I am a Canadian by birth, not by choice. In Canada, as a conservative, the wins are unfortunately much more rare than they should be. Right before the recent federal election, where Canadians were scared into voting Liberal AGAIN, after 10 stunningly bad Liberal years under the idiot Trudeau, we had a snap provincial election in Ontario. It wasn't time for one, but the conservative premier called for one because he was doing well in the polls. Doug Ford won re-election with almost no change in support or representation in parliament from his previous majority provincial government. All in all, a waste of time and money.
But Doug Ford leveraged the same fear of the boogeyman Donald Trump that now prime minister Mark Carney did, to win. Everyone in Canada seemed to know Mark Carney was an empty suit, a total dud, except for senior citizens who immediately panicked and got him re-elected. In Ontario it was a different story. Doug Ford, while seemingly good on some issues, was pretty flat on others. I voted for Doug Ford. My whole family voted for Doug Ford. While it was no deep-seated endorsement of the man, it was the knowledge that a provincial Liberal win, or worse a provincial NDP (the socialist party that is officially and ironically called the New Democratic Party) win would doom the province. Both parties have won in the past and the province has paid the price. We haven't had a conservative leader since the 1990s.
And we still don't.
I voted for this completely imbecilic boob of a man who might as well be a provincial Liberal party leader. I voted for Pierre Poilievre for prime minister. He's a common sense conservative who would have been able to work with president Trump (if only), I expected stupidity and failure from Mark Carney and he did not disappoint. With Doug Ford, this goes deeper. I didn't expect great conservatism from him but he has really betrayed conservatives, the province of Ontario and all of Canada with his absolutely buffoonery. His blustery "I'm tough and I'm going to stand up to Trump" attitude is fake. He's weak and it's obvious. Not only that, it's so painfully misguided. Danielle Smith, the premier of Alberta, is making deals with the president and Alberta is doing a lot better than Ontario these days. She happens to be a real conservative, not for nothing.
It's not just the bluster, it turns out, he can't run a province. That aside, this latest attack on Trump was pointless unless the objective was to derail trade talks.
I may actually abstain from voting in the next provincial election. A few months ago, I wrote to my local member of provincial parliament, commending him on the job he has done but calling for new provincial party leadership. I never heard back. Either he didn't care, was too scared to respond, or doesn't check his emails. Either way, they've lost my support until something changes.
I thought I'd shared this before but I cannot find it. This video is a MUST watch. It explains completely why the U.S. is focused on tariffs. It's not just Trump.
Markets are happy this morning. Out of all the trade talks, this is the one that president Trump should be the most aggressive with. China is the most egregious cheater on trade.
I think Trump is going to quietly back off on this with respect to Canada. The unintended consequences have already started, even though the tariffs haven't fully yet.
A snap election in Canada's most populous province of Ontario results in the status quo.
At the end of a four-week election snap election campaign, votes have been cast and counted resulting in a legislature that is a near carbon copy of the one dissolved at the end of January.
On Jan. 28, Premier Doug Ford triggered an election campaign more than a year ahead of schedule saying he needed a larger mandate from the electorate to inject tens of billions into the economy if U.S. President Donald Trump imposed tariffs.
By the end of the election night on Thursday, however, it was almost like the campaign hadn’t happened. The Progressive Conservatives were elected and leading in 80 seats compared to the 79 they had at dissolution, while the NDP was official opposition with 27 seats compared to 28 they held a month earlier.
The Liberals saw the biggest gains of the night moving from nine seats to 14 — mainly absorbing seats previously held by independents. The Greens kept the two ridings they had at the end of January and independent Bobbi Ann Brady was also re-elected.
The only major upset of the night was Liberal Leader Bonnie Crombie who failed to win a seat in Mississauga, the city where she was mayor for almost a decade. No cabinet ministers were unseated and none of the other party leaders lost.
There is one thing that has changed, Ontario's premier has turned on Trump. Trump has made enemies of a few former friends in and Doug Ford is one of them. American's might say well, that's a fair-weather friend, but it is in response to tariffs being imposed by Trump. I get Trump not being able to stomach Justin Trudeau but in going after Canada instead of just Justin Trudeau, he's throwing the baby out with the bathwater. Canada despises Trudeau as well. Canada is trending heavily conservative and an election is imminent. There will soon be a prime minister who, if things do not escalate, will be a willing and great partner for president Trump who will work hand in hand to benefit both countries.
