With the rise in trade tensions between China and the United States, Canada was not yet out of the forest, letting some people wonder whether the trade war was inevitable.
On Monday, the United States and Canada have agreed to stop tariffs for 30 days to negotiate new security measures on the border, but the economic confrontation between China and the United States continues.
While temporary admiration brings a moment of relief to the Canadians, the uncertainty remains, which leaves many Canadians wondering whether the trade war has only been late.
“President Trump’s tariff of 25 percent is a complete betrayal of the historical tie between our countries. David Eibi, Prime Minister of Colombia, said on Saturday in response to the threat of Trump’s tariff, it is a declaration of economic war against a reliable and friendly ally.
Robert Husi, a professor of international law at New York University, explained, while commercial conflicts are not a new thing.
When the United States announced the definitions in Canada on Saturday, Canada responded in its own plan, it was clear that the two countries were “undoubtedly” in a commercial war.
Here is what to know about commercial wars.
Husi said that the trade war is an economic conflict that erupts when the two countries are involved in a session of reprisals, such as definitions, which leads to the escalation of restrictions that disrupt the markets, increase prices and pressure international relations.
“By imposing retaliatory measures, this is what makes it a really war,” he said. “This means that Trump puts a customs tariff and other countries such as Canada that interacts by imposing a customs tariff on the United States, or any other form of punitive commercial measures.”
He said in general, it is a form of protectionism.
“It is a matter of whether revenge is a logical strategy to protect an individual’s economy,” Hossi said.
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“The problem in the trade war, the country that has set the original protection measures can respond to revenge through revenge. This creates a worse situation.”
Kevin Haysit, director of the National Economic Council of the White House, said on Monday that it is misleading describing the confrontation as a trade war despite the planned revenge and the risk of escalation.
“Read the executive order as President Trump was 100 % clear, that this is not a trade war,” Haysit said in the Associated Press report. “This is a drug war.”
However, the executive orders also included a formulation that determines the definitions that could increase if Canada intervenes in response.
The difference between commercial “conflict” and “war”
Commercial conflicts occur frequently, and are usually temporary differences between countries on commercial policies, which usually include smaller tariffs or conflicts that can be resolved at a relative speed.
“You can get these conflicts that have a person from a dream, but they are inherently limited to a specific product,” said Howse.
For example, he referred to the trade conflict between China and the United States on solar panels.
The United States and China are currently participating in a commercial dispute over solar panels. The United States initially imposed a tariff on Chinese solar panels and cells, referring to unfair commercial practices and concerns about market dominance in China. China has averaged by definitions of American goods.
In contrast, Howse said that the trade war is a more intense conflict as countries impose the escalation of definitions and commercial barriers on each other in revenge, and often lead to major economic turmoil.
History is full of examples of commercial wars.
One of the most famous is SMOOOT-HWLEY tariff law This began in 1930. This was an American law that raised the American definitions of a group of overwhelming products exported to the United States.
It was widely believed that the definitions had worsened the recession during the great recession.
I witnessed the sixties ChickenA commercial dispute between the United States and Europe primarily on poultry. The conflict arose when the United States accused Europe of unfair definitions of US chicken exports, prompting the United States to take revenge on the tariffs on European commodities such as French wine and German motorcycles.
Then there was a trade war in the eighties between the United States and Japan.
This trade war happened Because of the large trade balance, as Japan dominates industries such as cars and electronics. In response, the United States imposed definitions and pressure on Japan to open its markets, and create 1985 Plaza AccordIt aims to reduce the American trade deficit.
Howse pointed out that when a state takes action against another tariff, politicians in the affected country may gain public support by reverse the public’s anger or dissatisfaction.
For Canada, Howse said that this may be a political gain for liberals.
Revenge appears to such an instinctive response, similar to the school yard reaction where someone returns when he sees injustice.
“Perhaps this is the last resort of the liberal government. They fell greatly in the polls.”
“This is almost like a political gift … to respond with national feelings and do this in a very strong way, even if in the end it will not help the Canadian economy much.”
As for Trump’s benefit from the trade war, Housi said he was somewhat confusing.
There is a few evidence that the drug and fentanel crisis is primarily a problem through the Canadian border.
He said that with regard to the defects of the trade war, it is clear that consumers will harm.
“However, the United States can tolerate a lot of revenge, because it does not depend largely on the export of goods,” he said. The question is whether Canada can tolerate the ongoing trade war, given its great dependency on exports. I doubt that it will go well for Canada. “
– With files from Global News’ Uday Rana
