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Trump’s Trade War: Part III

Trump’s Trade War: Part III

by D.J. McGuire 

A new casualty in Trump’s Trade War has become the most visible. Thankfully (for him, not for us), the victim (Boeing) is hardly sympathetic, but that doesn’t make the damage any less real.

Canada has followed through on its threat to cancel a purchase of Boeing FA-18s due to the firm’s successful demand for a massive tariff against Bombardier imports into the American plane market (Chicago Tribune).

The Trudeau government is escalating a trade fight with Boeing, ditching plans to buy 18 Super Hornets while launching a search for new fighter jets under parameters that could hamper future bids from the U.S. plane maker.

Canada said Tuesday it would instead pursue plans to buy 18 used Australian F-18 fighter jets to supplement its aging fleet, and launched the process to buy 88 new jets as a long-term replacement.

But wait, there’s more.

Canada created a new procurement step, saying companies that hurt the country’s economy would be hard pressed to win any contracts, including the lucrative 88-jet order.

“Bidders responsible for harming Canada’s economic interests will be at a distinct disadvantage,” Procurement Minister Carla Qualtrough said at a press conference. “The assessment criteria will be used in future procurements.”

In other words, Boeing’s insistence on the tariff (and the Trump Administration’s eagerness to comply) could very well freeze Boeing out of future government contracts with Canada.

To some extent, this is just desserts for Boeing, which has relied on protectionism in one form or another for decades (especially the Export-Import Bank, a.k.a., “The Bank of Boeing”). Moreover, Canada is hardly an angel here, as Andrew Coyne (again) discusses in the National Post.

That said, the damage to the American economy is real, and due to Trump’s willingness to ignore the obvious benefits from Canada’s self-defeating Bombardier subsidy (namely, less expensive planes for our airlines leading to a combination of higher wages for pilots and lower fees for travelers) and fell for Boeing’s complaints. Now Boeing is losing business in Canada, and our closest neighbor and ally is becoming a trade combatant.

This could get much, much worse.

D.J. McGuire is the conservative Democrat on More Perfect Union podcast – and sometimes feels like he is the lone conservative Democrat in the country, but Republicans keep making it easier for him.

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