Mike’s Musings: Let’s not spoil special relationship with Canada

President Trump likes to say his favorite word is “tariff.” He hopes to use the word to force corporations to locate in the United States, instead of other countries where they have tax and trade advantages. More corporations mean more factories which in turn, Trump believes, will provide more jobs, cut the cost of consumer goods, thus put more money in the pockets of taxpayers.
I can’t argue with increased tariffs being placed on China, India and the like, where their tariffs on American goods, pretty much prohibit us from selling a lot of goods in those countries. Ditto Europe where big ticket items like BMW, Audi, Mercedes Benz etc are sold by the millions here, but nary a GM or Ford product can be found on European roads because of high tariffs.
However, in the case of our good neighbors and allies, Canada and Mexico, I am not in favor of imposing the suggested 25 or 50 percent tariffs Trump is threatening to impose. For decades, in the case of Canada, the U.S. has maintained a deeply integrated economic relationship, one that has benefited consumers in both nations.
Part of that integration has been products produced by the thousands of miles of forests in Canada. Much of our lumber comes from those forests. Additionally, newsprint which is used by every newspaper printed in the U.S. comes from paper mills that are only located in Canada.
In the case of our newspapers, printing is close to 25% of our total costs. It is our biggest expense item- more than payroll. Raw materials, paper and ink, make up approximately 60% of all printing costs. A 25 or 50 percent tariff would add another cost to newspapers, particularly weekly, that many won’t be able to absorb.
Paul Deegan, CEO of News Media, says it best. “A historic 140-year-old newspaper in New York recently closed, and others are struggling with increased expenses for essential materials like ink, plates and paper. These issues might not always make front-page headlines, but the are having a real impact on the viability of the newspaper industry.”
He added, “These trade barriers are not only making it harder for newspapers to survive, but they are also straining the long-standing economic interdependence between the two nations. The U.S. has more significant trade issues with countries like China, Mexico and Germany. Canada has been caught in the middle.”
In Michigan we have always enjoyed a terrific relationship with Canada. I know it’s different now but as youth we crossed the border often to visit Windsor. Going through the tunnel was always a special treat. My uncle lived in Sarnia, and we made several trips across the Bluewater Bridge. It was like going to Ohio or Indiana, just as frequent and Canadian people and businesses always welcomed us with open arms.
I would hate to see those strong ties between Michigan and Ontario be broker or even strained. As Deegan said, “We have been friends forever, and we need to get back to that relationship. We need to make sure the rhetoric is dialed back.”
I couldn’t agree more.