President Donald Trump insisted Thursday that the U.S. has a trade deficit with Canada, a claim Canadians fear may interfere with negotiations on a new North American Free Trade Agreement (NAFTA).
“We do have a Trade Deficit with Canada, as we do with almost all countries (some of them massive). P.M. Justin Trudeau of Canada, a very good guy, doesn’t like saying that Canada has a Surplus vs. the U.S.(negotiating), but they do…they almost all do…and that’s how I know!” Trump posted on his Twitter account.
Canadian officials say Trump is wrong and that the U.S. has a trade surplus with its northern neighbor.
Even the Office of the U.S. Trade Representative contradicts Trump, confirming that “the U.S. goods and services trade surplus with Canada was $12.5 billion in 2016,” said Canadian foreign affairs spokesperson Adam Austen Thursday in response to Trump’s tweet.
Canadian Transport Minister Marc Garneau, who chairs the cabinet committee on Canada-U.S. relations, backed up Austen’s statement while talking to reporters in Montreal.
“At this point, it’s very important to point out that there is over $2 billion a day of trade between our two countries and overall annually the United States has a small surplus with Canada,” Garneau said.
“So we can talk about balanced trade between the two countries, huge amounts of trade, and this is something we want to continue to improve as we negotiate the NAFTA agreement.”
Canada, the United States and Mexico are renegotiating the decades-old free trade agreement, but progress has been plodding, with an eighth round of talks set for Washington in the near future.
Trump has repeatedly said the U.S. got the short end of the stick with NAFTA and he has demanded a better deal for the U.S. with Canada and Mexico.
White House Press Secretary Sarah Huckabee Sanders backed Trump’s claim during a press briefing Thursday, saying that when “energy and timber” are included in the trade figures, there is a trade deficit with Canada.
“In the briefing I said I would provide the trade deficit number we have with Canada. In 2017 we had a US$17.5 billion trade deficit.” In January 2018 we had a $3.63 billion trade deficit. Both reflect trade in goods. Which is exactly what @POTUS referenced,” Sanders later tweeted.
The Canadians contend that the Americans include goods that land in Canada for export but are not produced in Canada in the calculations, which artificially inflates the U.S. trade deficit claim.
A washing machine made in China, for example, may ship to Vancouver for export to the U.S. but is being counted as part of the U.S. deficit with Canada.