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Reuters reports Canada, Mexico push back on Trump's 'fair' NAFTA deal suggestion.

The two U.S. trading partners have threatened retaliation unless they are exempted from the planned tariffs, which have rattled financial markets. Both Canada and Mexico send more than 75 percent of their goods exports to the United States.

Canadian Finance Minister Bill Morneau, speaking north of Toronto, said Ottawa is now negotiating NAFTA with a partner that has“changed the terms of the discussion,” referring to the United States.

Mexico Must Tackle Drugs

Also Canada Must ...

Treat US Farmers Better

US Crop Subsidies

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US Crop Subsidies total $20 billion a year with most of the money ending up in the hands of big, rich farmers producing staple commodities such as corn and soybeans in states such as Iowa.

Corn is the top crop for subsidy payments. The Energy Policy Act of 2005 mandates that billions of gallons of ethanol be blended into vehicle fuel each year, guaranteeing demand, but US corn ethanol subsidies are between $5.5 billion and $7.3 billion per year.

New Zealand

New Zealand is reputed to have the most open agricultural markets in the world after radical reforms started in 1984 by the Fourth Labour Government stopped all subsidies.

In 1984 New Zealand's Labor government took the dramatic step of ending all farm subsidies, which then consisted of 30 separate production payments and export incentives. This was a truly striking policy action, because New Zealand's economy is roughly five times more dependent on farming than is the U.S. economy, measured by either output or employment. Subsidies in New Zealand accounted for more than 30 percent of the value of production before reform, somewhat higher than U.S. subsidies today. And New Zealand farming was marred by the same problems caused by U.S. subsidies, including overproduction, environmental degradation and inflated land prices.

I think we should treat New Zealand farmers better by removing our tariffs on all agricultural goods, just as they do.

Mike "Mish" Shedlock