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Bugs





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PostPosted: Tue Mar 06, 2018 1:53 pm    Post subject: Reply with quote

It sure does.

In fact, the present danger is the political leadership will cave in return for a face-saving gesture. It would be hidden, but the theatre and the reality will be at odds.

Trump is using NAFTA to get us to accept these tariffs. Those who are not challenged by practical economics will recognize that this involves a transfer of jobs and capital to the US from Canada. Whether we have NAFTA or not.

The people who parrot this line that a trade war will hurt the US more than it will hurt us are laughable. 80% of our trade is with the US. We have very little other foreign trade.

Trump has used the auto pact to threaten us. Implicit, he is using this as a threat now, and he could use it repeatedly as a threat, and then cancel it anyway.

The problem is -- to strike back effectively, we have to penalize American investor class. Otherwise, any countervail we would use would be futile. Trump is already offering those people enticements to return to the USA. That would only add to the encouragement.

I wish I knew the answer. I thought, at first, that Canada would ride this out, as the one trading partner that was playing fair, that while we had a trade imbalance it was because we provided natural resources, and that it was Mexico that was the problem. thought if we were willing to give up supply management, we should put that on the table just to dilute attention from the auto pact.

It doesn't matter now. Trudeau's team have not been constructive. And that possibility might never have existed, but it is almost certainly gone now.

===================================

I think that Canada is at a fundamental turning point. We have built a monstrous welfare/social justice bureaucracy that we can't afford. In that, we are typical of the west, except we outperformed them. We have to go back to the conditions that allow us to build up some industries. We need a Volvo Corp -- or six. We need nuclear power and factories, and no minimum wage and the best education accessible only through demonstrated ability -- all the things that would make it possible to transition to an economy that uses our own resources to make products the world wants.

When Toronto was young, it had no industry, and no source of wealth. It was almost a barter economy. Subsistence wasn't the problem -- there was an abundance of wheat and such crops. The problem was the abundance of food was continental. We couldn't sell food to Americans because they had so much. So the first settlers started making booze, and a generation later, they had the biggest distillery in the British Empire.
Before they were through, that booze-plant had created a pork feedlot operation of scale -- thus Hogtown -- and went on to create the Bank of Toroto. And it went on to help Ontario to develop.

We have to get back to that kind of thinking, and finding ways to sell what we have in a abundance. Not today, maybe not tomorrow, but soon.

That's how I see it.
cosmostein





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PostPosted: Tue Mar 06, 2018 3:21 pm    Post subject: Reply with quote

If NAFTA is the worst deal of all time;
You cancel it.

You give your six months notice and its done.

The threat of tariffs on steel and aluminum followed by two days later the idea that these tariffs can be waived if a new NAFTA agreement is reached doesn't give me the impression the US is looking to walk away.

While I do agree that Canada would more harmed economically by the cancellation of NAFTA but I would still argue that the US economy would be effective in some negative capacity with potential tariffs or trade obstruction on nearly a billion dollars a day worth of crude crossing the border via tanker or pipeline.

Its not within their best interests to simply walk away, otherwise they would have done it already.

What I am gathering from the intervention of the President is that he wants the deal done and he wants it done well ahead of primary season. Its a matter of frustration that the deal isn't done otherwise why bother with the threat and then almost immediately walk it back on the condition that NAFTA is renegotiated and signed?

From the looks if it all parties were getting closer and Its now simply a matter of scoring "wins" in the negotiation that he can campaign on in November within the Rust Belt rather than an interest in just up and leaving.
Bugs





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PostPosted: Tue Mar 06, 2018 11:42 pm    Post subject: Reply with quote

I have been checking out various commentators about what is happening.

These are longer videos and are given by people with expertise.

