Notice, though, that we export more in agricultural products to Canada than we receive. What’s more, we export more than five times as much dairy as we import. Then, at the bottom of that chart, services. We export twice as much in services as we import. Ignore that, and suddenly you’ve got a trade deficit, and if your argument is that trade deficits are necessarily bad and signs of being taken advantage of, you’ve suddenly got a problem.<doc-sep>President Trump lashed out at Canadian Prime Minister Justin Trudeau and the country’s trade relationship with the U.S. Sunday accusing Canada of “charging massive Tariffs” to U.S. businesses. In a tweet sent Sunday while en route to Singapore, Trump pointed specifically to Canada’s 270% tariff on dairy the origin of his frustrations with Canada. Trump’s stinging critique — while technically accurate — obscures the larger trade relationship between the two countries. Canada does indeed impose a 270% tariff on dairy that has kept many U.S. dairy products from making their way from the U.S. to Canada. And many other countries rely on similar measures to protect select domestic industries. But trade policy experts say Canada’s trade relationship with the U.S. is key to our domestic economy. Canada is the top U.S. export market, with the country buying more than $340 billion in American goods and services in 2017, according to data from the U.S. Trade Representative. And, overall, the U.S. has an $8.4 billion surplus with Canada. The U.S. has a significant deficit if only goods are included due to the service-sector-centered nature of the U.S. economy. Protective measures like Canada’s dairy tariff are common around the world. The U.S. uses tariffs to protect a variety of industries from a 350% tariff on tobacco to more 160% on shelled peanuts. In other cases, such as sugar, the U.S. has crafted a complex program to protect domestic industry by limiting imports. Officially, the Trump administration used national security grounds to justify the tariffs, but Trump’s clash with Canada may have more to do with a perceived personal slight than the facts of the bilateral relationship. On Twitter, Trump complained that Trudeau had criticized U.S. trade policy — specifically U.S. tariffs on Canadian metals — after the Canadian premier had “acted so meek and mild” in their one-on-one meeting. Trump said that he withdrew the U.S. from the G-7’s joint statement because of that slight. There were other foreign policy considerations as well. Trump advisers described Trudeau’s statements as a slight that threatened to make the U.S. look weak right as the president was leaving for a summit with North Korean dictator Kim Jong Un. “Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique,” Trump wrote. More broadly, Trump officials have repeatedly said that the U.S. has the lowest trade barriers in the world to bolster their argument for imposing tariffs on other countries. “What we have is a country here in the United States, which has the lowest tariffs in the world, lowest non-tariff barriers in the world,” said Peter Navarro, a White House trade adviser, on CNN in March. The U.S. does maintain some of the lowest tariffs in the world — if not the lowest — with an average levy of 2.8% on all goods, according to a ranking from the World Trade Organization. Three spots ahead on the list? Canada. Get our Politics Newsletter. The headlines out of Washington never seem to slow. Subscribe to The D.C. Brief to make sense of what matters most. Please enter a valid email address. * The request timed out and you did not successfully sign up. Please attempt to sign up again. Sign Up Now An unexpected error has occurred with your sign up. Please try again later. Check the box if you do not wish to receive promotional offers via email from TIME. You can unsubscribe at any time. By signing up you are agreeing to our Terms of Service and Privacy Policy . This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply. Thank you! For your security, we've sent a confirmation email to the address you entered. Click the link to confirm your subscription and begin receiving our newsletters. If you don't get the confirmation within 10 minutes, please check your spam folder. Write to Justin Worland at justin.worland@time.com.<doc-sep>Canada-US trade: How Trudeau might hit back against Trump By Jessica Murphy BBC News, Toronto Published 12 June 2018 image copyright Reuters image caption The Canada-US trade relationship has soured Prime Minister Justin Trudeau has vowed Canada won't be "pushed around" by the US on trade. But just how much leverage does Canada - with over 70% of its trade heading south of the border - have against the US? US President Donald Trump has warned that Mr Trudeau's tougher talk on trade will cost Canada "a lot of money". It's the latest jab in a multi-day tirade from the American president against Mr Trudeau and the trade relationship between the two nations. On Tuesday, Canada's Foreign Minister Chrystia Freeland shrugged off the comments, saying the country "expected moments of drama" when it came to matters of trade with the Trump administration. "Canada is prepared for any eventuality" and is ready with "a plan B, C, D and F and maybe to the end of the alphabet" if relations continue to sour, she said. What does a trade dispute with the US mean for