NAFTA stands for the North American Free Trade Act, but President Donald Trump does not.
After campaigning on a promise to repeal the act, then adapting his position to that of merely supporting the act’s renegotiation, Trump recently announced that he would no longer tolerate the status quo arrangement for American imports of dairy and forestry products originating from Canada.
Proposing, on April 24, to add a 24-percent tariff on American imports of Canadian softwood lumber, Trump kept up the pressure on Canada the following day, tweeting, “Canada has made business for our dairy farmers in Wisconsin and other border states very difficult. We will not stand for this. Watch!”
Watch! indeed: the value of the loonie fell sharply the week of the tweet, as investors worried how Canada will fare when it comes to the broader renegotiation of NAFTA Trump continues to promise.
Trump’s targeting of Canada in this way is not likely to have been random. Nor was it entirely economic in its intention. Rather, Trump brought up the issue in order to prove his anti-NAFTA bona fides to his political base, however, in a way that manages to avoid the hairier subjects associated with NAFTA’s other signatory, Mexico, such as those of immigration, racism and The Wall.
Trump has admittedly been careful to direct attention to goods of lesser importance, like dairy products and softwood lumber, rather than to Canada’s key exports of oil (from Alberta) and auto parts (from Ontario).
Still, he has been far tougher on Canada — at least in his rhetoric — than has any other recent president. To use a Trumpian phrase: Canada has now been put on notice. (more…)