As Trump struggles to get a NAFTA deal going on account of Canada, the above chart puts things into perspective.
Canada is the US’s largest export partner. Moreover, when it comes to goods (as opposed to goods and services), the US consistently runs a trade surplus with Canada.
The US has had a goods surplus with Canada every month since 1985. Nonetheless, Trump is incredibly annoyed at Canada and threatens to put tariffs on Canadian cars.
Here’s the broad picture.
US Balance of Trade 2011-2017
I created the above chart from downloads of these three Census Department files.
Notes
- Hong Kong, Singapore, and Taiwan were added in 2015.
- The format of the reports changed in 2014, but that link has annual totals that date back to 2011.
- Prior to 2014 there was no Exhibit 20 (selected countries).
2018 Subtotals
Mid-year 2018, the US is still running an overall trade surplus with Canada, so this will likely be the fourth year the US records a trade surplus with Canada (total the first two highlighted columns).
Nonetheless, Trump is moaning. And the global chart shows it’s over very insignificant totals.
This is the true nature of the “worst trade deal in history” where Canada is now more important than Mexico.
NAFTA negotiations are at an impasse.
As President Trump threatens to ink a deal with Mexico by Sept. 30 and leave Canada behind, the New York Times asks Can Nafta Be Saved? These Two Negotiators Are Trying.
> For more than a year, Chrystia Freeland, Canada’s foreign minister, and Robert E. Lighthizer, the United States trade representative, have been locked in intense negotiations to rewrite the North American Free Trade Agreement.
> Negotiations, tense from the start, have become increasingly strained, with both sides fighting to win concessions and to protect themselves from the appearance of caving politically.
> To the chagrin of Canadians, Mr. Trump has publicly — and at times gleefully — berated their country over its treatment of the United States, particularly its dairy farmers, and rebuked Prime Minister Justin Trudeau as “dishonest” and “weak” after the Group of 7 summit meeting in June. He has slapped steel and aluminum tariffs on Canada, claiming their metal imports threaten the United States’ national security.
> Mr. Trudeau has openly questioned whether Mr. Trump’s promises are to be believed while Ms. Freeland has angered administration officials by giving speeches lamenting the decline of Democratic values in the West — a thinly veiled barb at Mr. Trump — and courting free-trade lawmakers on Capitol Hill.
P&G Latest Victim
Meanwhile, the Trade War Reaches Procter & Gamble — and Into the Medicine Cabinet.
> Procter & Gamble, the maker of familiar brands like Tide, Pampers, Gillette and Bounty, has been knocked around the past few years by lackluster sales and new competitors.
> Its latest headache is President Donald Trump’s trade war with China. Two weeks ago, the company lobbied to have more than a dozen imported goods left off the list of more than $200 billion worth of Chinese products subject to the trade penalty, which takes effect next week.
> Like hundreds of other companies, it was brushed off.
> Tariffs bite P&G, the country’s leading consumer products manufacturer, at a challenging moment for the industry. Raw material costs are rising. Profit margins are declining. Pricing power is under pressure from retailers. Upstart home and grooming brands are hot. And sales growth has stalled in the face of weak demand.
> P&G has plants across the United States and makes more than 90% of what it sells at home. But like so many other American corporate giants, P&G relies on China for parts and materials to manufacture and package its brands. No one in the United States makes those components.
> P&G is also building a $500 million plant in West Virginia. The plant, which will support 1,800 jobs, “represents the manufacturing site of the future” for the company. It is automated and digitized, and will allow P&G to reduce costs and make products like Dawn dish soap and Head & Shoulders shampoo more efficiently.
> But some of the plant’s infrastructure — pipes, tanks, containers — is produced in China. No US manufacturer produces the specialized components, and tariffs will make it more expensive for P&G to build and operate the plant.
> “These new P&G jobs in West Virginia will be undermined by proposed tariffs,” Jackson wrote. “As the tariff impact ripples through P&G’s manufacturing cost structure, P&G will be under intense pressure to increase the price of finished goods.”
> The White House did not respond to a request for comment.
Bottom Line
Trump is hand-picking winners and losers while raising taxes on US consumers and US businesses.
The only winner that I can come up with is the steel and aluminum producers. Everyone else is a loser.
In short, Trump acts as if government know how to spend your money better than you, and businesses’ money better than businesses.
Also see Value of Exports to Canada and China by State
Mike “Mish” Shedlock
“The only winner that I can come up with is the steel and aluminum producers. “
Not “the steel and aluminum producers” in the abstract. Only economic actors “win” or “lose.” Rather, the winners are half literate PE hacks, who got Trump to force everyone else to bail out their “investment” for them.
And possibly labor unions, as once “winners” and “losers” are determined politically rather than competitively, cost control and efficient operation takes a distant second to currying favor with politicians on the make. And “creating well paying jobs,” never mind how value destroying, has a history of doing just that in idiotopias.
“But some of the plant’s infrastructure — pipes, tanks, containers — is produced in China. No US manufacturer produces the specialized components…”
Globalism was supposed to turn us all into one big happy family. Well, it is not turning out that way. The pendulum moves back the other direction, when the economy goes sour.
China makes a lot of products that we use, but the governmental relationship with China is deteriorating as China becomes a more powerful nation. At some point in the future, pipes, tanks, containers, etc., may not be available to us from China.