The reason that Canada and Mexico are toeing the line is the persistent fact that while these tariffs will be very painful for the US, they will be fatal to Canada and Mexico.
If they go on long enough, the US will shift gears and start producing the products again, while the neighbor's currency devalues to the point where their retaliatory tariffs don't increase the pre-trade-war prices much.
I think it's possible that this has little to do with immigration and Warren D Rugs.
It's a message to China and the EU.
The US has not really retaliated against unfair trade practices for a very long time.
The EU is one of the most protectionist markets on the planet and they have managed to convince lots of people they aren't. Just look at some of the details of Brexit to see how protectionist they are.
A self sufficient United States kills all of their leverage, and they know it.
Even if the US doesn't replace Mexican and Canadian products with internally produced ones, it isn't like there arent LOTS of other countries not subject to tarrifs which have cheap labor (and note that Canadian labor is NOT cheap) where production can be moved. There's a lot furher south of the border from Mexico that's hungry, and other countries in SE Asia besides China too. And a lot of the product we import from Canada and Mexico is food which could be grown elsewhere too. It's not like tomatos and avacados and limes won't grow in Guatemala or El Salvador or Honduras, etc.
ReplyDeleteWho knows, Russia might even decide to play nice and get their embargoes lifted some day.
Even if we're too cheap or lazy to become self sufficient those Canada and Mexico can't rely on mere proximity, they actually have to be competitive.
-swj
They should be coming to the U.S. with hat in hand, asking us to allow them access to our markets and to allow our products to be sold there.
ReplyDeleteNo more weak U.S. held in thrall to Globalist Elites. America first!