By on September 26, 2018

Canadian Prime Minister Justin Trudeau ignored mounting pressure from the United States to quickly agree to a new NAFTA deal on Wednesday. Trudeau indicated it was possible for the three nations to maintain a trilateral agreement, but noted his priorities would always align with what’s best for Canada. The nation now seems fine with ditching the agreement altogether.

Meanwhile, U.S. President Donald Trump announced that an agreement reached with Japanese Prime Minister Shinzo Abe allows the two countries to begin trade negotiations. The focus of these talks will likely be automotive in nature. Trump has remained oddly fixated with convincing Japan to sell more American-made models ever since taking office, and the Land of the Rising Sun doesn’t want itself saddled with import tariffs. 

After months of relative silence, Canada was forced back into the fray after Mexico and the U.S. reached an agreement, announcing their intent to finalize that part of the NAFTA deal before October. Canada was invited to the party, but the window to RSVP is extremely narrow. Trudeau’s words echoed most of our earlier coverage on the matter, citing the various sticking points relating to the deal. But it also cast serious doubt on the likelihood of the nation signing something before the end of the month.

“We will keep working as long as it takes to get to the right deal for Canada,” Trudeau told reporters at the United Nations, adding that he would absolutely walk away from any arrangement that didn’t feel right.

Most Canadian officials seem to agree. “If it doesn’t happen by the end of the week, we’ll just keep working away and trying to get the best deal for Canada,” David MacNaughton, Canada’s Ambassador to the United States, said during a Toronto event arranged by Politico. He also said that, on a scale of 1 to 10, the chances of an agreement by the Sept 30 deadline rated a 5, according to Reuters.

The United States no longer seems to care what Canada does. After months of failed negotiations, U.S. Trade Representative Robert Lighthizer complained this week that Canada wasn’t making enough concessions. A year earlier and those grievances would have been launched at the United States, which was accused of being too selfish in the opening stages of NAFTA renegotiations. Since then, the U.S. made a concerted effort to roll back its demands to encourage Mexico and Canada to play ball. Still, the threat of new auto tariffs remains if its neighbor to the north doesn’t sign something soon.

That ultimatum was also extended to Japan. Prime Minister Shinzo Abe delayed bilateral trade talks with the U.S. after Trump took office, but with tariffs now in the pipeline, the PM agreed to begin discussions on Wednesday.

According to Bloomberg, Japan’s primary goal is to delay or remove the potential U.S. auto tariffs. Sources familiar with the matter compared the Japanese talks to an arrangement the European Union made with the U.S. last July, where the Trump administration agreed to postpone import duties while negotiations progressed.

From Bloomberg:

Toshimitsu Motegi, Japan’s economic revitalization minister, and U.S. Trade Representative Robert Lighthizer on Tuesday agreed on the outlines of the talks, three people familiar with the matter said.

Abe spent much of his political capital on negotiating and finalizing the 12-nation Trans-Pacific Partnership that Trump campaigned against and withdrew the U.S. from in the first days of his administration.

The Japanese leader during the 2016 presidential campaign even met with Trump and tried to convince him to stay in TPP. The 11 remaining nations are planning to implement the agreement in 2019.

Trump will undoubtedly look to strengthen trade between the two nations while carving out a better deal for the United States. That’s likely to include a goal of sending more American autos into Japan. However, no leader within the auto industry or executive branch of the government has managed to pull that particular miracle off without a hitch.

While the U.S. is perfectly capable of shrinking Japan’s trade surplus, we’re less optimistic it can convince its population to buy American. Despite accusations that the country imposes strict import barriers that hampers the ability of Western automakers to do business there, the truth seems to be that the Japanese simply don’t like American cars. There’s an overwhelming prejudice throughout the region that American cars lack in terms of reliability and overall quality. This results in extremely poor sales and lower than average resale values of most Western automobiles vs their Japanese counterparts.

[Image: Canada Summer Games/Flickr (CC BY 2.0)]

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59 Comments on “Trade War Watch: Canada Says It’ll Take Its Time Reaching a Deal; Japan’s Up for Talks...”


  • avatar
    stuntmonkey

    FivethirtyEight is projecting a 4 in 5 chance the Dems take the house in November. The Senate is 3 in 10 for a chance to flip, but even that is better than what we were looking at early in the summer. It sure looks like Canada might be better off with a later deal when the Whitehouse will likely be weakened or distracted with a lot of other issues coming down the pipeline.

    • 0 avatar
      Hummer

      If you trust fivethirtyeight to predict how the next election is going to swing I have bad news for you. What happened in 2016 was no surprise to anyone paying attention to the different bases, 2018 isn’t looking to be any different.