Not all geopolitical relationships are comprised of zero sum game. One country can only benefit at the expense of another. Most things in life, and certainly in capitalism (not crony capitalism) are in fact not zero sum game situations. The relationship between the U.S. and Canada is most definitely NOT a zero sum game. It is more typified by the idea of "a rising tide lifts all boats." Trade can be mutually beneficial, and it should be so.
As a Canadian who has vociferously supported Trump since 2016, even I am irked. That's not to say that I have stopped supporting him. I remain optimistic about what he will do for America, and as a spillover effect it will help Canada. But I have gone from robustly optimistic to merely cautiously optimistic. I hope Trump's America first does not result in making a bunch of enemies for the United States. America first does not need to result in America only.
Back to optimism; I don't believe it will. Trade can be mutually beneficial, and it should be so. Trump certainly knows this. I believe Trump is playing poker with Canada, with NATO, with Russia and the Ukraine, and even with Gaza. Or more accurately, he's staking out a position from which to start to bargaining. That's brilliant if that's the case, and I do think that IS the case. I'm irked but that is merely due to the short term implications, longer term I'm sure it will pass. Trump I'm sure is thinking long term. I'm also sure that there will be some unintended consequences. Let's hope those are kept to a minimum.
This morning on Breitbart News Daily on SiriusXM, I was listening to senator Joni Earnst talk about the border with Mexico and the issues in Mexico in broader. She was making the point about the flow of drugs such as fentanyl into the United States, but also equally important is the flow of guns from the United States into Mexico particularly the fact that most of those were flowing to the drug cartels.
The United States and Mexico have mutual problems, but equally important is that the two countries have a mutual opportunity. It's readily apparent that Mexico wants to stop the inbound flow of weapons as much as the U.S. wants to stop the inbound flow of drugs. The Mexican government cannot fight an increasingly armed and impervious ring of cartels without a co-operative effort within the United States, and the same is true for America with respect to the drug flow. The inertia that prevents doing something about both of these issues (spawned by Democrats' desire for more illegal voters to pad their vote totals) really mostly benefits the drug cartels at the expense of the people of both countries.
Aside from the obvious notion that a wall would benefit both countries (thank you president Trump for pushing for that), it's less obvious but still true that there is a potential for mutual economic benefit.
The Background
As Peter Zeihan points out, there is a massive onshoring of manufacturing coming to North America in this decade. The below video provides a good summary of his reasoning as to why it's happening.
Specifically here, he expounds on the Texas-Mexico manufacturing landscape:
Because of demographics, this cannot be an entirely American effort. Mexico has the demographics to assist. Canada doesn't really. Mexico is also changing it's tune on dealing with the drug cartels. It has to do so and despite the current relations blip, it will inevitably require increased cooperation between the two countries.
Assuming Peter Zeihan is even only partly right (and I believe he's more than just a little bit right), the economic integration of the United States and Mexico is inevitable. Mutual interest means that co-operation in the short term will aid economic synergy in the medium to longer term.
The Future
With both countries needing to industrialize or re-industrialize rapidly, the need to begin several things in earnest is strong. Economic and security cooperation must not only start right away, they need to start hand in hand. They are interlinked and inseparable; Mexico not be considered a secure place for lower end industrialization if it is overrun with cartels. For its part, the United States, with an emphasis on higher end industrialization and not the best demographic situation, cannot do lower end manufacturing internally, at least not all of it. It's in both nations' best interest to make Mexico safer and the border more secure so that rapid industrialization and mutual beneficial trade can occur. For the United States this also helps significantly (though not completely) neuter China economically. Its a win win win.
How this happens depends on a lot of things. To me the obvious way forward is to not parcel the pieces together and deal with each issue independently.
(1) Work with Mexico to build the wall as a mutually beneficial exercise as part of a broader effort.
