My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

Wolf Richter with Jim Goddard on This Week in Money:

Trade agreements are designed to benefit companies, not people – which is part of the problem. We also get into whether gold and silver will remain stuck in the current trading range, and whether there will be a recession under Trump.

The “waterbed effect” of money flows. Read…  How Chinese Investors Inflate Housing Markets in the US, Canada, and Australia, as Governments Try to Stem the Tide

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  32 comments for “My Views on US-Canada Trade, Steel’s Impact on National Security, NAFTA, and the Dollar

  1. raxadian says:

    After how the G7 ended, I gotta ask, has people in the the US ever heard of the
    Bill of Rights of 1689 (England)?

    Because it has become quite clear the US president just has too much power to do whatever it wants.

    • Colin says:

      The President is more a figure head than anything. Americans are still broke under both Presidents. Foreign policy hasn’t changed much other than Iran. Government debt is worse under Trump, but Obama was clearly no Bill Clinton as far as debt goes. In issues like animal rights and resource depletion little has changed. Corporations have more influence than the President does, which is why there generally aren’t many changes from one President to the other. I’d say their power is very limited.

      • mick says:

        You got it Colin, and barely even a figurehead. A puppet is the word I would use. Trump is just putting on a theater production as he carries out his Globalist masters’ agenda, which is to create a smoke screen cover for why the global economy crashed, when in reality it’s due to the massive “Everything bubble” the central bankers created since 2008.

      • Suzie Alcatrez says:

        You should visit Arlington National cemetery and see the results of Presidential power.

        • Ambrose Bierce says:

          I have a question, do they have a national cemetery for war hero’s in Afghanistan? I mean if you want to see the results, hundreds of thousands in Iraq, during the Clinton tenure when US aircraft used the cover of the No Fly Zone to bomb infrastructure. Do you suppose any Vietnamese were exposed to agent orange? I think we need a more holistic standard for presidential abuse.

      • mike says:

        There are some areas where a president has a lot of power. National security is one area, because a congress is not set up to handle national defense. However, the constitution puts many checks on presidents.

        We are lucky that most Democratic and some few Republicans limit his powers. However, the congress sometimes has to be restrained when we have good presidents from corruption and waste by the president.

        Our country has one real problem: corruption. Now, all politicians work for the rich. Even those with the best of intentions cannot get elected unless they get some rich person to fund them or they are so well known that lots of smaller contributors fund them.

        Our corrupt US supreme court enabled this with ridiculous decisions making the rich above the law as to political contributions, which most other countries would call bribes. No Congressionally enacted contribution limits are now possible. The president will appoint people to it that will protect the people that he cares about: the rich.

    • Hongkonger says:

      Afer how the G7 ended, I gotta ask, has you think about who is a foreign spy in US?

    • sierra7 says:

      Too much since 9/11; Patriot Act etc…..leaves lots of wiggle room for the presidents under the rubric of, “national security”. It allows (and has done so) for too much mischief by a president and his cabal of advisors. On the other hand not recognizing that by giving away our basic skills of production just to spite labor and for larger profits does put a notion of giving away the farm and losing “national security” capabilities. That part I find pretty insane. Those powers have to be brought back home for debate by our government and not just let to the executive branch. NAFTA is/was a disaster from the “git-go”…….it was obvious what would happen to American labor and Mexican compesinos. They lost and are still losing big time.

  2. Thomas Molitor says:

    The US constitution places immense power in the hands of a single person. This was done, as Alexander Hamilton put it in Federalist No. 70 to maximize “decision, activity, secrecy, and dispatch” in the executive branch.

    Confronted with opposition from the Anti-Federalists who feared too much power in the hands of a single ambitious politicians, Hamilton attempted to illustrate that they had nothing to fear.

    But who can deny that the presidents of today enjoy powers that the monarchs of old could only dream of? Modern presidents can order a global nuclear attack without any declaration of war. They can launch the world’s more technologically-advanced military at will. They command a vast bureaucratic and law-enforcement apparatus that can destroy the lives of American citizens whether through the DEA, EPA, or countless other federal agencies that wield vast power. Moreover, they enjoy all the same ceremonial trappings of the monarchs of old.

    Hamilton was wrong. Fear we must!

