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Canada likely safe from Trump's trade overhaul

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President Donald Trump's hair-raising inaugural address, from a pragmatic Canadian standpoint, was not surprising.

This is the single most important thing Trump said: "Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families."

Judging from the speech, and a series of brief policy statements that appeared on the White House website after Trump was sworn in, there is profound geopolitical uncertainty ahead. There's also room for cautious reassurance, north of the Canada-U.S. border. This country has cards to play, considerably better ones than do either Mexico or China.

Here's what did not appear in the speech: Any repetition of Trump's prior musings about banning Muslims from entering the United States, or forcing Muslim Americans to register in a database, or curtailing immigration from specific countries, or building a Great Wall on the U.S.-Mexican border.

Here's what did appear: Stark, combative restatements of the Trump administration's mercantilist, protectionist economic policy.

"We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs," reads one line of the speech, which reportedly was co-written by Trump's chief strategist, Stephen Bannon. "Protection will lead to great prosperity and strength."

Setting aside that this statement is wrong and has been demonstrated to be wrong time and time again, here's what it likely means.

The Trump administration is focused on bringing manufacturing back to the continental United States. America's three largest manufactured-goods trading partners are China, Canada and Mexico, in that order.

Mexico, according to the Office of the United States Trade Representative, had two-way goods trade with the United States worth US$531 billion in 2015. The U.S. deficit in that exchange was $58 billion, meaning Americans bought $58 billion more in goods from Mexicans, than they sold to them.

It's a significant imbalance that helps explain -- along with illegal immigration -- Trump's rhetoric targeting Mexico.

China had two-way goods trade with the United States of $659.4-billion in 2015. The U.S. deficit in that exchange was a whopping $366-billion. It's a huge imbalance.

It helps explain why Trump has for weeks sounded markedly less friendly to China than have previous presidents. He's laying the table for a trans-Pacific trade war.

And Canada? This country had two-way goods trade with the United States worth $575-billion in 2015, but in almost even measure, a deficit for America of just $15-billion. America bought mineral fuels, oil and natural gas, to the tune of $70-billion in 2015. The top three categories of American goods bought by Canadians were vehicles ($48 billion), machinery ($43 billion) and electrical equipment ($25 billion.)

An estimated nine million jobs in 35 states depend on exports to Canada.

Whatever trade action the Trump administration may take in an attempt to balance U.S. trade with Mexico or China, it cannot seriously jeopardize American exports to Canada, without causing widespread manufacturing job losses on its home soil and in the very rust belt states that gave Trump the victory in November.

Canada will be buffeted by the secondary effects of U.S. protectionism. But we are too good and reliable a client to become a target ourselves.

Twitter.com/mdentandt

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