The Trump-Canadian War

It started as bartering. Archaeologists have uncovered undeniable evidence that hunter-gatherer groups met up to trade goods. Hunter-gatherers and nomadic groups that still exist today continue to engage in this practice.

Then cities sprang up, ships and writing was invented, and long distance trading commenced. Partnerships and allies formed. Civilizations became prosperous. International trade strengthens the economy for everyone involved.

A good example is our steel and cars trade with Canada. We import steel from Canada. We use it to make cars. Canada then buys the cars from us.

Trump said we don’t need Canada’s steel because we have our own. Unfortunately, that’s not true.

The primary ingredient in making steel is iron ore. We once had a booming steel industry; we had iron ore mines and steel mills all over the place. Then our iron reserves began running out. We are reduced to mining a low-grade iron ore called taconite.

When we had plenty of high-grade iron ore, taconite was discarded as a waste rock. But when the good stuff was used up, we had no choice but to figure out how to use taconite. After many years of hard work, scientists and engineers developed a method to process taconite into usable iron.

We now have a dwindling domestic iron industry, with most of the remaining mines located in Michigan and Minnesota.

On the other hand, Canada has some of the highest-grade iron ore in the world and they are right next door. We get high grade steel from them. We use it to make cars and other goods. Canada then buys those cars and goods from us. It’s a win-win situation. At least it was win-win until Trump came back in the picture.

Nevermind Trump’s unhinged rantings. How about some truth for a change?

The stats for December haven’t been released yet, but for the eleven months covering January – November 2024, Canada imported a little over $322B in goods from the US, and the US imported a little over $377B in goods from Canada. That’s a $55B deficit for the US.

But wait. How about looking at this from a different angle?

The US has 335 million people and imported $377B in goods from Canada. That works out to $1127 per person.

Canada has 40 million people and imported $322B in goods from the US. That works out to $8,056 per person. That Canadian stat sounds crazy, but get your calculator out and do the math yourself.

Why so much for a Canadian citizen? Well, maybe much of the reason is Canada buys most of their cars from the United States. They also buy a large amount of refined oil from the United States.

I could write an entire post about Canada and the United States trading oil and gasoline back and forth, but I’ll be as brief as possible. Crude oil comes in many different grades. A given refinery is configured to process one type of oil. By working together as partners, Canada and the US have worked out the most cost-effective way to produce refined oils, like gasoline, for domestic usage and for each other.

The greatest portion of Canadian imports from the US are cars and other vehicles along with parts and accessories for those vehicles, refined petroleum, crude petroleum and natural gas. Is that $8,056 per person beginning to make sense now? By the way, “vehicles” includes those that cost hundreds of thousands of dollars each, like construction vehicles, farm tractors and harvesters, etc. etc.

Other Canadian imports include fruits and vegetables, grains, home goods, clothing, pet food, medical equipment and so much more.

But now we’re experiencing a paradigm shift. Due to Trump’s actions, Canada and Mexico are seeking out new trade partners so they can drop us. This will be a big blow to our economy, and it will take years to recover.

And to think, Trump got elected because he was supposed to Make America Affordable Again.