Focus on it as part of holistic plan for controlling the flow of drugs, guns and illegal immigrants; it needs to be more than just a wall. It requires proper documentation of all travelers (yes sneaking drugs and people and guns is going to be more than just at proper ports of entry), hence the wall. But it will also require enhanced enforcement and surveillance of delivery systems (e.g. FedEx, postal systems, shipping). This will require additional people (maybe those 86,000 newly hired and armed IRS agents could be appropriated to more serviceable roles). It will require a new and innovative way to allow express trade but still monitor for the illegal transfers.
The slowing of the illegal guns to Mexico as Earnest pointed out this morning will weaken the cartels and help Mexico combat them. The benefit to the United States from that is that weakened cartels will decrease their ability to smuggle drugs into America AND weaken their ability to impinge on future manufacturing zones thus helping trade.
(2) Work with Mexico to develop a high speed trade corridor.
A high speed trade corridor, dedicated to shipments and not human traffic will expedite not only trade but the mutually beneficial trade. I would not expect the exports to flow entirely one way. Firstly as a subcomponent of this, it would b good to establish spheres of specialization among the two countries to enhance trade relations. Peter Zeihan touched on this. Left out however was the idea that American trade goods need to flow into Mexico as well. The balance of payments cannot be one-sided. Replacing a massive trade deficit with China to that of one with Mexico only weakens China; it does not strengthen America except in relative terms with China. Therefore American goods need to flow into Mexico as well.
With manufacturing jobs developing in Mexico and increased Mexican security against the cartels (hopefully in a snowball effect), Mexicans should have more disposable income and thus be able to purchase more American goods. A growing and more stable GDP in Mexico should allow Mexico more tax revenue to purchase military equipment and police force equipment as well, to help fight the cartels while at the same time mitigating the potential trade imbalance.
In conjunction with this, both countries could improve trade (particularly exports) with the soon to be struggling European countries. This would be a further boon to both nations' economies.
Improved domestic economic conditions could also significantly reduce illegal immigration to the United States with more jobs and security becoming available within Mexico. There is a language and cultural advantage for Hispanics to remain in a Hispanic and Spanish-speaking country. Ironically, this may eventually shift the illegal immigration problem to Mexico's southern border.
(3) Plan for the next stage.
It's possible that as this shift occurs, Mexican birth rates inevitably decline as the nation becomes wealthier. This has been the inevitable fate of industrialized nations. To sustain it's economic growth Mexico may be forced to allow increased immigration into its southern border to fill the need. Alternately it could lead to a further southward migration of low tech manufacturing as Mexico itself upgrades to higher tech industrial manufacturing and outsources the lower end of the scale to Central America, while the United States does the same into ultra-high tech. This in effect would expand prosperity ever southward. That of course is only one possible outcome but possible nonetheless.
All of this is hypothetical of course, but the current paradigm offers a massive opportunity for both nations, far greater than allowing the status quo to continue. For its part the United States should push these ideas where it can but not in such a way as to demand specific actions by Mexico. Pointing out the mutual benefit (using the carrot) will yield far more than threats (the stick) ever will.
Hong Kong is no longer recognized as autonomous by America. That will have a dramatic impact on US-China trade, and unfortunately also on the freedoms of the people of Hong Kong. Hopefully China sees that and backs off, but it's not likely. The underpinning of the Chinese communist government is the ability to take advantage of easy trade terms with the rest of the world and cheap Chinese labor to continue it's totalitarian regime.
The only way out for the world, and the people of China, particularly Hong Kong at this moment, is to remove that underpinning that is enabling China. It's tough but necessary. This would have been easier for everyone if it had been done 5, 10 or 15 years ago. Doing business with China, is enabling a repressive and yes brutal, communist regime.
This is good news for president Trump, but let's not get too crazy about his re-election chances. There are some storm clouds on the horizon. Coal jobs, and therefore Pennsylvania, are at risk of steep losses in 2020, despite president Trump's efforts to make the industry more competitive and unfettered. That hurts the president's chances of winning the state again.
Why is American coal having a hard time? It's not because there is not demand anymore as climate activists would have you believe. It's because of increased international competition - primarily from China.
