I have not been following the Canada thing but generally have been learning more about trade and Trump's approach seems less chaotic and random than is talked about.
US's largest trading partner is Mexico. The biggest thing we import from them is automobiles & auto-parts and the second largest is computers and electronics.
We all understand the benefits of trade is meant to bring in - such as goods manufactured by countries whose prowess making those goods better to the benefit of all.
So it's interesting to look at this example. Automobiles - does Mexico have a prowess in that segment? A tell tale sign of "no" is that Mexico has no domestic auto brand. In other words 100% of auto exports from Mexico is actually US automaker production that shifted to Mexico is persuit of cheaper labor, weaker unions, and less environmental and other regulations that gets in the way of manufacturing.
I am focusing on this example because it's the largest segment of our trade with our largest partner - literally the biggest thing the US imports is our own shifted auto production.
The second largest segment is also interesting. Mexico isn't known for its computer and electronics brands either. What's going on? Turns out that Asian manufacturers (eg Lenovo) do the very final assembly in Mexico but all the components come from Asia. It's not actually "efficient" to do this except that when assembly happens in Mexico those components magically become a "north American good" by NAFTA terms and can go all over US and Canada with no duties or tarrifs or restrictions.
So the second largest segment with our largest trading partner is Asian manufacturers exploiting a NAFTA loophole.
As an American who inherently is pro trade (I am an MBA...) this is revealing about the obvious disadvantages of how trade has been configured. The auto example is literally NAFTA being used to bypass American labor laws and environmental regulations while maintaining access to our market by American companies themselves. The electronics example is Asian companies bypassing the long standing trade conditions by whitewashing Asian products as north American goods.
It is obvious that trade pre-Trump was not set up in a smart way from American perspective. The auto is a great example: the government simultaneously made it very hard and expensive to manufacture at home, and very easy to shift to Mexico.
I don't know the details with Canada as much but I no longer assume things were working great and US is meddling lens by default.
Canada doesn't have domestic auto companies, yet we manufacture auto parts and assemble automobiles destined for the US. From my understanding, this was negotiated as part of the trade deals. There is no good reason for them to desire cheap Canadian labour, weak Canadian unions, or weak Canadian environmental regulations. For one thing, Canada is known for none of those things. On the other hand, Canada had a lot of things the US wanted: access to the Canadian market and access to Canadian resources. I wouldn't be surprised if something similar happened when trade deals were manufactured with Mexico. While Mexico isn't on the same economic tier as the US, it isn't a third world nation that people like to paint it as.
As for companies looking for loopholes, it may be fun to blame it on Asian manufacturers. I would suggest that Americans take a good long look in the mirror. US companies were outsourcing assembly to Mexico long before Mexico came under the NAFTA umbrella. Quite often, at least with electronics, those US companies were using parts manufactured in Asia. Should Asian companies hold themselves back, should they avoid using the same practices as their American counterparts, just because it isn't fair to Americans? If anything, they have less reason to because Asian countries are responsible to their own citizens, not to Americans.
Your comment sounds like you are arguing with me but you are actually agreeing.
I am not "Blaming Mexico" - I am pointing out that the policy as I described it made no sense from American perspective. You are right that the American manufacturs did assembly in Mexico (form Asian components) before as well but it's the same point - an essential Asian good masquerading and benefiting from being a "north American one"
I think it is a bit more complex than that, since how Asian those goods were varied a lot across time.
Early on, it may have included semiconductors designed in the US, with manufacturing outsourced to Asia. That outsourcing may have been to a facility owned by an American company or to a foreign owned company. Then the semiconductors may have been shipped to Mexico where another company was manufacturing consumer products. Under such circumstances, can such a product be described as essentially Asian?
Of course, things changed. Asian companies took more control over product development and manufacturing. When they ran into labour and regulation making manufacturing in their own country more expensive, perhaps due to tariffs or perhaps due to their own citizens demanding better, they used the same playbook.
You're right in that it made no sense from an American perspective, but that isn't because it suddenly became cheaper to manufacture in the US. It did not make sense because they lost control of the playbook, because others could do it better.
On the whole, I agree with your point about trade being used to bypass labour laws and environmental regulations. I'll be more blunt with how I phrase it: the practice is exploitative and causes more harm than good. That said, the current American response appears to be driven by the demand for trade on their terms exclusively. Never mind that other countries may want something in exchange for their resources.
> I have not been following the Canada thing but generally have been learning more about trade and Trump's approach seems less chaotic and random than is talked about.
Trump imposed tariffs on an island populated only by penguins.
https://www.bbc.com/news/articles/cly8xlj0485o
But this was the neoliberal globalist agenda for the past thirty years. Lower trade barriers, export manufacturing to low wage workers with poorer conditions. The result is lower automobile costs for American consumers at the expense of blue collar jobs evaporating.
There's a gap there. The reason automaking is expensive in the US is labor and environmental laws whose intent is to keep Americans employed at high wage and to keep the planet green.
So on one hand it's government regulation that makes us not compative. On the other hand the government doesn't ensure this happens by making it easy to bypass via mexico. So the end result is the environmental protections don't kick in and Americans don't make the high (or any) wages.
So we either drop those laws and open up trade, or we keep those laws and make it harder to bypass. Those are the two non-dumb options.