This video gives us a view of the world situation in the present running into the next 20 or 30 years or so. The lecturer, an author and researcher, has written two books on his subject. He uses demographics, economics and geopolitics to outline why a historical era that started after World War II is ending. He goes on to show how these pressures in other major countries. The lecture is an hour long.

https://www.youtube.com/watch?time_continue=19&v=feU7HT0x_qU

I don't know if he's right, but a lot of it makes sense to me.

This is a criticism of Trump's tariff policy. Peter Schiff is an Austrian economist/investment banker who has a regular YouTube audience.

https://www.youtube.com/watch?v=soCzGQGt2jY&t=2090s

This is a half-hour long, but you can get a good idea of what he is going to say in the first ten minutes. His point is that Trump's tariffs won't fix the problem.
cosmostein





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PostPosted: Thu Mar 08, 2018 3:50 pm    Post subject: Reply with quote

Quote:
Canada, Mexico getting indefinite relief from Trump's steel, aluminum tariffs

Canada can breathe easier, for now: It’s getting relief from U.S. tariffs for an undetermined period.

U.S. President Donald Trump is signing proclamations hammering global steel and aluminum imports with tariffs of 25 and 10 per cent. They go into effect in 15 days.

Trump is signing the documents at the White House, surrounded by steelworkers.

Only two countries are getting relief: Canada and Mexico.

Speaking in a briefing, a senior administration official says there’s no end date set on the exclusions.

The official, speaking on condition of anonymity in order to discuss matters in advance of them being made public, would not speak to the issue of whether the threat of tariffs would be used to bully Canada and Mexico at the NAFTA bargaining table, saying only that NAFTA is important to economic and national security.


http://business.financialpost......ned-period
cosmostein





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PostPosted: Thu Mar 08, 2018 3:54 pm    Post subject: Reply with quote

This actually gives Mexico and Canada a carrot for NAFTA negotiations;

https://www.trade.gov/steel/countries/pdfs/imports-us.pdf

The US imports more steel from Canada than anywhere else, Mexico is essentially 4th.
With Brazil (2) South Korea (3), and Russia (T4) all having to pay tariffs on their material it makes Canadian and Mexican steel more appealing within the US market.

Well played.
RCO





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PostPosted: Thu Mar 08, 2018 4:48 pm    Post subject: Reply with quote

Trump had no choice but to give Canada and Mexico exceptions for now , considering they are re negotiating NAFTA . how could you impose tariffs and expect these countries to agree to a trade deal ?



by doing this Trump is also indicating he's serious about trying to win the mid west again as most of the US steel mills are in that area ( Ohio , Indiana and PA ) and as crazy as these tariffs are they might still find support among blue collar workers and union members in those areas


but the long term affects of these tariffs is unknown and consumers are cheap , no one wants to pay more for things
Bugs





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PostPosted: Thu Mar 08, 2018 11:51 pm    Post subject: Reply with quote

RCO wrote:
Trump had no choice but to give Canada and Mexico exceptions for now , considering they are re negotiating NAFTA . how could you impose tariffs and expect these countries to agree to a trade deal ?



by doing this Trump is also indicating he's serious about trying to win the mid west again as most of the US steel mills are in that area ( Ohio , Indiana and PA ) and as crazy as these tariffs are they might still find support among blue collar workers and union members in those areas


but the long term affects of these tariffs is unknown and consumers are cheap , no one wants to pay more for things


I have been musing and listening to Americans' sources about the announcement, and have come to some conclusions. First, I think Cosmo's comment about Chapter 2 from The Art of the Deal was very shrewd. Second, it is becoming apparent that the announcement, as it applies to Canada and Mexico, is a slap on the behind' to urge us into a practical agreement on NAFTA. But the main target of tariff is probably China, and Japan.

What I end up thinking is that we are being hurt by the inclusion of Mexico. We should suggest going back to the pre-NAFTA agreement, the FTA, and negotiate from there, perhaps. We could offer to liberalize some trade items further in return for the some other conditions we would like.

In short, we should give Trump an early victory, and reap some rewards.