      I’ll leave you with this,

      https://i.redd.it/485cvrvac3301.jpg

      • 0 avatar
        Astigmatism

        538 predicted that there was about a one-in-three chance that Trump would win. What of it? If you roll a die, there’s a one-in-three chance that it will land on a 1 or a 2; do you think that means rolling a 1 or a 2 disproves that somehow?

    • 0 avatar
      thornmark

      WOW – 9/24/18 Gallup poll has the GOP up over the Dems – better than 2010

      and FiveThirty Eight had crooked hillary and the Dems winning the House and Senate in 2016.

      GOP holds the House and picks up 3-8 Senate seats

      and btw on tuesday the GOP flipped a Texas Senate seat held by the Dems for 139 years

      • 0 avatar
        thornmark

        yes 139 years! and the district is 73% non-white!

        sorry Beto, you’re gonna lose big – as big as Wendy Davis did when the MSM said she was the next big thing and gonna win just a few years ago in TX

        wendy lost by a huge margin, she won less than 40% and lost the women

      • 0 avatar
        Astigmatism

        The nice thing about living in your own world is that you never have to be disappointed by reality.

      • 0 avatar
        Luke42

        @thornmark:
        “WOW – 9/24/18 Gallup poll has the GOP up over the Dems – better than 2010”

        This statement makes it clear you don’t actually know what 538 does.

        They aggregate a lot of different polls together, in a statistically rigerous way and use those to forecast elections.

        They don’t combine polls blindly. They also track the relative bias of each polling organization, which is an input to their statistical model. See:
        https://projects.fivethirtyeight.com/pollster-ratings/
        They find that Gallup tends to favor Republicans by about 0.9 points, compared to the other polls. They also give Gallup a “B” grade for quality.

        From 538’s perspective, your poll is likely an outlier.

        Given what 538 acrually does (aggregation of polls), choosing a single poll to refute their methodology is kind of silly. Yes, they thought of that — 538 came about as a statistically competent way to refute exactly the argument you’re making.

        You can keep making the argument that one outlier poll from a “B”-rated polling agency is closer to the truth if you like. But you aren’t going to make much headway with it among people who understand what you are actually saying.

      • 0 avatar
        Peter Gazis

        thornmark

        “crooked Hilary”

        Grow up

  • avatar
    stuntmonkey

    538 is pretty open about their methodology and update their odds periodically. They did well in past non-crazy elections for presidential races because there is a good base of polling for presidential elections, but they themselves admit that they can’t be as precise for house races where the polling isn’t as frequent or consistent. Not perfect by any means, but worth keeping on the watch list.

    • 0 avatar
      thornmark

      Trudeau, on the other hand, is deeply unpopular and is using the trade issue to bolster support – because his party could lose the Ontario election

      People noticed how Trump ignored Trudeau at the UN and only paid attention to world leaders

      • 0 avatar
        Whatnext

        LOL, by “deeply unpopular” you mean leading the next party by 5 percentage points in a 5 way race?
        https://www.cbc.ca/news/politics/poll-tracker-federal-poll-averages-and-seat-projections-1.4171977

        • 0 avatar
          thornmark

          Trudeau is throwing Canada under the bus to inflate his poll numbers

          Trump/Ross predicted this and made the agreement w/ Mexico as a result

          Mexico will withdraw from NAFTA first leaving the US w/ no other option than also leaving and to do bilateral w/ Mexico – making US internal opposition abortive

          Trudeau never saw that coming – both Trump and Ross have made careers eating dilettantes like Trudeau for lunch

          Trudeau is ok short term but in deep doo doo long term

          • 0 avatar
            Luke42

            Trudeau laughing at Trump with the rest of the UN General Assembly.

            Trudeau is likely stalling for time while hammering out a trade agreements with the EU and with China to diversify Canada’s foreign trade.

            Also, there’s a good chance that Trump will not serve out his term, especially after Trump was laughed out of the UN General Assembly. From Trudeau’s perspective, making a deal with Trump would be foolhardy because there’s no guarantee that the deal will hold after Trump leaves office — or if Trump just changes his mind for no reason (like he did the last time they were close to a NAFTA agreement). In other words, Trump is an unreliable partner.

            Canada’s interests are best served by a) diversifying their international trade and b) waiting a couple of weeks (or years) for the Trump presidency to end.

            Canadians have the luxury of long-term planning here.

          • 0 avatar
            darex

            Trump will outlast Trudeau. Trudeau will not get reelected, but Trump will.

