Border Adjustment Tax - is this really going to happen?!

Salma

Salma

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Jan 16, 2009
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http://www.huffingtonpost.ca/2017/0...da_n_14150538.html?ncid=fcbklnkcahpmg00000001

From the article: "According to an analysis from National Bank Financial, this tax, if it were to be set at 10 per cent as is currently proposed, would cause Canada’s non-oil exports to fall by nearly 11 per cent. It would cause a smaller 0.3-per-cent decline in oil flowing from Canada to the U.S."

I'm wondering what all of you thing about Trump's proposed "punishment for exporting to the U.S." tax.
As an industry, what should we be doing to prepare for the fallout of this if it actually happens?
Scary....
 
I can understand that with certain trade partners of the US (and hey, Canada as well) that rules aren't exactly fair. I'm thinking that it won't be a problem for Canada-US trade once Trump and the organization figure out that what comes around goes around, and that with us it could be a disadvantage to them if we reciprocated.

Trump is targeting the countries where the exit of wealth is the biggest threat (like China, Mexico ... but many others as well). As far as nearshoring manufacturing or stemming moving it overseas, the end result will be greater automation in manufacturing ... but the key is that the money stays in the US. Whether or not it works in practice may be debatable.
 
Something else that we need to worry about is the closing of the border between the US and Mexico. If that happens ALL of the freight that we bring down to Mexico in bond through the US will not be crossing the border from Canada to the US anymore. It will have to travel by boat.
 
Salma said:
http://www.huffingtonpost.ca/2017/0...da_n_14150538.html?ncid=fcbklnkcahpmg00000001

From the article: "According to an analysis from National Bank Financial, this tax, if it were to be set at 10 per cent as is currently proposed, would cause Canada’s non-oil exports to fall by nearly 11 per cent. It would cause a smaller 0.3-per-cent decline in oil flowing from Canada to the U.S."

I'm wondering what all of you thing about Trump's proposed "punishment for exporting to the U.S." tax.
As an industry, what should we be doing to prepare for the fallout of this if it actually happens?
Scary....
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Salma,
we will have to wait and see what Trump will do. These articles are all just projections when taking into account certain senerios. I think that a lot of these analysts want to be the 'one' who came up with the right one. We are just going to have to wait and see.
 
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The article also mentions that this will cause a general price increase for all consumer goods in the U.S.
Therefore, all the poor, red-neck hillbillies who voted for Trump have just dug their own graves.
 
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martinetav said:
Something else that we need to worry about is the closing of the border between the US and Mexico. If that happens ALL of the freight that we bring down to Mexico in bond through the US will not be crossing the border from Canada to the US anymore. It will have to travel by boat.
Click to expand...

Or ... every Canadian company shipping to Mexico would have to open a US entity and do it in two steps ... clear into the US, and then export from the US to Mexico separately ... same would apply to what we would get that is made in Mexico. Not just automotive, but overwhelmingly appliances and electronics like TVs are assembled in Mexico from parts sourced from around the world.

The point is it'll make big corporations think twice about shifting production to Mexico.
 
Probably will happen. Trump has no special love for Canada, and he was elected on buy American and putting the American worker first. We need to broaden our export horizons, and in that sense CETA is most timely and may help to soften the blow.
 
theman said:
Or ... every Canadian company shipping to Mexico would have to open a US entity and do it in two steps ... clear into the US, and then export from the US to Mexico separately ... same would apply to what we would get that is made in Mexico. Not just automotive, but overwhelmingly appliances and electronics like TVs are assembled in Mexico from parts sourced from around the world.

The point is it'll make big corporations think twice about shifting production to Mexico.
Click to expand...
No because it would not be legal for an American Company to sell to Mexico. He is talking about closing the border between the US and Mexico. All of the merchandise that usually goes by truck would have to be shipped by boat. A closed border doesn't mean 'open a US company' it means that it's CLOSED. No trade WHATSOEVER.
 
martinetav said:
No because it would not be legal for an American Company to sell to Mexico. He is talking about closing the border between the US and Mexico. All of the merchandise that usually goes by truck would have to be shipped by boat. A closed border doesn't mean 'open a US company' it means that it's CLOSED. No trade WHATSOEVER.
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Where did you hear this? Never heard this or anything even close to this. Trump may be a lot of things but stupid is not one of them. People are writing the guy off and he not even President yet.
 