The last thing in the world we should do is to force Trump to give us exemptions. It's the surest way to get his back up -- tell him he has no choice. If we were always going to get exemptions, we will get them this way as well as any other, but this way creates a little good will where the other creates antagonism.
Bugs





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PostPosted: Fri Mar 09, 2018 11:50 am    Post subject: Reply with quote

I remarked, on a different thread, that (as I see it) the trade war will be the retaliation to the changes Trump has brought in.

Trump policies are better conceived as effective moves towards ending certain kinds of trade, or at least penalize it. He doesn't want to expand trade -- he wants to reclaim jobs. And the commodity that tops of the list of things creating imbalanced trade is automobiles.

Trade in automobiles is notoriously unfair. That is, countries that export cars that enter North America under low tariffs have more severe tariffs against the US products. They also use what are called "non-tariff restrictions on trade". The EU is a plan to have European free trade without letting non-Europeans compete. Check it out.

This shows what Germany is looking at. This is from CNBC.

Quote:
... Trump threatened via Twitter on Saturday to hit back at any tariff measures from the European Union — floated in response to Trump's recently announced global steel import tariffs — in kind. The billionaire businessman's potential next target? European cars. And the biggest victim of them all may be Germany.

"It would be quite severe if we were to face additional import duties to ship the cars into the U.S. — the Germans in particular are very, very exposed," Arndt Ellinghorst, the head of global automotive research for advisory firm Evercore ISI, told CNBC Monday.

He noted the example of BMW, which sells about 350,000 cars in the U.S. annually, roughly 70 percent of which come from Europe. "That's probably an $8 billion to $9 billion revenue stream, if you put a 5 to 10 percent additional cost on it, it would cost something like $400 million to $800 million. Some of that would be absorbed by the company, and some of it would have to be absorbed by the consumer in the U.S."

Ellinghorst did add that cars being shipped from the U.S. into Europe faced a 10 percent import duty while European cars into the U.S. faced a 2.5 percent import duty. "I think what the administration is talking about is to balance out this difference in tariffs to make it more of an equal playing ground for American and European carmakers," he said.

Out of roughly six million cars exported by Europe in 2016, more than one million were absorbed by the U.S. — just over 16 percent — its largest country market by a wide margin. Meanwhile, of America's $53.6 billion in car exports that same year, the value of its car exports into Europe was $11.8 billion, or roughly 22 percent of the total, according to the Observatory of Economic Complexity.

The U.S. is the third-largest car exporter globally after Germany and Japan, accounting for 7.7 percent of total world exports. It ran a trade deficit of more than $151 billion overall with Europe in 2017.
https://www.cnbc.com/2018/03/05/trumps-tariff-threat-on-european-cars-could-spell-big-trouble-for-germany.html


Trump is moving to recapture market for American auto producers. He may be willing to drop the tariffs if countries like Japan and Germany, and the EU, let American products compete in their markets. I am putting the case this way to cut through the fog of those that believe that a trade war is something no nation wins.

Canada should smarten up. Our path ought to be to dissociate ourselves from Mexico and start cutting out own deal on the basis that we are not the problem.
cosmostein





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PostPosted: Fri Mar 09, 2018 12:13 pm    Post subject: Reply with quote

Quote:
Elon Musk sides with Trump on trade with China, citing 25% import duty on American cars

-Elon Musk believes China isn't playing fair in the car trade with the U.S.

-The auto executive says the Asian country puts a 25 percent import duty on American cars, while the U.S. only does 2.5 percent for Chinese cars in return.

-"I am against import duties in general, but the current rules make things very difficult. It's like competing in an Olympic race wearing lead shoes," Musk tweets.


https://www.cnbc.com/2018/03/08/elon-musk-sides-with-trump-on-trade-with-china-citing-25-percent-import-duty-on-american-cars.html
Bugs





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PostPosted: Fri Mar 09, 2018 12:37 pm    Post subject: Reply with quote

This is how the US trade deficit is skyrocketing.