Canada? Former Canadian prime minister Pierre Elliott Trudeau famously described the relationship between Canada and the US as that of a mouse to an elephant. Canada will "no matter how friendly and even-tempered the beast, be affected by every twitch and grunt," he said. Simply put, trade with the US matters more to Canada than the other way around. Toronto-based trade lawyer Jesse Goldman says "it's kind of evident that we don't have nearly as much leverage as the Americans do". "The proportionate impact of a bilateral trade war between Canada and the US is much greater on Canada than it would be on the US." media caption Trump: 'It's going to cost Canada a lot of money' Canadian officials like to point out that Canada is the number one customer for 35 US states, and that no other country buys more US-made goods. But trade consultant Adam Taylor notes that for the vast majority of those states, less than 10% of their economic growth is driven by trade with Canada. Canadian provinces are overwhelmingly more dependent on their US trading partners. "When the US tariffs hit us, it's like a huge wave crashing into our shores, verses the little ripple that our tariffs have as an impact on their economy," Mr Taylor says. How has Canada retaliated so far? Canada does still have arrows in its quiver. Following the Trump team's 25% tax on steel and 10% tax on aluminium from the EU, Mexico and Canada, Canada hit back with its own tariffs. Canadian officials announced C$16.6bn ($12.7bn; £9.5bn) in retaliatory measures on goods ranging from iron wire to maple syrup and beer kegs. Mr Taylor says: "It's almost like bullets ricocheting off a tank." It won't have a huge impact on the US economy, he says, but "you've got to find the ways you can have your shots land". image copyright Reuters image caption Canada will slap tariffs on gherkins from US House Speaker Paul Ryan's home state Specific tariff targets include gherkins from Wisconsin - House Speaker Paul Ryan's state - Kentucky bourbon from US Senate Majority Leader Mitch McConnell's state, and orange juice from Florida, a state that voted for Mr Trump in 2016. The hope is that lawmakers from targeted states will in turn pressure the US administration to resolve the issue. "The tariffs are partly economic but they're really intended to send a strong political message," says Mr Goldman. Canada has also launched complaints at the World Trade Organisation, though the resolution process can drag on for years. Long-term, the country has sought to diversify its trade by signing the Comprehensive Economic and Trade Agreement with the EU and joining the Trans Pacific-Partnership trade deal. What are the current trade issues between both countries? There are a handful. Canada, the US and Mexico are in the middle of renegotiating the 1994 North American free Trade Agreement (Nafta). PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy! — Donald J. Trump (@realDonaldTrump) June 9, 2018 The BBC is not responsible for the content of external sites. View original tweet on Twitter Sticking points remain, 10 months into the talks. Dairy is one that raises the ire of the US president, though it accounts for less than 1% of the Canada-US economic relationship. US negotiators have proposed the dismantling of Canada's 50-year-old dairy supply management system entirely over the course of a decade. We’ll always stand up for the hardworking Canadians in our agricultural sector. Today in Ottawa, Minister @L_MacAulay & I dropped by #OttawaDiner to talk with Canada’s dairy, poultry, and egg farmers about what we’re doing to protect their livelihoods. pic.twitter.com/TxAnFm6nSg — Justin Trudeau (@JustinTrudeau) June 12, 2018 The BBC is not responsible for the content of external sites. View original tweet on Twitter The long-running - and undeniably protectionist - scheme offers Canadian farmers a guaranteed price for their milk, and puts high tariffs on dairy goods from abroad. Supply management has the support of all political parties in Canada, where dairy farmers have a powerful voice. On Tuesday, Mr Trudeau met to reassure anxious dairy farmers about threats to the scheme. media caption Dairy wars: Why is Trump threatening Canada over milk? The US president is also insisting on including a Nafta sunset clause - an expiry date that would force partners to regularly renew the accord at regular intervals - into the new deal. That's a deal breaker for Canada, which says it would create too much uncertainty for business. Mr Trump is also keen on striking separate bilateral deals - something Canada has made clear it doesn't want. There are also tariffs on Canadian softwood lumber imports - part of a long-running dispute over the commodity between the two nations. And in June, the US slapped the steel and aluminium levies on key allies including Canada. So what's next? The issue of possible automobile tariffs is looming on the horizon. In May, the US commerce department initiated a Section 232 investigation into auto imports, which will determine whether imports of autos and auto parts into the US threaten national security. image copyright Getty Images image caption The US is eyeing potential tariffs on auto imports Mr Goldman calls the potential impact of those tariffs "devastating". "It will have a profoundly negative effect on the Canadian economy." That's where diplomacy comes in. Canadian officials will be pushing hard for a Canadian exemption on any potential auto and auto parts tariffs. They will also continue to work with allies south of the border who are also worried about a spiralling trade dispute. Mr Goldman says industry is well aware a trade dispute will cause economic pain on both sides of the border, though the US economy can withstand shocks for longer than other nations "Both countries will suffer significantly," he said. Industry and business organisations like the US Chamber of Commerce and the Auto Alliance have been vocal about their concerns over Nafta talks and auto tariffs. Meanwhile, Trudeau government officials and Trump administration officials are still working to try and move Nafta talks forward.<doc-sep>