    • Dan Romig says:

      Hamilton was a banker first and foremost. He and Isaac Roosevelt (yes, same family as two later elected Presidents) founded the bank of New York in 1784. The Bank of New York was the first publicly traded stock on the New York Stock Exchange in 1792.

      Hamilton sought control of the United States’ money, much like the Fed has today, and in the words of Mayer Amschel Rothschild, “Give me control of a nation’s money, and I care not who makes the laws.” This quote is attributed to Rothschild in 1790. One year later, Hamilton gave Rothschild control as he engineered the the U.S.’s first central bank, the First Bank of the United States.

      Thomas, you are quite correct in your assessment of runaway Executive power, and I put the shift is this power down to Congress letting President George W Bush take our nation’s military anywhere he and the Neo-cons wanted in the aftermath of 9-11.

      As far as NAFTA goes, I actually like President Trump’s strategy (at least what he’s publicly stated) of having trade agreements that the U S is in be with one nation only. Canada and Mexico are two different countries, why not have two different deals deals?

      • Mike says:

        Unfortunately, some may think that the administration is doing this only to shake loose some benefits to its insiders and will stop once Canada or Mexico “invest” in or loan money to administration insiders. The just filed case against the foundation of the protector of the rich illustrates that they know, correctly, that they are above the law.

        Although “charitable” tax exempt foundations are well known by attorneys to be mostly massive tax fraud scams to avoid paying income and inheritance taxes, clearly administration insiders were not even discreet in their misuse of such foundations’ funds per the state of NY attorney general. If there is a second term, they will pardon all of their party’s crooks, all of the rich that gave them funds, and may try more blatantly to get funds from other countries in exchange for stuff.

    • Gershon says:

      Good points, all, Thomas.

      Also bear in mind that when the Constitution was written, the electorate were basically white male property owners, who were generally considered men of substance who would not vote their emotions or vote themselves benefits someone else would have to pay for. What a marked contrast to today, where one party is the craven adjuncts of the corporations and Wall Street, while the other has a business model based on patronage, graft, and building parasitic entitlements-for-votes dependency blocs and replacing the nuclear family with a beneficent Uncle Sam.

      The ordinary responsible citizen and taxpayer has no advocate or voice in this Republicrat duopoly, although most of them continue to mindlessly vote for the corrupt, crony-capitalist status quo election after election to their own detriment. Baaaaah! Baaaaah!

      • Valuationguy says:

        While most of your statistics are correct, you historical understanding of both the economics and political factors which led to the War between the States (i.e. Civil War) needs more education.

        You are correct that most Southerners didn’t give a hoot about slavery…only the aristocracy did (top 5%)…and that they had most of the political power. The reason that the South (including the 95% who owned no slaves) rose up was the the “freeing” of the slaves by Lincoln undermined the entire banking system in the South (there were NO NATIONAL BANKS in that day so destroying the Southern banks was ADVANTAGEOUS to the Northern banking concerns who like now pull most of the strings) by putting the collateral used to underlying 70% of the Southern banks assets (i.e. slaves) at immediate risk. This collapsed the entire Southern banking system in one fell swoop…wiping out the savings of not only the aristocrats….but also EVERYONE in the South.

        What Lincoln did was effectively devalue the South’s reserve currency and bankrupted them. Everyone in the South had little hope of recovering anything unless they could successfully resist the North’s proclamation.

        A similar situation TODAY would be for the ECB to declare that the Italian central bank can no longer print any Euros and Italy’s sovereign debt could not be used as collateral in any bank regulated by the ECB. This would IMMEDIATELY bankrupt the Italian gov’t, every Italian bank, and wipe out the savings of most all Italians…and cause the Italian people to essentially declare war against the EU leadership in Brussels (accompanied by whatever military force the Italians could bring to bear to reverse the ECB’s pronouncement). Germany and France military forces would then be used to FORCE the Italians to capitulate and they (represented the EU) would proceed to loot Italy….much in the way the North looted the South after the civil war. (Substitute Greece, Spain, etc for Italy…and you get some idea of the POWER the ECB currently holds over the other EU gov’ts…except for the U.K. This is also one leg of current U.S. power over the world as the current accepted reserve currency.)

      • Dan Romig says:

        Interesting to read your comment Valuationguy. It ties in with my comment made on 3 June, 6:24 am (CDT) regarding President Lincoln, banking and fiat currency circa April 1862.

