The United States enjoys a substantial services trade surplus with most other major economies, owing to companies such as Microsoft Corp., Google, Meta Platforms Inc., Amazon.com Inc. and Tesla Inc.
What ultimately influenced U.S. President Donald Trump’s decision last week to delay the tariffs he planned to impose on Canadian imports was arguably Canada’s announcement of targeted retaliatory tariffs on U.S. exports, strategically designed to affect Republican-leaning states the most. But the measures that may be enough to make Mr. Trump pause may not be enough to make him back off permanently.
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Consequently, unless retaliatory measures pose a significant economic threat to the United States, Mr. Trump is likely to proceed with imposing tariffs on trading partners with which the country has large trade deficits, such as China (US$350-billion), Mexico (US$130.6-billion), Canada (US$100-billion) and the European Union (US$200-billion).
The key challenge for Canada – and other U.S. trading partners – is clear: to design a package of retaliatory tariffs and countermeasures that maximally affect U.S. economic interests. One effective strategy to do so is targeting the U.S.’s massive and rapidly growing service trade surplus.
Gas prices. That’s the weak spot. If Americans’ gas pump prices go waaaay up they can and will oust this administration sooner or later. We need to impose absolutely punishing export fees on oil and gas, using the revenues gained to protect any other sectors they slap tariffs on (currently steel and aluminum). The big oil companies can absorb the hit, they make insane profits, no sympathy for them – we should pass emergency regs to prevent them from passing on the expense by laying off workers. If they want to do business in Canada and access our resources, they also need to help defend Canada in our time of need.
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Gas prices. That’s the weak spot. If Americans’ gas pump prices go waaaay up they can and will oust this administration sooner or later. We need to impose absolutely punishing export fees on oil and gas, using the revenues gained to protect any other sectors they slap tariffs on (currently steel and aluminum). The big oil companies can absorb the hit, they make insane profits, no sympathy for them – we should pass emergency regs to prevent them from passing on the expense by laying off workers. If they want to do business in Canada and access our resources, they also need to help defend Canada in our time of need.
I’m an American. Please do this!