USA Has Trade Surplus With Canada Excluding Discounted Energy

[Economy 53,076]

https://www.bnnbloomberg.ca/business/2025/01/09/what-are-you-complaining-about-economists-assail-trumps-canada-trade-claims/

 

Despite Trumps claims that trade with Canada kills jobs, a look beneath the numbers shows the US trade deficit is exclusively because of energy the US buys from Canada particularly oil which it doesnt have enough of it for itself. Oil that is discounted on top of that and thus benefits USA vs if it had to buy it elsewhere

 

This fact therefore disproves trade is killing manufacturing jobs on US side of the border as when it comes to factory type output Canada actually buys more from USA than USA buys from Canada

 

Additionally these trade numbers from Trumps administration often conviniently exclude trade in services which the USA has a trade surplus with Canada as well

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Edit: To clarify why the two are being seperated in this point, its just to point out that the trade relationship isnt screwing the US with cheap labor products and killing manufacturing on union jobs. The trade is very fair and Canada does in fact buy more every day goods from US than the other way around

 

Energy happens to be something the US needs a lot of still and we have it in abundance and thats ultimately what creates the trade deficit. But it doesnt make it a bad trade relationship or one of a rip off situation. The US would still need it from someone else if we didnt sell it

 

Canada also has trade deficit with most Central American and South American nations. We simply need their tropical produce because we cant grow it in this harsh climate, but we dont competitively sell much they need from Canada so we will always probably have a trade deficit with them. It doesnt automatically make it a bad relationship

[Economy 53,076]

@GagaSine @Torontomonster @juicyjuicy @JustinTrudeau @Just A Holy Fool @Obobo @27monster27 @Anderson123

 

If this is true, then tarrifs might be slightly less harmful for Canada relative to US than some think. Hes unlikely to tarrif oil but even if he does it will get sold regardless

 

Are for manufactored goods it will hit both sides at least equally tho Ontario will really suffer.

 

Of course as a % of total economy the US can handle damage better cuz they are so much bigger. But thats if they choose to go 1 on 1 with another Nation (like Canada) only. But he seems keen on taking the entire world at once so I dunno

[Ayesha Erotica 1,959]

Ultimately, the bottom line of the overall bill means the most, and that's where the U.S. has a deficit. You can't just exclude energy like that. Canada has that, and it gets real money for that.

Russia, which often has a trade surplus, would never think of deducting raw materials from the bill. Then it would just be in the red. And Russia ultimately shows how important raw materials are: you can use them to finance wars for years, you can use them to make weapons, you can use energy to blackmail other countries, you can finance yourself with raw materials. They can be central and fundamental for a country.

BUT: It has not been proven that a trade deficit is necessarily detrimental to a country! There are also opposing views that say that a country with a trade deficit is particularly rich and can afford things that others have to work harder for. In this case, a trade deficit would be a kind of award for a wealthy consumer society.

Therefore, even if US has a real trade deficit, it does not need to be considered as a problem.

[Ayesha Erotica 1,959]

1 hour ago, Economy said:

But he seems keen on taking the entire world at once so I dunno

I'm excited how this will unfold and what effects on inflation it will have. Usually, once countries get richer, labour is outsourced to cheaper countries.

[Economy 53,076]

4 hours ago, AyeshaErotica said:

Ultimately, the bottom line of the overall bill means the most, and that's where the U.S. has a deficit. You can't just exclude energy like that. Canada has that, and it gets real money for that.

Russia, which often has a trade surplus, would never think of deducting raw materials from the bill. Then it would just be in the red. And Russia ultimately shows how important raw materials are: you can use them to finance wars for years, you can use them to make weapons, you can use energy to blackmail other countries, you can finance yourself with raw materials. They can be central and fundamental for a country.

BUT: It has not been proven that a trade deficit is necessarily detrimental to a country! There are also opposing views that say that a country with a trade deficit is particularly rich and can afford things that others have to work harder for. In this case, a trade deficit would be a kind of award for a wealthy consumer society.

Therefore, even if US has a real trade deficit, it does not need to be considered as a problem.

Well the last part is the entire point im making. I never said in my OP the trade deficit was fake, Im talking about it in the context and narrative Trump pushes. Trump talks about it in the context that Canada is ripping off the US and being subsidized in the trade deal purely from the trade balance alone and killing US jobs which is false

 

Manufacturing which is something the US can have more control over, the US actually has a trade surplus. The energy and resources on the otherhand is harder to control and has less to do with competitiveness, the US simply doesnt have enough of those resources for itself and has to buy them regardless, it can only onshore so much and if it doesnt by from Canada it will buy from somewhere else, we just happen to have it.

 

So at least in the context that Trump is refering to trade, i think it is warranted to seperate to two in order to understand what the trade relationship is and why

 

Canada also has a trade deficit with many Countries. Dont have exact numbers rn but id imagine Canada buys way more to Ecuador than we sell. We need bananas, avocados etc we cant grow on our own climate yet we dont sell much they need. Does that mean were "subsidizing" Ecuador and that they are ripping Canada off and the trade relationship is bad? Absolutely not! We still need our bananas and avocados we cant grow on our climate and if we dont buy from them wed still need them from elsewhere and our overall trade balance wouldnt change

 

Cheap manufactured goods from Taiwan with poor labor laws giving them unfair advantage on the other hand is a totally different situation.