          • 0 avatar
            DougD

            Not so sure that Trudeau is toast. If you look at the Liberal’s shellacing in Ontario provincial election there was palpable hatred both at Wynne personally and their policies.

            I didn’t vote for Trudeau but other than spending too much money he’s doing a reasonable job in my opinion. He seems to be counting on outlasting Trump, who know’s what’ll happen?

      • 0 avatar
        wsn

        –“Trudeau, on the other hand, is deeply unpopular and is using the trade issue to bolster support – because his party could lose the Ontario election”

        Frankly, you know nothing about Canadian politics.

        Trudeau’s party is the federal level Liberal Party and won’t participate in a provincial election.

        A federal party and a provincial party are different entities, even if they share phrases such as “Liberal” or “Conservative”. They may have completely different policies. For example, the Alberta NDP is all for building new pipelines while the federal NDP is all against it.

  • avatar

    How Japanese consider American cars unreliable while Americans consider Japanese cars reliable? Should there be a parity?

    • 0 avatar
      Luke42

      …And Europeans consider Volkswagens to be reliable.

      Having local mechanics who are expert in supporting that type of vehicle can really help make up for deficiencies in the vehicle. Also, differences in the driving environment and duty cycle can make a big difference, too.

      As far as I know, GM’s dealer network in Japan is almost non-existent, and don’t really match the Japanese customers’ expectations. (Based on articles I’ve read from TTAC authors who’ve lived in Japan.) If you can’t get parts or troubleshooting information quickly, something that would be a small problem for a Chevy owner in Denver becomes a big problem for a Chevy owner in Kyoto.

      • 0 avatar
        Peter Gazis

        Luke42

        Most of GM’s 29 Cadillac/Corvette/Camaro dealerships in Japan are located in and around the Tokyo metro area. Limited product lines and geography overcomes any parts problems.
        -or-
        Just have Amazon Fedex the parts. They should arrive in a day or 2.

  • avatar
    vehic1

    Hummer: I have bad news for you – the polls in 2016 were about right; Hillary won the popular vote, which is what is polled. trump only won the electoral college by VERY close wins in 3 states – PA, MI, and WI. The electoral college is not utilized in any other election but presidential; not a factor in 2018.
    thornmark: Republicans ahead, Gallup 9/24/18? On what planet?

    • 0 avatar
      Hummer

      The popular vote has never been how Presidents are decided in this country, additionally we see now that voter fraud and illegals voting in that election nearly affected a duly elected official from getting his chance. Any poll that estimates who will win does so using the method that actually elects the president, it does not measure the likelihood of a win based off of a simply majority.

      Regardless as you mentioned the method to elect President is not in play here. What is most important is action, as actions speak louder than words, and Trump has produced action and is leading this country to a better future. Record low unemployment, over 4% growth(muh magic wand), fixing broken trade, and lowering taxes are just a few examples of why the right will sail through this election; obstructionist games by the left and rolling out Anita Hill 2.0 just hurts any chances of the left making gains this election.

    • 0 avatar
      thornmark

      this planet

      Republican Party Favorability Highest in Seven Years
      https://news.gallup.com/poll/242906/republican-party-favorability-highest-seven-years.aspx?g_source=link_NEWSV9&g_medium=TOPIC&g_campaign=item_&g_content=Republican%2520Party%2520Favorability%2520Highest%2520in%2520Seven%2520Years

      “Republican favorability at 45%, Democrats at 44%
      Democrats generally have had the upper hand in favorability ratings
      Major gains for Republican Party within the party, including leaners
      WASHINGTON, D.C. — Forty-five percent of Americans now have a favorable view of the Republican Party, a nine-point gain from last September’s 36%. It is the party’s most positive image since it registered 47% in January 2011, shortly after taking control of the House in the 2010 midterm elections. Forty-four percent give the Democratic Party a favorable rating.”

    • 0 avatar
      stingray65

      vehic1 – the problem the polls faced in 2016 and currently for the mid-terms is social desirability bias. The media constantly belittles Trump and his supporters (aka the deplorables), and as a consequence when the pollster calls a MAGA voter they either choose to not respond or lie and say they will vote D instead of R, which means they undercount Trump/Republican support and pollsters get surprised on election day. The only poll that got the 2016 election correct used a projective technique that asked respondents who they thought their neighbor would vote for, which boosted the Trump count something like 5%. Thus I think a betting man would be very smart to put a substantial sum on the Republicans holding the House and picking up a few seats up several Senate seats.

