NAFTA

“President Trump is committed to renegotiating NAFTA. If our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the United States’ intent to withdraw from NAFTA.”
 
See Trade Deals Working For All Americans
Well, assuming nuclear war doesn’t break out tonight, my number one concern with Trumpism is NAFTA, the North American Free Trade Agreement, you know the one that says Mexico, USA and Canada will treat each other’s goods and services like their own, crossing borders without duties paid. What could be more fair than that? Trump hasn’t actually said what he thinks is unfair with NAFTA, except that some jobs have been exported to Mexico that used to be in USA. What about Canadian jobs that moved to USA, eh? Like Winchester? Lots of USA corporations used to have Canadian branch plants. They’ve pulled back to USA because there was no longer a cost for goods to cross the border except freight. You don’t hear Canadians whining about that, eh?

So, the supposition is that the only thing that will please Trump is USA being the only party to NAFTA allowed to place duties on imports. That just isn’t going to fly, so the likely outcome is that NAFTA is dead, tariff barriers will go up and jobs will return to Canada, like Winchester and car-makers and USA will have fewer, not more jobs. Car companies may decide that they should all leave USA and that USAians love cars so much that they will pay whatever taxes Trump levies on them. That should make him popular during the mid-terms and definitely will cut him out of a second term…

The complete inability of Trump to remember the bad old days of trade wars means USA is bound to bring them back and we all lose. Those who ignore history are bound to repeat it. What a waste of time. I was there. Those weren’t the good old days. The enemy of jobs these days is lack of education and an inability of products of the USAian education system which cranks out people suited to the old economy rather than the future. I’m sure DeVos will wreck the rickety education system with her war on universal public education. Already teachers aren’t paid enough and she wants to pay them less unless they are working in schools reserved for her rich friends. Expect some circling of the drain before USA goes down hard with self-inflicted wounds.

Oh, yes, about that site:whitehouse.gov that used to run on GNU/Linux and Drupal content management system. Trump has someone up and running Drupal. He’s archived a lot of old content and plastered it with many articles praising his administration which hasn’t done much yet… OS is now listed as “unknown” and the IP address changed today and the domain name was updated this morning and the “copyright” link is broken… “Please release Trump’s tax return” petition is still up short of 100K though.

I guess he couldn’t wreck everything on the first day. I’m sure he’ll keep trying.

Oops! Found another one, “President Trump is committed to eliminating harmful and unnecessary policies such as the Climate Action Plan and the Waters of the U.S. rule. Lifting these restrictions will greatly help American workers, increasing wages by more than $30 billion over the next 7 years.”

OK, Trump considers jobs/wages important but not clean drinking water… How does that work? Is he going to grant Trump Water a monopoly? Isn’t water essential to life? Isn’t it better to have clean water? “Again” in MAGA seems to mean “Reset Life To About 1800 So Everyone Can Pollute Freely”. This guy is not your friend, working stiff. He’s out to help his rich friends ruin your heritage, making a quick dollar and heading to healthier locations.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.

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8 Responses to NAFTA

  1. dougman needs repetition… “The rest of the world can pay their countries own tariffs.”

    Don’t you understand? Under Trumpism, USA will be the only country in the world taxing trade except for stuff crossing USAian borders. Country A, B, and C will tax USAian exports coming into their countries. That puts USA at a competitive disadvantage. USAian manufacturers will have to pay more for imports by 35%, putting them at a further disadvantage. It won’t add to 70% because USA can still make stuff but it will be more than 35%. If imports into USA cost more, and exports cost more to buy, there will be less trade by USA with the world. That will cost the USAian economy GDP and jobs. Meanwhile A will sell to B duty-free. B will sell to C duty-free and A will sell to C duty-free and vice-versa, with everyone laughing at USA, all the way to international banks. USA will become a backwater like North Korea, essentially walling itself off from the world’s economy. That will make every USAian business smaller, less efficient and the whole GDP will drop. I don’t know by how much but it will matter.

    Another example. Suppose the world decides M$ is getting a free ride from free trade. Since NAFTA and other agreements will be nullified, the world can then tax M$’s products at whatever rate they like. They don’t need to have reciprocity. I propose 100% taxation. Then M$ will suffer huge competition from GNU/Linux, not Apple because Apple will likely be taxed too. Want to bet M$ and Apple decide to escape Trumpism and become non-USAian? That would make a lot of sense because the world is becoming the majority of their market. Again USA will be charging themselves ~35% more to use stuff they now get very cheaply. That’s a dead loss to USA in GDP, money, trade balance and employment. Get the idea?

  2. ram says:

    Subsidies are worse than tariffs. That is what Australia has — massive subsidies to the fossil fuel industry and to heavy users of fossil fuels. It has caused grotesque distortions to the economy to the point that almost every “business” is subsidized, directly or indirectly, and the real economy that might make things people would genuinely want, has all been shut down.

  3. dougman says:

    “you are running a factory. Trump applies a 35% tariff on imports. Suddenly making widgets in Mexico is 35% cheaper. You shut down and move the factory to Mexico and prosper.”

    35% cheaper? My number one priority would be to America. The rest of the world can pay their countries own tariffs. In fact, the rest of the world can piss off.

  4. dougman wrote, “Imagine all the factory jobs that would be brought back.”