You know, I'm thinking that maybe this would be a good time for president Trump to up his demands on China regarding the trade dispute. With Hong Kong residents in the streets over China trying to tighten the reigns on the free market zone, and China buckling under the tariff situation, this might be the best time to wring more concessions out of the communist regime.
With this in play:
As well as this:
The important thing to remember is that president Trump is tackling an existential issue that no one else prior, and many still now have deliberately ignored. Leaving China free to continue under the status quo will ensure both China's ascendance and America's decline.
I've always contended that the trade deficit is far too simple a metric to view the balance of trade. American companies operating in China (for example) export product back to America, but some significant portion of the profits are actually going to those American companies. Fox Business talked about that, and while in my view it's still to simplistic and does factor in things like the portion of the financial transaction that remains abroad, becomes part of the foreign GDP, is taxed abroad, or even the impact of offshored jobs, it's good a step in the right direction. It helps in showing the real balance of trade.
I've always been a fan of free trade; it's a core conservative principal. So you might wonder why so many people who favor free trade seem to be behind Donald Trump and his seemingly protectionist rhetoric (myself included). The answer is pretty simple. Free Trade and Globalism are not the same thing.
Globalization, as it relates to free market neoliberalism can be defined as follows, although this is hardly the only definition;
Neoliberalism refers primarily to the 20th century resurgence of 19th century ideas associated with laissez-faire economic liberalism. These include extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy.
Therein lies the problem. Each of those policies mentioned have been applied only in part. There is the obvious, often noted imbalance of open markets between countries wherein free access to consumers in America by producers in China, Japan and other nations are not reciprocated fairly by those nations through duties, tariffs, and legal obstruction. But there are other incomplete applications of the free market, quite often as they relate to labor.
Labor (including intellectual labor) is the one asset that any human has that they can offer. In free markets, companies in different countries can offer their goods and services for sale in most any country in the world. For the most part, laborers are not - they are confined to do business in the country of their habitation, most often that is, the country of their birth. Relocation is difficult, challenging and not always a simple matter to do legally. So as a supplier of labor, people do not have the free market to supply the way they do to consume. Even if the rules were simplified to allow anyone access to any country for citizenship (hardly a reasonable idea), people would often lack the economic means to take advantage of the opportunity. While this mat change in time with the advent of virtual workspaces, it is not even the norm in industrial or postindustrial nations let alone underdeveloped regions like sub-Saharan Africa or Bangladesh. So the people are forced to partake of the free market as consumers but produce in a not truly free market as a supplier of labor. That leaves the advantage to the largest companies capable of producing where labor is cheap and selling where demand is strong at higher prices. This does not benefit the suppliers of labor or in the long term the purchasers of those goods and services who increasingly see their jobs offshored to cheaper suppliers. Soon their ability to continue purchasing at those higher prices will fall away as well. They cannot produce at the same prices as cheaper overseas labor and will not have the mobility to sell everything, move to Bangladesh and work in a sweatshop garment factory at impossibly low wages. And why would they want to do so?
The solution in part it would seem is to free up the labor market from artificial barriers. Since the rise of terrorism, there's a practicality question but that does not mean that nothing can be done. Right to Work states have seen job growth while overly union-friendly states have seen the opposite. Minimum wage laws and mandatory benefits attract illegal immigrants to jobs most Americans do not want to do, and also forbid labor suppliers from offering their skills at whatever pay the want. Of course there's an argument to driving wages in America down to the level of those in Bangladesh, but at those wages Americans would become a nation of impoverished workers and no longer be a market for the goods they are manufacturing.
The answer is a happy medium. Laws that encourage business ownership over the oligopoly that the industrialized world seems increasingly headed towards need to strike a balance between benefiting labor and benefiting business. More businesses , small businesses, free from onerous government burdens and red tape, mean more variety. They mean less homogeneity in product and service offerings and a greater chance that someone will succeed and be copied.
Ultimately that's the cycle that needs to be reinvigorated - the growth of small businesses into larger ones as they succeed and the culling of the poor ones. The free market does that very efficiently, better than any government ever has or ever will. I know to many progressives it's scary because it's not managed in the direction that they'd like to see society head. But who are they to dictate where society should head? I know society has taken a lot of turns I think are ludicrous, but I am not trying mandate society be like me. The idea is even more ridiculous than kids wearing jeans with their underwear and/or butts sticking out.
