By the way, it just occurred to me that most Americans here might not really "get" the US Canada trade war that's going on right now. To be frank, your media isn't very good at explaining this kind of situation to you, so maybe I can shed some light on what's really happening.
The core of this whole problem is that the US does not honour its international agreements. Period. And yes, I do mean offense when I say this. The US, as a country, is a bloodthirsty liar. A terrible trading partner and a worse ally. You can't trust the US to ever do anything it says it's going to do.
Now, US people aren't all like that. I like you folks as people, and I know none of you have any real say about what your government does. But your country, as a global actor, as represented by your government and businesses, is hot garbage. A whole lotta people hate the US, and I'm sorry if this is news to you, but it's not because they're jealous of your freedom. It's because the US acts in bad faith quite literally 100% of the time.
This US Canada trade war is a perfect example of US belligerence playing out in real life.
There are (currently) two big issues in this dispute.
The first is dairy. The short version that you've been told is that Canada applies a very high tariff to dairy product imports, and US producers don't want to pay them.
Here's the true version that you haven't been told. The US dairy industry is crumbling apart right now due to a capitalist crisis (massive overproduction). The US wants access to the Canadian market so they can dump excess inventory and maybe limp along for another year before the entire US dairy industry collapses.
Of course, the important point here is that US producers don't have access to the Canadian market. There are three reasons for this.
First, there is no US-Canada dairy free trade agreement, so Canada can legally do whatever they want for dairy and the US has no statutory right to retaliate against Canada for it.
Second, Canadian dairy tariffs and supply chain management exist to prevent exactly the kind of situation that has happened to the US dairy industry. Our government regulates the dairy industry to prevent an oversupply crisis. Allowing the US free access to our dairy market wouldn't fix the US dairy crisis, it would only expand the crisis.
Third, the US illegally subsidizes its dairy industry. If there were a US Canada dairy free trade agreement, Canada would have the right to apply a massive punitive tariff anyway.
Okay, so that's the dairy situation. The US ****ed itself up and wants to sweep the problem under its closest allies.
The second core issue is softwood lumber. The short version you've been told is that Canada illegally subsidizes its lumber industry. If you've heard more, it was probably something about government land that got glossed over.
Here's the true version. Both Canada and the US sell access to national land for logging. Both Canada and the US charge market rates for land. Canada has 1/10th the US population and probably like 100x the trees. We have fewer producers bidding competitively over a vastly larger supply, which essentially means Canadians are better at producing lumber than the US, something which shouldn't really surprise anybody. Except the US government, of course, which insists that our competitive advantage can only possibly exist due to government subsidization.
This comes up every 10 years or so. And every 10 years, this is what happens:
- The US says Canada is illegally subsidizing its softwood lumber industry, and slaps a tariff on Canadian lumber imports.
- Canada sues the US for an illegal tariff.
- The WTO finds no evidence that Canada is subsidizing its industry and rules in Canada's favor.
- The US ignores the ruling (i.e. ignores NAFTA) and imposes a tariff or quota anyway.
The same thing is going to happen this time, too, unless (God willing) Trump blows a gasket and we get to forget this whole "treaty with the US" thing ever happened. Because this is the lesson the world has learned: a treaty with the US is pointless. It's not worth the paper it's written on. When it benefits the US, free trade will happen, whether you have a treaty or not. But if you do have a treaty with the US, it is followed at the US's convenience only, and to be ignored in all other cases.
So you might as well not even bother. At least if you don't have a free trade agreement, its harder for US corporations to sue you when you tell them to obey your laws.