Here’s a good summary of just how tightly integrated the US and Canadian economies are, in 8 sectors:
Bottom line: it would take a tremendous amount of effort to de-integrate the Canadian and US economies in these sectors; it would take a lot of time; and prices would go up.
But aside from that …
To answer this question directly, because people cannot see numbers. Some things are visible and obvious and some are not.
One of the things about this stuff is that an impact on jobs that is direct and focused is easy to perceive and an impact that is indirect is not. If the US government places a huge tariff on steel, and a US steel plant adds 500 jobs to make up for some of the reduced imports, that’s very obvious and easy to perceive. 500 jobs is 500 people better able to support thier families. You can clearly see that.
But that same huge tariff is probably costing the USA 50,000 jobs elsewhere. The tariff makes countless products a little more expensive and people can’t afford quite as many things, reducing demand for basically everything, and costing a job here and a job there, and that government intrusion into the free market adds up. But you cannot SEE that. One job lost in this factory, one job lost in that store, one fewer truck driver delivering goods, adding up to 50,000 jobs but no one of those jobs is obviously connected to the steel tariff.
It’s a classic example of why you cannot trust perception and hunch.
The whole “We don’t need anything from Canada” thing is even more stupid than this. it’s not even worth asking because the term “need” means nothing here.
There is nothing the United States buys from Canada it could not get elsewhere. That is true. The USA could in theory buy aluminum some other way, or get potash some other way, or have auto parts made domestically, so on and so forth. But that’s not the point; the point is that any alternative costs more.
It’s not THE UNITED STATES buying things from CANADA. It’s American businesses buying things from Canadian businesses. The American business chooses to buy Canadian potash, steel, maple syrup or whatever from the Canadian business because it’s the best option in terms of price, quantity and quality. If forced to find a different supplier, the American business will lose money. That’s an absolute certainty, because if it was not true, they wouold not have been buying Canadian products in the first place.
Can steel be bought elsewhere? Yes, but the American business will do worse.
Can potash be bought elsewhere? Sure. The American business will lose money.
Can nickel be bought elsewhere? Yes, and it’ll cost more. The American business loses money.
Canadians are making the reverse, equally idiotic mistake; you hear them saying “fuck Trump, Canada can sell its stuff to another country!” Sure we can. It will be worse though. Canadian businesses are selling to American businesses because they’re the best customers and we make the most money that way. Can we sell shit to Europe? Asia? Sure, and we won’t make as much money. I know that because if it was just as good an alternative, Canadian businesses would already have been doing that.
You always have the most informative posts.
Why thank you. We aim to please.
I don’t think we are making that “mistake” though. Seems to me, everyone knows we’re going to be worse off than we were pre-Trump. The real question is, will we be better off selling to non-US than we would be trying to sell to the US as we always did, but with the Trump factor constantly looming over us?
We didn’t choose this fight, it was forced upon us. We’re trying to choose the least-bad option that’s available to us, because the old status quo simply isn’t an option any more.
MANY Canadians don’t realize this. Yes, trading with reliable partners is better than trading with insane, untrustworthy ones; the Americans simply cannot be trusted anymore. That’s life. But contrary to what a shocking number of people are saying, this cannot make us better off than we were in 2020.
If it finally forces us to lift interprovincial trade barriers, that will objectively make us better off in and of itself, though. But it would have made is better off before.
I’m with @Horatius I think.
There’s a vast difference between out of the blue saying you don’t need America, and standing up to a bully.
I think the vast majority of Canadians are ready for some economic pain. But, for those who genuinely believe there won’t be any impact, I’m glad to have them in the context of a trade war. It’s good to have people talking up the economy.
Well, the numbers posted here should dissuade anyone who thought we would be unscathed, if they exist:
Canada posted a merchandise trade surplus with the U.S. of $3.6 billion in April, the smallest surplus with the country’s largest trading partner since December 2020. The result came as exports to the U.S. fell 15.7 per cent and imports from the U.S. dropped 10.8 per cent.
Meanwhile, Canada’s trade deficit with countries other than the U.S. was $10.7 billion in April compared with $9 billion in March. Exports to countries other than the U.S. rose 2.9 per cent to $18.3 billion in April, while imports from countries other than the United States gained 8.3 per cent to hit a record $29 billion.
So, pretty much what I was expecting. We are shifting trade to other countries, but not enough to offset the losses in trade with the US. It’s a good start, but will take a lot more time and effort to become better. As I’ve said all along, this is a years-long, probably decades-long project.
There is no possible way trade with other countries could be as good for Canada as a healthy trade relationship with the USA. It simply is not something that will happen. We can make up some of the damage but not all.
The best thing for us is for Trumpism to end.