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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy do we run a trade deficit with Canada?
They're our largest trading partner under any of our free trade agreements. They have a higher minimum wage, higher unionization, stronger environmental protections, and all the other factors that people claim led us to a trade deficit with Mexico under the exact same agreement, but they manage to run a trade surplus with us. Why?
GitRDun
(1,846 posts)Oil gas lumber etc
Recursion
(56,582 posts)More oil, more trees. And we also have more of both than Mexico.
Kaleva
(36,312 posts)About 1/3 of the softwood lumber used in the US comes from Canada. There isn't much of a market for American lumber in Canada.
Recursion
(56,582 posts)>> There isn't much of a market for American lumber in Canada.
Well, right, that's what I'm asking about. Why does Canada sell more timber to us than we to them? Multiply that by a thousand or so sectors. When the country in question is Mexico, we say "their workers make less than ours", but the opposite is the case with Canada.
For that matter we harvest more timber than Canada does: https://www.woodmarkets.com/canada-u-s-top-20-lumber-producers-annual-ranking-2015/
Kaleva
(36,312 posts)They have more then enough to meet their needs. The US has vast quantities of oil and lumber but not enough to meet our demands so we import to make up the difference.
Spider Jerusalem
(21,786 posts)And the USA uses commensurately more resources and has to import what it can't produce. Canada has much larger oil reserves than the USA even though it produces oil at a lower rate. Canada also has more forest than the USA (slightly, 9% of the world's forests vs 8% in the USA) even though its timber industry is not as large.
Spider Jerusalem
(21,786 posts)the US produces around 8.6 million barrels of oil a day and uses more than 19 milllion. Even saying "we have more than they do! Why do we have a trade deficit?" betrays some pretty serious Trump-level ignorance of certain economic facts.
NCTraveler
(30,481 posts)pnwmom
(108,980 posts)Recursion
(56,582 posts)But we manage to buy a whole lot from them
pnwmom
(108,980 posts)from China are relatively cheaper.
Canada isn't flooding our market with cheap knock-offs.
hunter
(38,317 posts)... including machine tools and other technologies that were once the exclusive domain of European and North American industry.
Chinese manufacturers are also willing to sell U.S. retailers crap.
When we import crap made to our specifications and absurdly low price points it's on us.
dawg
(10,624 posts)in U.S. stocks, buy U.S. bonds, and probably U.S. real estate as well. Dollars they invest in the U.S. are not available for spending on U.S. products.
Another possibility is that we are running an offsetting surplus with Canada in services or intellectual property or some other category that may not be properly measured by the trade deficit computations.
Recursion
(56,582 posts)We run a trade deficit because we've pursued a strong dollar policy for 25 years. The disconnect is the assumption that that's a bad thing.
nikibatts
(2,198 posts)that we are the biggest consumers on earth. Trade deficit is another faux issue just like the national deficit. It only mean something when the GOP says it does OR when everyone in the pot tries to collect at the same time..which will not happen. And if it does, we can just print more money or begin to mine bitcoins.