These are annual numbers.

Even in the late 1980ies, they were losing about $100 billion a year to a negative trade balance. At the end of Bill Clinton's administration, it had risen to $328 billion. At the end of W's regime, it was up to $800 billion. A year, year after year! Since then, the trade deficit has perked along at in the $725 to $750 billion range for eight years!

Obviously this can't go on forever.

To balance the picture, we have to remember that these policies also created a world prosperity that the world hasn't seen ... since civilization started!

The point is to separate the baby from the bathwater. The thing is -- this can no longer be done this way. Trade has to be more balanced, and the US has to take steps to protect what remains of its own economy.
Bugs





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PostPosted: Sat Mar 10, 2018 8:59 am    Post subject: Reply with quote

New voice heard from, this time from Scaramucci ...

Quote:
Scaramucci on Trump's negotiating style: 'He punches you in the face first'

Rachel Aiello, Ottawa News Bureau Online Producer
Published Saturday, March 10, 2018 7:00AM EST

OTTAWA – A former close adviser to Donald Trump says the U.S. president’s negotiating strategy depends on whether he views you as an ally or an adversary, and as far as he can surmise, Canada is considered the former.

"What the president is really trying to do is embolden our allies and put a very big hurt on our adversaries, and he clearly sees Canada, and your prime minister, as a great ally," former White House communications director Anthony Scaramucci told Evan Solomon in an interview airing Sunday on CTV’s Question Period.

The pair discussed the coming meeting between Trump and his North Korean counterpart Kim Jong Un, inter-White House dynamics, and the latest on the trade and tariff file.

"He has a negotiating position where he punches you in the face first, and then starts the negotiation, and he’s probably done that for 45 years... So I think he’s applying that tactic now," Scaramucci said of the ongoing tensions between the U.S. and North Korea.

In contrast, he said Trump is taking a different approach with Canada when it comes to negotiating. Referencing the ongoing NAFTA negotiations and Trump’s recent proclamation that Canada and Mexico will be exempt from steel and aluminum tariffs for the time being, he said all Trump is after is "some level of symmetry and fairness."

Scaramucci said while he can’t speak for the president, he knows him well, and his best guess is that NAFTA won’t get ripped up, rather there will be moderate adjustments in the U.S.’ favour.

"I don’t see a situation where we’re in a conflagration with each other. The standing relationship has been too great, and it’s too sacred to both of our great nations, so I predict that this thing will end in a compromise."

The short-lived White House aide’s advice for any country negotiating with Trump these days?

"After he hits you, really study what he wants to do… The president has never throughout his history been a zero-sum negotiator playing a win-lose situation… He’s looking for the win-win outcome for everybody, so after he hits you once, take a step back and look at where you think things can go, where both sides win, and I bet you that the president will get you there." [Emphasis added]

While he couldn’t speak directly to what Trump thinks of Prime Minister Justin Trudeau, as the two never discussed it during his 11-day tenure, Scaramucci said he “admires” Trudeau.

"He sees him as a very strong leader, perhaps somewhat different politically on certain views, but I think he enjoys his personality and he enjoys his charisma and he likes his youth and his energy, there’s no question about that."
https://www.ctvnews.ca/politics/scaramucci-on-trump-s-negotiating-style-he-punches-you-in-the-face-first-1.3836706


All of which says to me that working with Trump, and at least getting out of the way of the bigger struggle (with the Asian countries) is the best course for Canada.

If we are getting exemptions, we should recognize that it's because (1) we are so integrated into the American economy, as a supplier to the market, and (2) in relative terms, we play fair, and enforce what we say we'll enforce.