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martinetav said:
No because it would not be legal for an American Company to sell to Mexico. He is talking about closing the border between the US and Mexico. All of the merchandise that usually goes by truck would have to be shipped by boat. A closed border doesn't mean 'open a US company' it means that it's CLOSED. No trade WHATSOEVER.
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Pretty sure that is not the case. His whole platform has been to stop illegal immigration into the U.S and make it less enticing for American companies to move jobs to Mexico. Building a wall wont do much good since most of the drug and people trafficking enter through tunnels anyway. As far as the trade issue, if you penalize or impose a tariff on products made in Mexico, China or Canada and sold in the U.S it just raises the price of the goods to the consumer. If the tariff is high enough to stop consumers from buying, then the plant gets moved to another country who doesn't have a tariff until one is imposed. Eventually you force retailers to sell only goods made in the USA and get ready to go back to the days of paying $1000.00 for a TV you now pay $200.00 for. Unless the price of fuel goes through the roof and it becomes too expensive to ship a container from China the days of a strong manufacturing base in North America are gone. That ship sailed a long time ago.
 
Sorry to say that Trump may not be as intelligent as some may think. If he was he might have stopped using his twitter account to attack everyone who says anything against him at 3 in the morning when his staff is sound asleep. He ran for President on a lark is the word he used in a recent interview. He was certain that he would lose. The Russian president Putin was so afraid of having to face Hillary that he made sure that she did not get in. Now, what with the information that Russia has on Trump, Russia will be running the US... Just because Trump says something does not make it true or false, which ever is the case. It just means that it is, or is not, a part of what this spoiled man child wants or doesn't want.
Now, about Trump closing the border between Mexico and the US. I watched, with great interest, and interview with Pierre Dolbec, owner of Dolbec Int'l here in the Quebec city region. They offer logistical services, consulting services and are a custom broker. He stated in the interview, that IF Trump throws out the NAFTA (North American Free Trade Agreement) and closes the US border access to and from Mexico, that this would be catastrophic for Canadian trade. All of the merchandise that travels in bond through the US to and from Canada would not make it through the Canada/US border. It would all have to travel by boat. Now, if you don't do any in bond loads you might think that this will not effect you. You would be wrong because, all of those who do will then be looking to do the loads that you/we usually do. Then there are the reefer loads that will not be coming out of AZ and TX. So we'll have all of those reefers fighting to do our dry van loads.This would change capacity for outbound and inbound freight, I'm sure that you would all agree on that.
I like spend part of my Sunday mornings listening to those political discussion shows both in Canada and the US. No one really realizes how this will touch their everyday lives. That Iphone that costs about 8 or 900 $ will skyrocket to about 2000$ and so on, for many other everyday items like that TV that was mentioned. You thought that Cauliflower was expensive at $8. We'll find that cheap if the border is closed. I know that many here in Canada will not want to admit it but, Trump will have an effect on ALL of north american trade. He is a dangerous man who has no regard for anyone, not even those middle class, middle age white men who voted him in.
 
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The sky is falling, the sky is falling!!! Just more liberal baloney. I find it amazing that the man has not spent one day in the job yet, but all of these so called experts are predicting gloom and doom.
 
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Rob said:
Yep you guys better all get out of trucking now as it is all over. Please send you customer lists and drivers to me. I will look after what is left if there is anything. January 20th this Friday the world will come to an end get your Zombie Apocalypse gear ready.. It must be true I read it on the internet.
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Well Rob, this is where you pull out the bitch in me ( by the way I have been called worse. After successfully raising three kids alone, my skin is pretty thick too). Statements such as this that mock what I have to put forward. We will wait and see and I will take the opportunity to say I told you so if it comes about. I invite you to do the same with me. We all know that we cannot see into the future but if his time as president elect is an example of what is to come... pretty sure that our world is about to change drastically once again. Do you remember the disaster at the borders after 9/11?
 
And by the way Rob, on the lighter side of life
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Wow! Tell us how you really think.
Time will decide on whether he is the worst President ever. Maybe so, but he was elected to do a job and we will just have to wait and see how things turn out. Nothing that you or I can do about it.
However, there is something we can do to try and fix our own catastrophic situation in Ontario. Unfortunately it is still a couple of years away. I hope it is not too late.
 
Not much we can do about Trump other than to take him at his word.. that he will tinker with NAFTA and encourage American protectionism. We can respond in our own small way by hedging our bets.. by looking at other markets. I'm now selling freight to/from Europe, Australia and New Zealand...along with my bread and butter USA freight. Also working to boost my share of domestic Canada, although, my god, domestic freight is very competitive ($73.24 to move a 690 lb skid from Montreal to Calgary.. wow.. I can't touch that).
 
1st rule in negotiating is start off asking for more than you will settle for. It goes without saying that is exactly what the U.S side will do. 2nd rule is have someone on your side who knows what he is talking about and is a strong negotiator. I praise the government (yes I said it.) for bringing in Brian Mulroney to negotiate on our behalf. Brian will ensure that a deal is worked out that is not based entirely on inclusiveness and gender equality. (yes, I said that too)
 
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