Canada’s Foreign Affairs Minister Chrystia Freeland, the primary NAFTA negotiator, went to Washington DC today for a highly political ‘in-camera’ session with the U.S. Senate Committee on Foreign Relations. [Press briefing video at bottom]
The Chairman of the Foreign Relations Committee is Bob Corker, one of the largest recipients of corporate Wall Street lobbyist money in the senate. Corker is the most staunch voice in opposition to President Trump’s trade reset policy. The ranking democrat is Bob Menendez. Together Corker and Menendez represent two of the most corrupt representatives in congress. These are the allies Chrystia Freeland is counting on.
Freeland’s strategy, on behalf of Prime Minister Justin from Canada, is to leverage internal U.S. political opposition against President Trump’s NAFTA trade reset. However, while Canada and Mexico fight against any new trade agreement that eliminates their economic exploitation model, the Canadian economy is already beginning to contract; and this is happening even before any substantive U.S. trade policies are in place:
(Via CBC) The economy lost 7,500 jobs in May as a drop in full-time employment was only partially offset by an increase in part-time jobs, Statistics Canada said Friday.
The overall drop in the number of jobs came as full-time jobs fell by 31,000, offset in part by a gain of 23,600 part-time positions.
[…] the only reason why the jobless number held steady was a dip in the labour force participation rate, which declined one tick to declined one tick to 65.3 per cent. Only Canadians who are actively looking for a employment are formally counted as unemployed. (more)
In comparison the U.S. job market added over 223,000 jobs in the same month and the unemployment rate dropped to 3.8%. Companies and private industry will not invest in either Canada or Mexico while the looming probability of a U.S. withdrawal from NAFTA remains.
Canada and Mexico are doubling down on their position that current NAFTA loopholes must remain in place allowing them to operate as pass-throughs to the U.S. market for foreign, mostly Asian, goods.
After the fiasco of the G7 summit, the likelihood of any agreement in terms between the U.S., Canada and Mexico is essentially nil. There are increasingly visible U.S. economic indicators that positive U.S. MAGAnomic results are overwhelming the voices of purchased political leaders trying to sell a narrative of doom around President Trump’s tariff proposals and reciprocal trade reset.
One key index is the U.S. stock market growth amid tariff, trade and NAFTA withdrawal discussion. As CTH has discussed the eventual trade outcome now appears baked into the latest market analysis. This is the worst possible timing for Justin and Chrystia to be playing politics with the Canadian economy; but that’s exactly what their strategy appears to be committed to. Amid this U.S. MAGAnomic environment, threats of counter-tariffs by Mexico, Canada and the EU are as useless as feathers in a hurricane.
The only thing missing is the official U.S. announcement withdrawing from NAFTA… But don’t worry, that announcement is coming. Unfortunately for the politically-minded Justin Trudeau and Foreign Minister Chrystia Freeland what they don’t understand is that President Trump doesn’t care about their delicate sensibilities and blame-casting maneuvers. POTUS Trump was elected specifically because he doesn’t apply a political prism in front of economic or national security decisions.
Without radical transformation to remove the loopholes, NAFTA is dead, all three countries know it. The aspect that both Canada and Mexico continue to ignore is that President Trump is in no rush to announce it.
President Trump is in no rush to announce withdrawal because the effects of withdrawal are already well underway. Investors are not going to invest in Canada and Mexico while the uncertainty of a U.S. NAFTA exit looms in the air. The political positioning of the Canadian team is entirely framed around blame casting:
Chrystia from Canada continues pushing the ridiculously obtuse narrative that tariffs to protect the U.S. steel and aluminum industry represent President Trump saying Canadians are a national security threat to the U.S.
Canada doesn’t make much steel and aluminum for two reasons:
#1 because the environmentalists in Canada have killed off their heavy manufacturing industrial base. Which is exactly what President Trump is attempting to ensure doesn’t happen in the United States.
#2 because it’s just easier, and more lucrative, to structure the Canadian economy as a brokerage for the assembly of pre-manufactured Asian products prior to entering the U.S. market via the NAFTA loophole. This economic model was designed by former Canadian and Mexican officials, who were well paid puppets to the plans of multinational corporations and financial interests.
It was a nice gig while it lasted; and both Canada and Mexico have had over 25 years to enjoy the construct. However, President Trump is now resetting the entire agreement to benefit the interests of U.S. workers and Main Street USA.
Worlds Top Ten Steel Producers HERE
CNN analysis on Global Steel Production and Use HERE
World Steel Industry Statistics and Resources HERE
2018 pdf link on World Steel Production HERE
Do you remember the list of items the dynamic duo Justin Trudeau and Chrystia Freeland selected as targets for their counter-tariff position? Check it out here. What do: “felt pens”, “rubber boats”, “orange juice” and “tomato ketchup” have to do with the U.S. steel and aluminum tariffs? See The Answer HERE. It’s all politics. Pure, politics.