It means accepting who we are, as a nation, and that we are like Scotland to England -- and that's not a bad situation to be in. But we don't have a choice about which side we're on. We can't be "independent" without losing something vital. Sticking our national thumb in America's eye probably doesn't work.
Bugs





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PostPosted: Tue Mar 13, 2018 11:46 am    Post subject: Reply with quote

Quote:
Trump stresses desire for quick NAFTA deal in phone chat with Trudeau
By Alexander Panetta — Mar 13 2018

WASHINGTON — President Donald Trump urged the quick completion of the NAFTA negotiations in a phone call with Prime Minister Justin Trudeau on Monday, amid indications the U.S. wants a deal wrapped up this spring.

Trudeau called his American counterpart during a tour of aluminum facilities in Quebec, on a day the prime minister did American television interviews to promote the integrated Canada-U.S. economy.

What he heard directly from the president echoed public remarks from Trump's administration: the U.S. trade czar recently said he wants a new NAFTA concluded within weeks, because of upcoming elections in the different countries.

The U.S. has said further delays might imperil the negotiations, with an outsider candidate leading polls for Mexico's July 1 election, and with Trump's party in danger of losing control of the U.S. Congress.

"We recognize that the American side is eager to get forward motion on NAFTA," Trudeau told CNN's Anderson Cooper, in one of his U.S. interviews.

"We are too. So we're glad to do it."

Trudeau said tariffs on Canada would have made it harder to get a deal, and said he raised that with the president. He also credited Trump for keeping a promise: he said the president told him at last year's G7 that Canada would get an exemption, and kept his word.

NAFTA talks might now enter an intense phase: "President Trump emphasized the importance of quickly concluding the ongoing NAFTA negotiations," said a readout from the White House on Monday's call with Trudeau.

"(That would) ensure the vitality of United States and North American manufacturing industries and ... protect the economic and national security of the United States."

Foreign Affairs Minister Chrystia Freeland will be in Washington for three days this week — meeting with U.S. Trade Representative Robert Lighthizer, Commerce Secretary Wilbur Ross, and key members of Congress.

But some veterans of the original NAFTA have expressed doubt that it's feasible to complete a deal by spring; that's what it would take to complete the ratification procedures during the current Congress that leaves office this year.

Trudeau is also brushing off the idea that Canada might be bullied into a deal.

The U.S. government has been dropping hints that the decision to excuse Canada and Mexico from tariffs on steel and aluminum might only be temporary, and somehow dependent on the result of trade negotiations.

Trudeau told another U.S. network that he sees them as separate issues: ''We don't link together the tariffs and the negotiations with NAFTA," he told CNBC in an interview from a Quebec aluminum plant Monday.

Trudeau also rejected the idea that the tariff exemption was some kind of benevolent American favour that required repayment. In Trudeau's view, the U.S. wasn't just helping Canada — it helped itself by refraining from slapping tariffs on its No. 1 supplier of both steel and aluminum.

''The exemptions aren't a magical favour that was being done (for Canada)," Trudeau said.

"(We're) highlighting that the imposition of tariffs on Canada would end up hurting the U.S. almost as much as it would hurt Canada.''

Trudeau's view has prominent support: A poll of leading economists from the University of Chicago has found rare unanimity on the topic, with a newly released survey Monday showing that zero per cent of economists surveyed believe tariffs will help Americans.

He made the point by mentioning in his CNBC interview that he was a few kilometres from the Bagotville air force base, built during the Second World War to protect critical aluminum supplies required by the military.

On the subject of national-security tariffs, Trudeau told CNN: "Canadian aluminum is in your fighter jets. Canadian steel is in your tanks. There is no better security partner in the world... So that whole issue of national security is off the table.

The prime minister is on a cross-country tour of aluminum and steel factories to demonstrate his government's support for workers in light of potential threats to those industries from the U.S. administration.

Other stops will include Hamilton, Sault Ste. Marie, Ont., and Regina.

The Trump administration has set tariffs of 25 per cent on steel and 10 per cent on aluminum, applicable to every country except Canada and Mexico. While the penalties take effect later this month, Trump has encouraged countries to try negotiating exemptions for themselves.