    • nick kelly says:

      It’s a warmed over Brit system circa 1800. The Founders were modifying the system they’d grown up with. In their re-design the renamed monarch is checked and balanced, and is not longer inherited, but one person IS a branch of government.

      Britain has no written constitution and has EVOLVED away from the idea that one person should BE a branch of government. The Prime Minister HEADS a government composed of elected members. He is not himself a branch of government.

      It has also evolved away from an empowered Upper House. All power rests with Parliament, the House of Lords being advisory publicly and the the monarch possibly being advisory privately.

      Many Americans feel that Trump is degrading the Presidency, but if he causes the US to reflect on the Office, he may be doing them a service.

      PS: The late Arthur Schlessinger in ‘The Imperial Presidency’ wrote about
      the unforseen consequences of the Constitution with regard to the Presidency.

      More recently Stephanie Ruhle of MSNBC, wondered: Why do we have this type of government?

      • nick kelly says:

        It is also important not to equate the US Cabinet with its equivalent in the rest of the English speaking world.

        The utter servility of the current Cabinet was too much even for most Americans, when each member took a turn praising Trump as he sat at the head of the table. Pence leading the way with something like ‘it’s humbling to serve you’

        For a Brit or Canadian the nausea was surreal: ‘this can’t be real…its a computer generated spoof’

        In the UK, Canada, OZ, the Cabinet is made of elected members. They can’t be fired like janitors. Of course the PM can remove them from Cabinet but this is not to be done on a whim. He cannot afford to offend Cabinet too far because it, with the other elected members can fire HIM.

        The UK and OZ both joined in the US led invasion of Iraq. In both countries Cabinet members resigned in protest.

        If memory serves, I think Schlessinger suggested having an elected US Cabinet to maybe instill some spine into it.

        • Sarah says:

          Elected by whom???? We already have an uneducated Mobocracy, definitely NOT what the Founders intended.

  3. Paulo says:

    Good morning,

    I won’t get into the politics of it, (honest). :-) Most of you folks have heard it before from me. All I know is that when people negotiate, both sides must get something from the experience; both sides need to win, and it must be apparent for the domestic political arenas. Unilateral decisions and statements of attack lead to dissension and conflict, in this case, a step away from an all out trade war.

    This reminds me of my union agreement negotiating days. Agreements require respectful dialogue, a willingness to compromise, and a sense that both sides gave, received, and benefited as a result. Impasse and threats are expensive and take a long time to fix. If an agreement is one-sided due to a temporary advantage, the agreeement always failed and the company usually did as well. The failure unfolded over time.

    You reap what you sow.

    Hey, no worries….Trade Wars are easy to win.

  4. Winston says:

    The Myth of Global Markets Explains Why The DC UniParty View POTUS Trump As a Risk To Their World Order…

    • Nicko2 says:

      Wow, that blog is seriously wacky. Globalism is here to stay, it’s pointless to engage in conspiracy theories. Indeed, we’re in the post-global era, the circle is complete.

      • d says:

        Globalism is here to stay, but the current rules it runs on.

        That china and its Globalised Vampire Corporate Allies currently game so savagely, ARE NOT.

  5. J.M.Keynes says:

    – “Trade Agreements are beneficial for corporations, not people”.

    Fully agree !!!! Surprise, surprise. Just see how detailed the TPP was supposed to be.
    – Some of these trade agreements also enable corporations to sue governments for financial compensation when the government introduces laws that hurts the profits of companies/multinationals.

  6. bev k says:

    Very very insightful comments here to compliment the article. We the corporation. And the History of the. British east India Party would follow similar themes on power vs the people

  7. OutLookingIn says:

    If Trump is as many say a “puppet” then he is stomping around the dance floor in size 14 boots!
    All the world wants to have the US as a dance partner, only Uncle Sammy keeps stepping on everybody’s feet! Some he just steps on, others he stomps on.
    Its fast getting to the point that no one wants to dance any longer. Keep this up and the US will have an empty dance floor all to itself.

  8. backwardsevolution says:

    Nothing is ever here to stay, not you, and not “globalism”. And circles become undone all the time. Conspiracy theories? Yeah, and you’re a troll.

    Everybody should read the above article that Winston posted.