    OK, so you are running a factory. Trump applies a 35% tariff on imports. Suddenly making widgets in Mexico is 35% cheaper. You shut down and move the factory to Mexico and prosper. Competitors from USA are at a disadvantage so they lose global market-share. Then they move to Mexico. The result, a huge loss in USAian jobs and higher prices for consumers. How does that help USAians in the least?

    Tariffs are bad for business. Going back to perpetual trade wars will not make USA great again. It will isolate USA from the world’s economy. Face it. The cost of production of many things is higher in USA than elsewhere. Making lots of stuff is less efficient in USA. Requiring USAian businesses to be inefficient is a death sentence. Meanwhile the world will carry on having free trade and prospering. Trump will not persuade every country on Earth to go back to tariffs. If there are tariffs they will be at the USAian border and will amount to self-imposed sanctions on USA.

    Trump is having USA shoot itself in the foot. GOPers in Congress can see that and will join with Dems in the Senate to oppose Trump for his first term and then he will be booted out. Lesson learned.

  5. dougman says:

    Mexico has a thriving economy. Mexico City has many big-name stores to shop from.

    NAFTA is about making America great, not Canada, not Mexico. Trump does not care what Enrique or Justin does or says, both are leaders of wimps. At least Trudeau is willing to negotiate: https://foreignpolicy.com/2016/11/10/trudeau-tells-trump-hes-ready-to-renegotiate-nafta/

    Trump’s goal is “to put American workers and businesses first when it comes to trade” with the goal of returning millions of jobs to America — 95 million Americans are out of work. Imagine all the factory jobs that would be brought back.

  6. oiaohm says:

    http://www.industryweek.com/who-is-killing-manufacturing

    Kurkosdr you have to wake up the reason why Mexico is such a mess with low wages is a historic USA government taking the policy of USA first.

    NAFTA was totally not fair process and not well considered. So USA ships cheaply made grain using machines Mexico people could not at the time afford to own. Now Mexico farmers have to learn how to live on a lower income due to having to use more labour to get same volume of grain but the price is now capped at USA price. So now some manufacture comes to Mexico offers their farmers a higher wage than they can make farming but way lower than the USA wage. There is a catch here Mexico min wage is so low because the USA forced to lower by sending grain and other food products at prices lower than what Mexico farmers could make and produce themselves anywhere near the half of the USA min wage so the Mexico min wage reduced to where it is today.

    So on grain when the NAFTA was set-up Mexico should have had allowed tariff to be invested in bringing Mexico farmers onto a level playing field with USA ones.

    This is not the only example where is the freetrade agreement mostly dictated from the USA saying you must not have any tariffs on our farming produce mostly because the USA is producing too much of it and does not know what to do with it.

    So yes instead of USA dealing with their own internal problems of being over productive in food products USA has attempted to dump this on others so in time destroying the countries min wage where they have done that and the long term price has been losing manufacturing because USA wages are too high. Of course USA stupidity like this has also harmed Australian manufacturing but that is because of the way Australia has done trade deals but because USA has nuked so many countries min wages its not funny.

    Also remember if a country has a poor min wage because of USA stupidity they cannot afford to buy as much Manufactured product either. So this comes a double sided problem. One mistake end up reducing the customer based for Manufactured product.

    https://www.theguardian.com/news/2015/nov/03/obese-soda-sugar-tax-mexico
    Sticking to Mexico its not just grain that is the problem due to Coka Cola and others that is not a healthy product being allowed in by trade agreement Mexico government has a bigger medical problem to deal with so giving the Mexico government less money to invest in improving infrastructure. Yes improving infrastructure would increase demand for a higher min wage.

    Now if you go to lots of countries that have taking USA manufacturing you find the same story. USA did USA first that resulting in reducing the quality of living in those countries so reducing the min wage so making those countries more profitable to do Manufacturing in than the USA.

    So if Trump sticks to his exact words of USA first all he is going to do is dig the USA into a deeper hole because he is going to be doing the same things that dung the USA in the hole in the first place. What is need is true fair trade where the trade agreements are designed allowing for all sides to have tariff as long as the money taken in tariff will be invested in creating equal cost of production and when the reduced as cost of production corrects to where the product cost the same to make and delivers same wage in all countries in the trade agreement.

    Maybe Trump has a brain and put everyone on level terms world wide not USA first and makes sure that all USA trade with other countries is sustainable. This includes applying tariffs on USA product going to particular countries and investing in those countries to bring the quality of living up so that Manufactures will not find cost saving going to those countries any more.

  7. Kurkosdr wrote, “Trump’s sense of fairness is America first.”

    For a guy who’s been complaining that the world is full of smart people taking advantage of USA, Trump is pretty stupid to think the world will accept trade deals wherein USA gets the advantage. That’s just not going to happen. No tariffs is fair. One-sided tariffs are not. Expect a global trade war which will damage the world’s economy and severely weaken USA’s place in the world. If we don’t trade with USA, there’s no need to cater to USA. Time to move the server again…

  8. Kurkosdr says:

    “. What could be more fair than that? Trump hasn’t actually said what he thinks is unfair with NAFTA, except that some jobs have been exported to Mexico that used to be in USA. ”

    Trump’s sense of fairness is America first. Aka, what would probably benefit the US? Nationalism is a thing again. Is that a good thing? Hell if I know. I am just giving you the prism with which you can observe things from now on.

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