International trade and tariff use can be confusing for many, and daunting to understand for most.
But, basically, in most cases, tariffs in today’s global economic climate are a bad decision. Except when they aren’t.
For example, reciprocal tariffs applied by Canada on U.S. goods coming into our country are a smart move by the Canadian government. It shows that when tariffs are placed on our goods and resources flowing into the U.S., we will counter.
However, China placed what they called reciprocal tariffs recently on Canadian canola that heads into their country…to the tune of 100 per cent. It was ostensibly in response to Canadian tariffs placed on Chinese-made EV vehicles. Ottawa said the Chinese government subsidizes the production of such vehicles.
So…tariffs are bad…unless they are good…which can be bad. Confusing right?
We are, or at least were, in a free-trade economy among most democratic countries. The initial Canada-U.S. free trade agreement came to be back in 1989. After some rough patches, everything appeared to be functioning decently.
Add in Mexico with the North American Free Trade Agreement (NAFTA) and three countries enjoyed cross-border commerce.
Granted, some manufacturers shifted productions south to Mexico, as we experienced the loss of Navistar here in Chatham, but overall, the agreement served all countries.
Trump bellyached over the agreement, and forced changes to create CUSMA (the Canada-U.S.-Mexico Agreement) in 2018. Fine.
But when re-elected this fall, and upon taking office in January, Trump criticized the person who negotiated that agreement for the U.S.
Yes, he unknowingly criticized himself.
“Who made these decisions and why?” he said on Truth Social.
That’s what we are dealing with.
Even some U.S. policy makers are realizing tariffs aren’t the best approach. And we’re talking about Republicans, including Nebraska Congressman Don Bacon. In an interview on CNN, he said Congress should take back control of the decision-making on when tariffs should be applied, and not leave it to one person…the president.
Bacon, a fan of free trade, is also a fan of reciprocal tariffs, which is what Canada is doing with his own country.
However, Congress handed tariff powers to the presidency decades ago. It’s just now, with Trump wielding them like economic weapons that can damage the entire global economy, it has come to light that one man really should not have such control.
Until U.S. Congress stands up, the rest of the world will suffer.
