fed continues on this path, he says, it will push the value of the dollar up in world markets, making U.S. exports more expensive, disrupting countries that have borrowed in U.S. dollars and creating a very long-term risk to the stability of the greenback.

These are some of the issues Powell will likely address later today.

So far, the overstimulated U.S. economy continues to do well and economic growth patches over a lot of ills.

But if the mayhem caused by Trump begins to damage the U.S. economy, the president could intervene again, writes University of Oregon Fed watcher Tim Duy , breaking the rule that U.S. central bankers can do whatever it takes to stabilize the U.S. currency.

"I very much doubt President Donald Trump would sit quietly and respect the Fed's independence if economic growth faltered."

Follow Don on Twitter @don_pittis

Canada's steel no security threat: Ross .
Canada's steel no security threat: RossWilbur Ross also acknowledges that the U.S. doesn't have a trade deficit on steel with Canada — and, in fact, has a surplus with its northern neighbour in terms of dollar value.

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