Canadians are mad as hell at Donald Trump and they’re not going to take it any more by boycotting all things American, including trips, cars and ketchup.
Polls suggest that more than seven out of 10 Canadians are ready to do their bit to hit back at the U.S. President’s belligerent stand on trade.
It is another worthwhile Canadian initiative, for sure. The #boycottUSA movement shows guts, defiance and national pride. Done right, it can be a personal vote of confidence in the Canadian economy.
So yes, by all means, boycott away if it makes you feel better.
But don’t think for a minute that doing so will bring Mr. Trump to his knees.
That’s because most of what Canada imports from the U.S. are not consumer goods or services. Nearly 70 per cent of Canada’s merchandise imports are made up of things that companies use in their operations or incorporate into their products. It simply isn’t practical for consumers to boycott plant machinery, car parts or commercial aircraft.
And businesses can’t afford to be overly nationalistic about where they buy the products they need to thrive and grow. If the best, cheapest or only supplier of a particular product is located in the United States, that is where a company will buy it.
Motor vehicles are the only major consumer good in the top 25 categories of products that Canada imports from the U.S.
Buying a car that isn’t made in the U.S. may make you feel better. But it’s not clear it will inflict pain on the U.S. Many of the vehicles assembled in Canada, such as the Dodge Grand Caravan, Ford Edge or Cadillac XTS, may be made with mainly U.S. parts. Likewise, boycotting a particular U.S.-made vehicle is just as likely to hurt Ontario-based parts suppliers as it is to inflict pain on General Motors.
The same goes for breakfast cereal. Shun that box of Cheerios and you may be hurting Manitoba farmers who supplied the oats.
Petroleum products are also on the list of leading imports. But it’s not easy for drivers to know where the fuel they buy is produced and refined.
The purest and most effective way to make Americans hear you is to avoid non-essential travel to the U.S. Stay home this summer. Go to Prince Edward Island instead of Maine. Choose Banff National Park or the Yukon over Yellowstone National Park or the Grand Canyon. For a history fix, go to the Plains of Abraham instead of Gettysburg. And next winter, ski at Mont-Tremblant or Whistler.
Canadians spent more than $20-billion on travel to the U.S. in 2016. Cutting that by a third would hurt the U.S. and also benefit the Canadian economy if people vacation at home.
Many Canadians tell pollsters they are willing to stop travelling to the U.S. A Nanos survey for The Globe and Mail, for example, found that roughly three-quarters of Canadians are willing or somewhat willing to avoid the U.S. because of the escalating trade fight.
Unfortunately, the most recent travel figures suggest that Canadians aren’t yet doing that in practice. Canadian visits to the U.S. were up in 2017, the first year of Mr. Trump’s presidency. And in spite of a weaker Canadian dollar, visits are up again so far this year. Canadians made 3.8 million overnight trips to the U.S. in April of this year, up from 3.5 million in the same month last year.
This cursory analysis of the #boycottUSA movement shows just how complicated trade wars can get.
International supply chains make it increasingly difficult to distinguish the nationality of many consumer products. And for business inputs, price and function are more important than where it’s made. That’s why tariffs typically hurt all sides in a trade fight.
Consider the recently imposed U.S. tariffs on Canadian softwood lumber and newsprint. The pain is felt in Canada, of course, but also in the U.S., where newspapers and home builders are facing steep price increases.
The same applies to boycotts. Consumers should make sure the products they shun aren’t actually made with Canadian parts or ingredients.
That’s why trade wars are inevitably bad, and tough to win.