Circling back to Trump, I am still in favor of free trade. But I am not in favor of free trade at the expense of self interest. Free trade in itself is no holy grail - free trade is ultimately built on the notion that self-interest serves everyone better than any other idea could. Free trade is, or should be, built on the notion that a rising tide raises all boats. So free trade pursued for free trade itself, or for the benefit of a few at the expense of many is a twisted revision of free trade that I cannot support. That is what globalism has become. It certainly has nothing to do with classic neo-liberalism. Donald Trump, riding a wave of frustrated and angry populism is at least arguing that the status quo does not work for far more people than it does work for and should be blown up and reset, more intelligently. Better deals are not a bad thing. Smarter laws are not a bad thing. Crippling red tape cannot continue either. This is why Donald Trump voices the frustration of so many people, not because he says terrible things about Rosie O'Donnell. That can be forgiven because it makes clear he speaks his mind, and on the economy, he's think what millions of other people are thinking too. That's why he might very well win this thing.
I believe over the next 100 years or so, wages globally will normalize and companies won't need to offshore jobs for competitive advantage (or competitive necessity). At that point true free trade will exist. That will require years of intelligently negotiated trade deals, not half-thought-through deals like the TPP.
Clearly we're not there yet and countries like China continue to game the system. Not dealing with that only works to the detriment the United States.
Hence the popular support for Donald Trump's position on getting fair trade deals.
The Pope disagrees with Trump - no damage. China is worried about Trump causing a trade war - no damage. Vincente Fox, former leader of Mexico is angry about Trump winning. My prediction - no damage.
In fact these people are helping Trump. He promises to give America backbone in its dealings with foreign nations. These leaders being upset proves his point. That doesn't make Trump the right candidate. But it does help make his case.
Remember back in 2010 when China joined Russia in dropping the U.S. dollar as the medium of bi-lateral trade? And again in 2014 when the two nations teamed up to kill the dollar? Remember China hacking U.S. government and corporate secrets, pretty much always. China has a pretty lengthy history of aggressive, bad neighbor behavior. And now their stock market is in deep trouble. It's in free fall and could be at the start of a crash. True or not, make no mistake, there's underlying trouble.
Never let a crisis go to waste, right?
Now is the time to play hardball with China. It's the perfect time to do something to prevent job offshoring, to remove Most Favored Nation status for China and to repatriate jobs to America. It's an opportunity to not just knuckle under to China's belligerent rise as a world power. Strike them economically when they cannot afford it. Why not? They've been trying to do it to America for years.
In an open letter to president Obama, Donald Trump has lambasted the president on his weakness and the fact that China knows it. Trump has been fixated (and not undeservedly so) on the trade and relation problems with China going back some time but he seems to find the situation under Obama, particularly egregious.
The Chinese government increased trade tensions with the Obama administration Wednesday evening by unexpectedly imposing anti-dumping and anti-subsidy tariffs on imports of support utility vehicles and midsize and large cars from the United States.”
This new and unfair tariff, which amounts to a 22 percent increase in the import price, evoked the weakest response imaginable from Carol Guthrie, a spokesperson for the Office of the United States Trade Representative. Her response was, “We are very disappointed in this action by China…. and will be discussing this latest action with both our stakeholders and Congress to determine the best course going forward.” For the past year, I have been clamoring to do exactly to China what they are now doing to us. When are you going to take a stand and stop permitting China to destroy our great nation? You should immediately issue a response to the President of China declaring that a 25 percent tax on every product China produces and imports into the United States will be immediately imposed.
How much more money are you willing to permit China to take from our economy? Isn’t 370 billion dollars a year enough? It’s time to wake up and realize that China is committing economic terrorism against the United States. You are single handedly allowing numerous countries to destroy our great nation and everything that we stand for.
He's completely right about the problem, and Obama's inaction on China. Let's hope he doesn't run on it though. He would end up ensuring that Obama would be around for four more years to allow more damage to be done.
