Tariffs and Booing National Anthems – No One Wins

For a so-called business guru, Donald Trump needs to listen to economic experts specializing in international trade when it comes to tariffs.  They will undoubtedly tell the President that tariffs are a lose-lose scenario.  The other country will obviously retaliate in kind making your own exports more expensive. This will only lead to reduced exports and potentially layoffs at home.  Despite what the MAGA followers say, the end use consumer pays for the tariff, not governments.  This makes imported goods more expensive.  Tariffs are inflationary, lead to higher unemployment and eventually a major recession.

Canada is the United States’ number one trading partner.  The two economies are incredibly intertwined.  The Canada-US Free Trade agreement started with the Reagan administration.  It expanded with Mexico making it NAFTA under Bush 41.  It remained intact with eight years of Clinton, Bush Jr., and Obama.  Both Republican and Democratic administrations saw prosperity with free trade for over 30 years.  Why even consider a tariff?    It is a misguided policy that hurts both countries economically and leads to friction and unfriendly actions between countries that have been great allies for decades.

That tension between the two countries was clearly seen this past week at the championship game of the Four Nations hockey tournament in Boston.  Americans were booing the Canadian national anthem.  This was in retaliation for Canadians booing the American anthem at the round robin game in Montreal the week before.   Hockey players have nothing to do with improving economic conditions of its citizens.  They will tell you they are just playing a game they love, and they are not political, and that is true.  However, fans are not.  Fans are reacting to a misguided policy that will hurt their country, and it is no longer a game, but a sense of national pride. 

When international tensions rise, the question becomes, what’s next?  Vandalism? Sabotage? Or God forbid, violence?  Am I overreacting?  Maybe, maybe not, but World War One started when one man was assassinated, and another country’s sovereignty was threated.  Tariffs and booing anthems serve no purpose.  They are a lose-lose proposition for everyone.  They lead to hard feelings and can only lead to escalation.  Throwing fuel on the fire only makes the matter worse so we must nip this in the bud.  There’s an old Chinese proverb that goes something like this.  When seeking revenge, be prepared to dig two graves.  One for your enemy and one for yourself.  Let’s end this tariff nonsense and go back to the way it was with peace, prosperity and respecting each other’s national anthem.

Cheers,

 Al

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