Trade wars hurt consumers
June 7, 2018
While Prime Minister Justin Trudeau has made clear, “Americans remain our partners, our allies, our friends”, the recent tariffs on steel and aluminum imposed by the Trump administration has started to sour the Canada-US relationship.
In the final days of May, the American administration, citing national security, effectively launched a trade war with Canada, Mexico and the European Union. As could be anticipated, all parties started to fight back.
Consumers are the losers in a trade war. The higher business costs associated with excessive tariffs are felt at the cash register, which can slow consumer spending. If escalated, fewer sales could mean fewer jobs. All these things can dramatically affect our standard of living here and around the world.
In the 1940s, Europe and North America foraged a military and economic partnership. This successful union was based on the reality that we are stronger together then we are as individual, standalone countries.
Cooperation and coordination between countries has been good for everyone. As a result, we have had peace and an ever-increasing standard of living.
Unfortunately, the American president is systematically undoing decades of good efforts by world leaders.
The US withdrew from the Trans-Pacific Partnership trade agreement and from the Paris Agreement on climate change. Our American neighbour is out of step with the modern-day world.
One of the issues that helped President Trump get elected was his insistence that American jobs were being lost due to unfair global trade; that the world was against the United States.
What he didn’t mention is that these current tariffs will hurt the economy and jobs on both sides of the border.
The United States is currently renegotiating NAFTA with Canada and Mexico. Is the threat of a trade war being used as a bargaining chip against two lesser economic powers?
With the current US administration’s economic protectionist policies, the prosperity we enjoy today shouldn’t be taken for granted.
Individual prosperity is tied to global governance. In a global economy we are all dependent on each other and it is only with good global governance that we can ensure it continues.