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NAFTA Trade Tensions Explained

 

As trade tensions rise, it is important to understand why there is tension among the NAFTA countries. 

A trade war is an economic dispute between two or more countries. This dispute begins when one country imposes tariffs on the goods and services of another country. The affected country will then often impose countermeasure tariffs on the offending country in retaliation (Protectionism, N.D).

If both countries engage in tit for tat tariff measures, this results in a trade war. Trade disputes are often caused by protectionism. According to Investopia, protectionism refers to government actions and policies that restrict or restrain international trade, often with the intent of protecting local businesses and jobs from foreign competition (Protectionism, N.D).

A country will usually adapt protectionist policies when they feel like they are being treated unfairly and taken advantage of by their trading partners (Protectionism, N.D). The country that feels they have been mistreated in this case is the United States. The US administration believe that they are doing what is best for their country’s financial and economic interests.

While the US administration has good intentions for their country, they are choosing the wrong path to do so. By using punitive measures, they are causing strains on their relationships with their closest trading partners, including Canada, Mexico, the EU, and China. The U.S. administration aims to bring back manufacturing jobs to their country and protect local jobs.

However, in choosing to impose punitive tariffs on so many important goods and resources they are hurting industries in all NAFTA countries, including their own.

It is important to understand how the U.S. tariffs, and countermeasure tariffs imposed by Canada, Mexico, the EU, and China affect major industries and local businesses for all countries involved. Avoiding a trade war is important for industry development and economic security for all involved, including the United States.

Even the U.S. Chamber of Commerce has launched a campaign called “Tariffs are the Wrong Approach”. The Chamber of Commerce business and trade experts believe that the retaliatory tariffs imposed by Canada, and the other countries, will be damaging to the U.S. economy and their businesses (U.S. Chamber of Commerce, N.D).

According to the Chamber of Commerce, half of all U.S. manufacturing jobs depend on exports, one in three acres on American farms is planted for international sale, and 49 out of every 50 U.S. companies that ship to other countries are small businesses that rely on trade (U.S. Chamber of Commerce, N.D).

Evidently, Canada and the U.S. have a very deeply integrated trade relationship. They rely on each other to thrive and prosper. It is because of how deeply connected the industries and businesses are in both of these countries that A.D. Rutherford expanded into the U.S. a few years ago.

As experts in trade compliance, we understand how important trade is to both countries and we are invested in helping both our U.S. and Canadian clients receive simple and effective customs clearance. We have excellent U.S. and Canadian release specialists, that have extension knowledge on current tariffs, and duties, that can help navigate any concerns you may have about importing or exporting goods.

While we hope to see a positive resolution to the current trade disputes soon, we understand that this can take time. Therefore, we ensure that all our customs and trade specialists are highly trained, and we make it a priority to understand any direct or indirect ways that this situation will affect our individual clients, and the large-scale industries we represent.

If you have questions about the current tariff measures, and how it affects your business, you can call 204-633-7207 to speak to one of our Trade Compliance Specialists.

 

 

CITATIONS

https://www.investopedia.com/terms/p/protectionism.asp

https://www.investopedia.com/terms/t/trade-war.asp

https://www.uschamber.com/tariffs?utm_source=Twitter&utm_medium=Organic&utm_campaign=TradeWorksTariffsDont&utm_content=LandingPage

https://www.uschamber.com/faces-of-trade