WASHINGTON—President Donald Trump said Canadians would pay a price for countering the U.S. on trade, while his aides sought to tamp down tensions between the two allies following a dust-up with Canadian Prime Minister Justin Trudeau over the weekend. U.S. administration officials have been hammering the Canadian leader for declaring Saturday at a press conference after meeting with Mr. Trump and other world leaders that Canadians “will not be pushed around” by the U.S. Mr. Trump saw the statement as a slight after concluding what he considered friendly meetings. “I think that Justin probably didn’t know that Air Force One has about 20 televisions, and I see the television,” Mr. Trump told reporters on Tuesday after concluding his summit with North Korean leader Kim Jong Un in Singapore. ”He’s giving a news conference about how he will not be pushed around by the United States. And I say, ‘push him around? We just shook hands.’ It was very friendly.” “That’s going to cost a lot of money for the people of Canada,” Mr. Trump said. Mr. Trump’s latest comments suggested the U.S.-Canada spat could simmer for a while, potentially hanging over discussions to rewrite the North American Free Trade Agreement. The conflict sharpened last week, in the days after the U.S. imposed tariffs on steel and aluminum from Canada and the European Union. Canada responded by imposing retaliatory tariffs on a range of U.S. products, including toilet paper, orange juice and whiskey, effective on July 1—Canada Day. Related White House Trade Official Apologizes for Insulting Trudeau The Toronto-based C.D. Howe Institute said Tuesday its research indicated that among major economies, “Canada suffers the largest negative impact” from the U.S. steel and aluminum tariffs. The think tank said the tariffs would lead to 6,000 job losses in Canada and shave $8 billion Canadian dollars ($6.15 billion) off its annual economic output. Mr. Trump’s top trade adviser Peter Navarro, who on Sunday declared there was “a special place in hell” for world leaders who “stab [Mr. Trump] in the back on the way out the door,” apologized on Tuesday for his remarks, which he acknowledged referred to Mr. Trudeau. “I used language that was inappropriate,” he said at an event of The Wall Street Journal CFO Network. “There’s been a lot of emotional action on all sides,” said Kevin Hassett, chairman of the White House Council of Economic Advisers, at the same event. “What people need to do at this moment is take a step back, take a deep breath.” A spokeswoman for Mr. Trudeau declined to comment on Mr. Navarro’s apology. Early Tuesday, when asked about attacks from the president and his top advisers as he entered a morning cabinet meeting, Mr. Trudeau said he was “focused on defending jobs for Canadians and supporting Canadian workers.” So far, the attacks on Mr. Trudeau from Washington appear to have given the Canadian leader a political lift back home. In a rare show of political unity, the country’s Parliament unanimously endorsed a motion condemning the attacks from Trump aides and the administration’s metals tariffs, which the U.S. justified on national-security grounds. Some of Mr. Trudeau’s bitter political foes have come to Canada’s defense, among them Stephen Harper, the former Conservative prime minister whom Mr. Trudeau defeated in 2015. “I don’t understand the [Trump administration’s] obsession with trade relations over Canada,” Mr. Harper told Fox Business Sunday. “Canada is the single biggest purchaser of U.S. goods and services in the world. This seems to me this is the wrong target.” In the Canadian Parliament Tuesday, Mr. Trudeau thanked lawmakers and Canadians for their support and for “demonstrating that when the moment is right we all stand together firmly to support what we are doing across party lines, across the country. We sent a very clear message as a testament to who we are as Canadians.” The U.S. and Canada disagree on some basic trade issues, including whether the U.S. runs a trade surplus with Canada or a deficit. The U.S. Census Bureau’s tally of goods trade with Canada lists U.S. exports at $282.4 billion and imports from Canada at $300 billion, indicating a deficit of $17.6 billion. Canadian officials prefer to include services trade as well as merchandise. By that measure, which includes the cross-border activities of America’s highly competitive service industries, the U.S. had a small surplus of $2.8 billion in 2017, according to the U.S. Commerce Department. Mr. Trump said Tuesday the U.S. runs a deficit of nearly $100 billion with Canada.