I’ll admit the headline in the Washington Post grabbed my attention but before everyone in the Canadian media goes and dons their Team Canada jerseys and heads out onto the ice for an old-fashioned hockey brawl, can we all read beyond the first sentence?
The WaPo headline was, “In fundraising speech, Trump says he made up trade claim in meeting with Justin Trudeau.”
It’s pure click bait and I don’t blame WaPo for using it. The claim in the headline is accurate according the audio that the Post describes but that I myself have not heard. But if you read longer, you read that Canada may have a trade surplus with the United States and all those journalists wearing their Team Canada jerseys might want to skate back to the bench.
How did this story even come to be?
Turns out Trump was giving a speech at a fundraiser and someone recorded it and released the audio.
In the audio he admits to making up the trade deficit he has with Canada but then points to an official that says it is true, something most in the Canadian media won’t touch. Here is what WaPo is reporting.
“Trudeau came to see me. He’s a good guy, Justin. He said, ‘No, no, we have no trade deficit with you, we have none. Donald, please,’ ” Trump said, mimicking Trudeau, according to audio obtained by The Washington Post. “Nice guy, good-looking guy, comes in — ‘Donald, we have no trade deficit.’ He’s very proud because everybody else, you know, we’re getting killed.
“… So, he’s proud. I said, ‘Wrong, Justin, you do.’ I didn’t even know. … I had no idea. I just said, ‘You’re wrong.’ You know why? Because we’re so stupid. … And I thought they were smart. I said, ‘You’re wrong, Justin.’ He said, ‘Nope, we have no trade deficit.’ I said, ‘Well, in that case, I feel differently,’ I said, ‘but I don’t believe it.’ I sent one of our guys out, his guy, my guy, they went out, I said, ‘Check, because I can’t believe it.’
Alright,so Trump made up the claim that there was a trade deficit for America with Canada, or at least he claimed it without knowing. Trudeau claimed there was no trade deficit and Trump says they both sent their people out of the room to check.
So what happened then? Well Trump describes what happens as his official coming back in and initially backing up Trudeau until turning it on its head.
‘Well, sir, you’re actually right. We have no deficit, but that doesn’t include energy and timber. … And when you do, we lose $17 billion a year.’ It’s incredible.”
So what is the truth here?
Well Canadian officials oddly always use American data which shows that Canada runs a trade deficit with America. But Stats Canada data shows that we have trade surplus with the United States.
So what is the story morning glory?
Tough to say. Both countries measure things differently.
Theo Argitis from Bloomberg is one of the top business reporters covering Parliament Hill. He is one of the longest serving business reporters on the Hill and last December looked at this very issue with an article that said Trump might be right.
Canadian officials tend to use U.S. data to make their case and the Bureau of Economic Analysis has calculated the U.S. had a $7.7 billion surplus in 2016. But Statistics Canada data show it’s Canada with the surplus in goods and services, totaling C$18.8 billion ($14.6 billion) last year. That’s a $22.3 billion difference between the two measures.
The article goes on to explain the different measurements both countries use to arrive at their conclusions but isn’t it odd that official US stats claim that they run a surplus with us and Canadian stats say we run a surplus. Yet neither leader believes their own stats. They point to the other country.
I have personally asked economists that specialize in cross-border trade what the truth is and I get answers like it is complicated.
Well, let’s uncomplicate it.
Let’s come up with a common set of measurements and determine this.
Because whether it is our respective politicians or media wearing team jerseys pushing their agenda, this back and forth is getting tiring. Stats Canada and the US Bureau of Labor were able to come to terms on measuring unemployment rates, surely we can come to terms on this.