President Trump has once again put the American worker first, sending a direct message to Canadian Prime Minister Justin Trudeau and the 300% overcharge on American dairy farmers and agriculture in a fiery tweet storm that is part of the President's plan to renegotiate NAFTA
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Prime Minister Trudeau is being so indignant, bringing up the relationship that the U.S. and Canada had over the many years and all sorts of other things…but he doesn’t bring up the fact that they charge us up to 300% on dairy — hurting our Farmers, killing our Agriculture!</p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1004871827406061573?ref_src=twsrc%5Etfw">June 7, 2018</a></blockquote>
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President Trump is spot on here, with Canada overcharging the United States of America using tariffs, but let's do a full breakdown of exactly what Trump meant and why he's doing this.
It's common knowledge in the farming world that Canada continues a high tariff wall on most dairy products, which hurts American farmers.
For milk alone, this sits at 270 to 300 percent, exactly as President Trump described.
What this does is stop almost all imports from the United States, and elsewhere, from ever reaching Canadian consumers, and it at the same time raises the prices of Milk and other dairy products in Canada, bolstering the wallets of Canadians.
If Canada can pretend to be this “globalist savior,” all while pushing “Canada First” policies for their farmers, why shouldn't the United States of America do the same? This tariff wall has always been an argument for renegotiating NAFTA, the horrible North American Free Trade Agreement that has hurt American entrepreneurs over the last several decades.
A couple of years ago, Canadian dairy farmers and producers alike joined together to close the breach in the tariff wall with what they called a new "ingredients strategy."
They were able to persuade government regulators to create a manufactured class of industrial milk at far lower prices, to be used as an incentivization for dairies to produce specific protein substances inside of Canada, using Canadian milk.
After this happened, imports from the United States of America fell in both 2016 and 2017, and are still on the decline in mid-2018.
In Canada, there's something called “supply management,” which is an organization that governs virtually every aspect of the production of chicken, eggs, and even milk; in which a tariff wall is used to block imports from other nations, strict quotas are used to limit the amount of production from farmers, and even having fixed prices paid to those who produce the products in the first place.
Think “socialism for farms,” and that's what's happening in Canada and has been in place since the 1970s. It was supposed to “stabilize the incomes” of Canadian farmers, but because of the increase in globalized trading, several of Canada's trade partners including the United States, Europe, Australia and New Zealand have all filed complaints with the World Trade Organization.
The World Trade Organization since ruled that those high prices which are given to Canadian farmers are to be considered as subsidies, making exports even more difficult, and meaning that Canadian consumers are now paying consistently higher retail prices for dairy, chicken, and eggs.
Trump wants American farmers to have a fair shake and wants to essentially stop the socialized failures of Canada from imposing on American businesses and farms.
That's exactly what he's going to do, too, in restructuring NAFTA by using this as a bargaining chip. It's called <i>”The Art of the Deal,”</i> and it's something Donald Trump not only coined but has mastered.
At the beginning of the term, the Trump administration argued it would seek to reduce various non-tariff barriers to agricultural trade with Canada, including rules limiting imports and "unjustified trade restrictions" on new technologies.
This was Trump's way of calling out Canada's ingredients-pricing scheme for what it is, an illicit ploy that benefits nobody outside of Canada while hurting America unfairly.
Trump even sent a letter to Congress about this that said the Administration hoped to "eliminate all export subsidies on agricultural products," which is essentially a challenge to the pricing system of Canada's dairy, and now he's following through on it as it appears NAFTA negotiations are underway.
Experts say in order to prevent Trump from simply canning NAFTA, that this will force Canada to trade away their supply management system for free trade in softwood lumber, although that is likely what Trump anticipated, and will surely have an additional counter offer.
All we can say here is that it's wise to let Trump be Trump when negotiating because there is no other politician in American history with the uncanny skills that he has.
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