Trump and protectionism


This is just a short blog that is a reaction to a CBC radio interview this morning with a representative of the Canadian Manufacturers and Exporters Association (CMEA). The interviewer asked the rep from the CMEA how Trump’s presidency would affect Canadian manufacturers. His reply was that Canadian manufacturers are worried, but that Trump’s rhetoric is just that, rhetoric designed to appeal to particular gullible and self-interested audiences, and fact is something else. He said that if the US imposes tariffs on Canadian goods, then Canada should do the same with regard to American goods.

Problem is, there is a basic flaw in this perspective. Canada produces nothing. The US produces nothing. Corporations, sometimes registered in one country or another, produce things and services for sale. People produce things, not countries so why do economists and journalists still insist on using the country as their primary unit of analysis? When are they going to stop saying that Canada’s trade with the US is this and that, rather than focusing on the real situation which is that corporations are dominant and manipulate governments for their own interests? Ironically, many ‘Canadian’ manufacturers have their products produced in China or in other countries that provide them with tax breaks, lax labour and environmental laws, and cheap labour in export processing zones. And just because a corporation has a head office in Toronto and is technically a Canadian corporation that doesn’t mean that its prime motivator is to serve Canada as a country. No, its prime motivator is profit and as long as a Canadian head office serves its interests that’s fine, the moment it doesn’t do that anymore, its ‘loyalty’ will dissolve as quickly as salt in water and it will move its head office elsewhere. More to the point, of course, is that much of ‘Canadian’ manufacturing is controlled from abroad. That led Harold Innis (Google him) to note in the late 1940s that Canada is a country with its brains spread all over the globe.

Economists and journalists need to give their head a shake and stop letting corporate capital and its governmental lackeys lead them around by the nose.

 

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