  9. Anon1970 says:

    The 1965 Auto pact between the US and Canada was definitely designed to benefit the major US car companies that had factories on both sides of the border. US consumer prices remained well below Canadian car prices and Canadian consumers were still subject to import duties if they wanted to import a car from the US. Prior to NAFTA, many consumer prices were much higher in Canada than in the US, even after accounting for the Canadian Federal sales tax that was buried in Canadian retail prices.

    More recently, the retail price gap has narrowed between the two countries, although non-tariff barriers make it difficult for a Canadian consumer to buy a car or alcoholic beverages in the US and bring them back to Canada.

    Trump’s attacks on barriers to the import of eggs and dairy products into Canada are valid but the US also has similar trade restrictions on some products e.g. sugar.

    NAFTA was a good deal for Canadian consumers but was probably off the radar screen for most Americans. The main American trade problem is not really with Canada or Europe, but with China and other low wage countries. Most of my recently acquired possessions come from China, including all of my high tech gadgets. My Brita water filters and shelled hemp seeds come from Canada.

    The American high cost medical system is probably hurting the US trade picture, as it may be encouraging some jobs to be exported abroad.

  10. Bobber says:

    Trump hasn’t presented it well but he is on the right track. Corporations should face tariffs until they share prosperity of globalization with workers.

  11. Alex says:

    There needs to be a balancing currency and that used to be gold. Lets re-peg to gold (go to hell politicians) and trade with countries that do like-wise.

  12. Shawn says:

    The US and Canada already have a Free Trade Agreement (CUSFTA) that predates NAFTA by about 7 years.

  13. WES says:

    I think most people don’t get Trump! What they miss is the fact that he is concerned about what is in the best interests of average Americans. Trump is a very pragmatic person. He is neither right or left. He sees a problem then implements a solution. He also can not be bribed!

    There are leftist folks like low brow “little potato” Trudope and clueless Freeloader who’s leftist idealogy blinds them to the new reality! They don’t get Trump at all! Truedope and Freeloader are still playing trade politics as if the old corrupt practices are still valid! Proof! These two are still busy consulting with their leftist US house and Senate friends who no longer have any leverage!

    Neither of these two fool Canadian leftist liberals have yet figured out that Trump has changed the rules of the game from corrupt to honest! I get that NAFTA is dead! Trudope hasn’t figured out yet that NAFTA is dead! Ordinary Canadian are going to pay a terrible price for Trudope’s and Freeloader’s incredible stupidity!

    Playing the Canadian nationalistic card (stand tuff against Trump, I won’t be pushed around, etc.) won’t work with Trump! Now that these two fools tried to stab Trump in the back at G5 + 2, their just reward will now be to negotiate with killer Wilbor Ross!

    The manner in which Trump has assembled his trade negotiating team (just 5 people) was done on purpose! The purpose was to exclude the crony corporate lobbyists from writing the trade agreements as well as their owned congressional critters!

    The biggest business lobbyists is the US chamber of commerce! They are also the most corrupt! The US chamber of commerce is just a front for a huge criminal organization that spends hundreds of millions if not billions each year buying (bribing) members of Congress!

    Once you understand this, then you can understand why the American middle class has been nearly wiped out over the last 30 years or more! All of the current US grade deals were negotiated for what was best for big crony US corporations! Sending US jobs overseas was the ticket!

    Now maybe you can better understand why both Republicans and Democrats oppose Trump! He is cutting off their swamp money by bypassing all of the corrupt swamp lobbyists so they are suddenly irrelevant! Now you know why all the corrupt US crony corporations are oppose Trump too! He has severed their influence and power over the US government!

    The best way to gauge how effective Trump is, is by how loud the cries are against Trump’s actions! The louder the better!

    Folks need to take Trump very seriously. At first he is nice, but if you don’t negotiate in good faith, then he goes in for the kill!

    Low brow, pink socks, brown shoes, dancing, little potato, peoplekind, feminist, Trudope is a huge international embarrassement to Canadians! All he cares about is making pot legal!

    Trump please feel “free” to embarrasse the hell out of Trudope as often as you like! There are currently no Canadian tariffs on “embarrassing” Trudope!

    But then on the other hand Mr. President, you might not want to interrupt Trudope since he doing such an embarrassing job all by himself!

Comments are closed.