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April 19, 2018 12:00 PM, EDT

Everybody Loses in Trade War, Canadian Chamber of Commerce President Says

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President Donald Trump has tweeted “trade wars are good, and easy to win.”

Don’t believe it, the president of the Canadian Chamber of Commerce told Tampa business and political leaders April 18.

“We share more with you than with anybody else in the world, and we shouldn’t allow politicians to damage that relationship,” Canadian chamber CEO Perrin Beatty said in an interview with the Tampa Bay Times after a lunch with about 45 executives at the University Club. “We should instead be talking about how do we do more together, not how do we do less.”

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Tampa Mayor Bob Buckhorn couldn’t agree more.

“Tweets are not a foreign policy,” said Buckhorn, who was at the lunch and also met with Perrin with a smaller group of executives. “Canadians are one of our biggest, best, most long-standing trading partners. The noise going on in Washington, D.C., does not speak for the Tampa Bay area. We are open for business.”

Beatty, who has a second home in Naples, came to Tampa to keep the lines of communication open in a state where Canada is the No. 1 export market for agriculture.

“Simply put, the food supply in Canada in winter would be distinctly inferior if it weren’t for products from Florida — everything from strawberries to onions to citrus,” said Beatty, who never actually used the president’s name in a 40-minute interview.

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Canada also is Port Tampa Bay’s fourth-biggest trading partner, mainly in bulk products, with fertilizer going north and granite coming south. Several high-profile bay area companies also have important Canadian ties: Tampa Electric is owned by Emera, based in Nova Scotia. Electronic manufacturer Jabil has a plant based near Ottawa.

Port Tampa Bay 

But with Trump ratcheting up his rhetoric on trade, Beatty said Canadian businesses see cause for concern on several fronts:

NAFTA

“First, do no harm,” said Beatty, who called the North American Free Trade Agreement “something that’s very beneficial to all three countries” and supported by chambers of commerce in the United States, Canada and Mexico.

Now, more than two decades after it was first negotiated, NAFTA could use updates to address e-commerce — which scarcely existed when the agreement was written — as well as impediments to people moving across the border to do business, he said.

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But Beatty said negotiators still are working on a handful of what the U.S. Chamber of Commerce has called “poison pills.”

There’s a proposal to change the way disputes are settled between investors and nations. The Trump administration has proposed setting quotas on U.S. content in cars whose components often are manufactured on assembly lines located on both sides of the border — a requirement not put on imports made by Korean or German automakers, he said. And there’s talk of adding a sunset provision that Beatty predicted would discourage new business ventures.

“There’s nothing tougher for business than uncertainty,” he said. “If you’re making a billion-dollar investment, you want to know what the rules are.”

Tariffs

Whether on steel, lumber or newsprint, protective tariffs are “enormously disruptive,” Beatty said, raising costs for consumers.

Tariffs on lumber, the subject of decades of trade disputes between the two countries, raise the cost of building houses in the U.S., he said.

And recently enacted tariffs on newsprint — requested by one U.S. paper mill in the Pacific Northwest but levied against Canadian mills that serve the entire U.S. market — “threaten the very viability of hundreds of community newspapers across the United States,” he said.

“Is it damaging to Canada? Yes it is,” Beatty said. “But everybody loses. Nobody wins from this.”

Beatty pointed to the effects of the Smoot-Hawley Tariff of 1930, which raised tariff rates to protect U.S. businesses and farmers despite a petition signed by more than a thousand economists asking then-president Herbert Hoover not to sign it.

Canada was the first nation to retaliate against the United States over the tariff, Beatty said, and two dozen others followed, making the Great Depression both longer and deeper.

“It did exactly the opposite of what it was designed to do,” he said.

Tourism

One thing Florida imports a lot of from Canada is people, especially at this time of year.

“Politicians come and go, but the fundamental relationship between our two countries remains, and it’s a relationship developed over centuries, a relationship of blood,” said Beatty, who noted that his grandmother was born in Missouri and his sister lives in North Carolina.

Still, a tone set at the national level can have an impact on decisions made by individual households.

“In the short term,” Beatty said, “if the message you get is you’re not wanted — and that’s not a message you get in Florida; it’s a message that may come out of some other place further north — then you go some other place where you are wanted.”

Distributed by Tribune Content Agency, LLC