BIDLACK | Oh, Canada — want a trade war? Colorado probably doesn’t
Author: Hal Bidlack - July 4, 2018 - Updated: July 5, 2018
Back in my day (just a sec, I have to check for teenagers walking on my lawn) growing up in southeast Michigan in the 1960s and 70s, there were only three main TV channels to watch – ABC, NBC, and CBS. Sure, there were a couple of UHF channels (kids, you may want to google “UHF”) but you were mostly stuck with just the big three. That was, of course, unless you lived near a mysterious foreign land – Canada.
Ann Arbor, Michigan, my home town, is situated about 45 miles away from the lovely city of Winsor, Ontario, just across the river into the aforementioned nation of Canada. From time to time, we’d take a family trip across the bridge, or – more excitingly – through the tunnel under the river, where my brother and I would watch for the stripe painted on the wall of the tunnel marking the exact point where you changed countries. Upon arrival at the point of entry on the other side, a Canadian cop (I always assumed he was a Mountie) would ask why we were coming to Canada, “business or pleasure.” For us, it was always pleasure, and if truth be told, excitement in visiting a foreign country. Canada was alluring and exciting, a land where the flagpoles had a different flag and you sometimes got asked if you wanted gravy on your fries. Like I said, exotic.
Which, of course, brings me to Colorado cows…
Our president said back in March that trade wars are “good, and easy to win.” He made that statement when he announced he was imposing a 25% tariff on steel and 10% on aluminum, and that was just for starters. Not surprisingly, the targeted countries have announced retaliatory tariffs on U.S. products such as, you guessed it, Colorado cows.
So how big a deal is Mr. Trump’s tariff and trade war for the good people of Colorado? Well, it depends. As a retired military officer who doesn’t manufacture or sell commodities in international markets, I’m pretty much ok. Unless, of course I want to buy something.
But if I were instead a Colorado rancher I might be concerned. You see, Colorado farmers and ranchers sell a lot of stuff to Canada. The Department of Commerce estimates that Colorado’s exports to foreign lands top $8 billion. The very top trading partner is – wait for it – Canada, with just under $1.4 billion in trade. (Oh, and whose second you may ask? Mexico. So that whole North American trade thing is a pretty big deal.)
There are over 5000 “small and medium sized goods exporters” in Colorado. The largest sector of Colorado’s international trade is, not surprisingly, agriculture, with over half a billion dollars in trade with Canada alone. The top export is beef, followed by pork, beverages, baked goods, and beer. The Canadian government estimates 141,200 Colorado jobs are directly supported by trade with Canada.
If you are in one of those jobs, it’s quite possible that Mr. Trump’s remarkable flippancy in tossing around trade wars is of concern. Roughly 21,000 U.S. companies have filed requests to be excluded from Mr. Trump’s tariffs, on the argument that the tariff’s will make their importing of vital materials so expensive that they will have to raise prices dramatically or, far worse, go out of business. The nation’s largest nail manufacturer – Mid-Continent Nail – has already laid off 60 of its 500 workers due to the new tariffs, and they have stated they fear going out of business entirely.
And remember the President touting Harley Davidson as a quintessential American company? Remember when Mr. Trump had them to the White House, with cool cycles out front and lots of flags waving? Well, as a direct result of European counter-tariffs, Harley is moving some production overseas and laying off workers. As it turns out, the Europeans are not fools, and they have placed tariffs on goods designed to hurt American workers as punishment for Mr. Trump’s actions. These include new tariffs on U.S. blue jeans and bourbon. The tariff on motorcycles went from 6% to 31%, hence the Harley move.
Colorado ranchers, farmers, bakers, and brewers will feel the direct impact of Mr. Trump’s foolish and immature trade wars. They are most certainly not good and are not easy to win. Sadly, Mr. Trump will not feel the impact of his policies himself; he’s too rich. But pity the poor rancher on the eastern plains and the small manufacturer on the Front Range, and others all across our state. Mr. Trump is wrong and it’s Colorado that will have to help pay the price.