Canada is the United States' largest foreign provider of steel and aluminum, with about 85 per cent of Canadian exports being directed to that country.

— With files from Giuseppe Valiante

Alexander Panetta, The Canadian Press
https://www.nationalnewswatch.com/2018/03/13/trudeau-to-kick-off-tour-of-steel-and-aluminum-factories-in-quebec-3/#.Wqf-_SjwbIV


For my part, I wish we could forget the theatrics. This is our opportunity! If we give Donald a quick win, it is worth something to him. If we get out of this virtually unscathed, I say, grab the deal. And I would lead the applause for Justin Trudeau if he did something that smart. My opinion.
Toronto Centre





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PostPosted: Tue Mar 13, 2018 12:13 pm    Post subject: Reply with quote

Absolutely ! Agree 100%
cosmostein





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PostPosted: Tue Mar 13, 2018 5:14 pm    Post subject: Reply with quote

From the sounds of it the team "in the room" has evolved significantly over the clown show that started the process.

Mulroney and several CPC members (Former MPs, etc) being tagged in later in the game at least seemed to acknowledge that the initial approach required some "fine tuning".

Since Mulroney testified in front of the Senate Foreign Relations Committee the tone from the Canadian side has changed significantly.

We are no longer dictating to sovereign nations our wishes at the expense of their democratic choice and that is a huge step in the right direction.

It sounds like they are close, it also sounds like the President wants this wrapped up, and I tend to agree with Bugs & TC here.

If you can walk away unscathed and be done with this before summer, get it done.

Canada was well positioned with a series of alternatives for Canadian exports which can now become the focus again once NAFTA is re-signed.
Bugs





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PostPosted: Thu Mar 15, 2018 9:11 am    Post subject: Reply with quote

Quote:
Loonie Tests 2018 Lows As Canada Existing Home Sales Crash To 5 Year Lows
by Tyler Durden
Thu, 03/15/2018 - 09:25

The Canadian Dollar dropped, testing the lows of 2018, following CREA data showing existing home sales crashed to the lowest since 2013 and price appreciation slowed dramatically.

Home sales via Canadian MLS® Systems were down 6.5% in February. This marks the second consecutive monthly decline following the record set in December 2017 and the lowest reading in nearly five years.

February sales were down from the previous month in almost three-quarters of all local housing markets, with large monthly declines in and around Greater Vancouver (GVA) and Greater Toronto (GTA).

Toronto home sales are down 8.2% MoM!

Vancouver home sales are down 15.8% MoM!

Actual (not seasonally adjusted) activity was down 16.9% year-over-year (y-o-y) and hit a five-year low for the month of February. Sales also stood 7% below the 10-year average for the month of February. Sales activity came in below year-ago levels in 80% of all local markets in February, including those nearby and within Ontario's Greater Golden Horseshoe (GGH) region.

Quote:
"The drop off in sales activity following the record-breaking peak late last year confirms that many homebuyers moved purchase decisions forward late last year before tighter mortgage rules took effect in January," said Gregory Klump, CREA's Chief Economist.

"Momentum for home sales activity going into the second quarter is also likely to weighed down by housing market uncertainty in British Columbia, where new housing polices were introduced toward the end of February."


Furthermore, CREA notes that the Aggregate Composite MLS® HPI rose by 6.9% y-o-y in February 2018. This was the 10th consecutive deceleration in y-o-y gains, continuing a trend that began last spring. It was also the smallest y-o-y increase since October 2015.
https://www.zerohedge.com/news/2018-03-15/loonie-tests-2018-lows-canada-existing-home-sales-crash-5-year-lows


Is the economy cooling? Often, when people see mortgage increases coming, sales go up.

This will affect the Brain Trust that runs the trade file.
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Trump announces new tariffs on steel, aluminum ...

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