BUSINESS
06/04/2018 10:53 EDT | Updated 06/04/2018 11:21 EDT

Bank Of Montreal Economist Destroys Trump's Argument That Canada Is A Trade Villain

"With a population of less than 37 million, Canada buys more from the U.S. than Japan, Germany and Korea combined."

Fred Lum/Globe and Mail via Canadian Press
Bank of Montreal chief economist Douglas Porter in the lobby of the bank's head office in Toronto, March 19, 2013. In a recent rant, Porter demolished Donald Trump's argument that Canada is a trade villain.

Doug Porter, the chief economist at the Bank of Montreal, is by no means the only expert scratching his head over U.S. President Donald Trump's decision to slap tariffs on steel and aluminium from Canada, Mexico and the EU — a move that has led to retaliation by Canada and the onset of a trade war.

But in a client note published Friday, Porter set aside the usual analysis for a "rant" that apparently he could just not keep in. Even big bank economists need to blow off steam, and in Porter's case, he did so by pretty much demolishing the argument that Canada is the trade villain Trump makes us out to be. (Hyperlink is HuffPost's, not Porter's.)

The President was busy railing about Canada yet again on Friday, tweeting about our "highly restrictive" trade practices. Why, yes, we are only the world's single biggest market for U.S goods and services (with Mexico in a strong second position). With a population of less than 37 million, Canada buys more from the U.S. than Japan, Germany and Korea combined, and almost twice that of China. In addition, bilateral trade between the U.S. and Canada is much more closely balanced than against any other major nation the U.S. deals with. It continues to be baffling beyond words how Canada has ended up being among the Administration's "most wanted" trade villains. All I can say is WTF... Why tariffs for us?

Incidentally, Trump continued his attacks on Canadian trade policy on Monday morning, accusing Canada of unfairly protecting its agricultural sector.

But if Porter is confused by Trump's reasoning, it may be simply because he is expecting something from Donald Trump that the president can't deliver: a consistent and rational approach to trade. Or any other issue.

Earlier on HuffPost Canada:


Some economists have gone a little farther than Porter in taking this into account. Take, for instance, Jeffrey Sachs, the celebrated economist who runs the Earth Institute at Columbia University. In a recent column, Sachs argued that the explanation for Trump's decisions is that he "unwell and unfit to be President."

Trump's so-called policies are not really policies. Trade wars are on, off, on hold, on again, within the span of days. Summits are on, canceled, or maybe on. Foreign companies are sanctioned today and rescued the next. ... Global agreements and rules are ripped to shreds. Trump's garbled syntax and disorganized thoughts are impossible to follow.
By instinct, we strive to make sense of Trump's nonsense, implicitly assuming some hidden strategy. There is none. ... His is a psychopath's trade war.

There you have it, folks — an expert economist on Trump's trade agenda. Is it even worth negotiating with a Trump administration? And if not, what next?

Strange questions for a strange time.

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