Let's talk about Trump vs Canada_ Tariff backfire on defense industry edition....
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What is the impact of Trump's trade policies on Canada's defense industry?
Well, howdy there, Internet people, it's Belle again. So today, we're going to talk about Trump vs. Canada, Defense Industry Edition. Canada was set to release its new strategy paper dealing with defense production last week, but due to events in British Columbia, that release was delayed. Well, the new strategy paper says Canada will increase its defense spending to 5% of its GDP, raise serviceability rates of Canadian equipment, increase defense exports by 50%. That's right, exports. And it will create more than 100,000 jobs. That brings us to the question. Bell, I'm just wondering if Trump just destroyed 125,000 defense manufacturing jobs in the United States with a stupid trade war. I'm looking at the Canadian plan, and it looks like they're basically scrapping all reliance on the U.S.
Am I reading this wrong?
How is Canada planning to increase its defense spending and exports?
He's reshoring jobs to other countries while we lost 100,000 manufacturing jobs last year. Is there any reversing this? Yes, the economists were right. Trump was wrong. The trade war is absolutely backfiring in big ways. Okay, so let's hit these questions one at a time. Did Trump really just destroy 125,000 defense manufacturing jobs? Not exactly. It isn't a zero-sum game. The addition of jobs in Canada doesn't mean that exact number of jobs will disappear in the U.S.
Did Trump destroy 125,000 defense manufacturing jobs in the U.S.?
Canada was a customer of the U.S. defense industry, so them striking out on their own will damage the U.S. industry. But by how much isn't certain yet. I'd say tens of thousands, but not a hundred thousand. From the Canadian side of things, this is part of a much larger reinvestment in their defense industry. In fact, the funding for this is only taking about 10% of money allocated for defense revitalization in last year's budget. It turns buying domestically for defense into the default option. As Carney recently said, quote, 75 cents of every dollar of capital spending for defense goes to the United States.
Can the shift in defense production from the U.S. to Canada be reversed?
That's not smart. This attitude signals a long-term shift. This isn't the country saying, we're going to boycott. That was last year. This year is, we're investing capital to never purchase these products from the U.S. again. The other question was, can this be reversed?
The overall situation will be reversed eventually. The tensions will eventually decline. Trade will eventually normalize.
What are the long-term implications of Canada's new defense strategy?
With this specific industry, the defense industry is different. Look, U.S.
allies feel betrayed. They saw deals destroyed. They saw half of Americans cheer those decisions. So it can't be blamed just on Trump. If you can't trust a country to honor a simple trade agreement, why on earth would you trust them with your national defense? My guess is that nobody old enough to have sent that message will still be alive when and if Canada ever starts to totally rely on the U.S. industry again. The damage this administration's trade policies have done can't really be overstated.
How has the U.S. relationship with allies been affected by recent trade decisions?
Anyway, it's just a thought. Y'all have a good day.
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Chapters
6 chapters
1
What is the impact of Trump's trade policies on Canada's defense industry?
0:01–1:10
2
How is Canada planning to increase its defense spending and exports?
1:10–1:52
3
Did Trump destroy 125,000 defense manufacturing jobs in the U.S.?
1:52–2:43
4
Can the shift in defense production from the U.S. to Canada be reversed?
2:43–3:18
5
What are the long-term implications of Canada's new defense strategy?
3:18–4:06
6
How has the U.S. relationship with allies been affected by recent trade decisions?
4:06–4:11
Speakers
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