  • avatar
    Kendahl

    I have a feeling the Japanese government could give Trump everything he wants, short of guaranteeing sales, and it still wouldn’t be enough for American vehicles to penetrate the Japanese market. Japanese buyers don’t want them whether for good reasons or bad.

    • 0 avatar
      Hummer

      Short of giving American vehicles a waiver on displacement (and vehicle size) taxes I would tend to agree if past evidence is any indication. Who knows maybe the goal is to just double current uptake, double of very little is still very little.

    • 0 avatar
      SSJeep

      I have been to Japan several times, and I do see a few American cars here and there. But I do agree that the average Japanese consumer will not look at American cars unless they are built in America by a Japanese company and exported.

      Streets in Japan are narrow and crowded for the most part, fuel is expensive, and there are pedestrians everywhere in big cities. Add to that an awesome, efficient public transit system, and one really doesnt need a car for most daily activities. So most folks get a small car for the odd weekend errands and leave it in the driveway most of the time. That is why we are getting ’90s JDM Skylines and Aristos with <20k miles here in the States regularly.

      I have seen several Jeep Wranglers in Japan and they do stick out from the crowd. I have seen a couple Grand Cherokees as well. I have never once seen an American pick up truck or large SUV.

  • avatar
    Sub-600

    Punxsutawney Phil gives Hillary a 1.7% chance of being elected dog catcher in Chappaqua, NY. Nostradamus has her at 2.4%.

    • 0 avatar
      Luke42

      Hillary is history. Trump is president.

      Your problem now is that you guys elected the joke candidate.

      Trump was laughed at by the world’s leaders when he tried to BS the UN General Assembly the same way he BSes the ignorant & gullible folks who attend his rallies. The world leaders who attend the UN General Assembly are serious people, which means they are not the kind of crowd that Trump knows how to address.

      You can’t blame Trump’s incompetence on Hillary. She’s history. Trump’s your president, and your problem.

  • avatar
    pdog_phatpat

    And here we have ANOTHER example of babies who just cant stop crying. And THATS the reason you’re gonna lose…again. :)

  • avatar
    BigOldChryslers

    > After months of relative silence, Canada was forced back into the fray after Mexico and the U.S. reached an agreement, announcing their intent to finalize that part of the NAFTA deal before October.

    Correction: Canada was not “forced” into the fray, the Canadian team was shut out of the talks between the US and Mexico.

    According to the Mexicans, they thought they were only holding bilateral discussions to work out details on the auto industry. Canada was initially supportive of this, because Canada is in the same position as the US when it comes to the auto industry… bleeding jobs to lower paying jurisdictions like Mexico.

    However, the US negotiators then continued to negotiate other parts of the agreement with Mexico, without inviting Canada to the table. It appears that it was the US negotiators strategy to railroad the Canadians.

  • avatar
    DougD

    I think that most of the above comments illustrate why Canada is wise to play it slow. Who wants to deal with an entire country that can’t stop bickering about politics and concentrate long enough do a reasonable deal?

    If George Washington was still alive he’d say “If all of you kids don’t be quiet I’m turning this station wagon around and NOBODY’S going to Disney World”

  • avatar
    IBx1

    Train
    Don’t
    Stop

  • avatar
    CoastieLenn

    Has our country always been this divisive and divided and I’m only old enough to see it over the last decade or is this a (relatively) recent turn of attitude?

    I can’t say I agree with everything the POTUS does, but never do I remember seeing a President making so many strides to improve a countries shortcomings- whether you agree with the approach or not doesn’t change that the issues being addressed are ACTUAL issues, and so many people within his country just completely smash everything and anything that rolls out.

    • 0 avatar
      darex

      It’s completely irrational, hence the term “Trump Delusion Syndrome”. Alternatively, it fits the definition of “sedition.”

    • 0 avatar
      Astigmatism

      Your perspective on Trump probably hinges largely on whether you believe that what he’s addressing are, in fact, actual issues.

      For example, Trump and his supporters believe that international trade generally, and trade deficits in particular, are a threat to our economy. Economists, business leaders, more highly educated and competitive workers, and people in border states tend to disagree.

      Similarly, Trump and his supporters believe that there is some sort of immigration crisis, while the rest of us believe that the only immigration crisis is the one Trump is creating.

      By contrast, large parts of the country believe that income inequality, climate change, union-busting laws, and inequality based on race and gender are actual issues, while Trump and his supporters disagree.

      • 0 avatar
        CoastieLenn

        @astigmatism- The only part that I can actual speak to is the immigration part. I don’t know where you live but having lived in SE Texas for 4 years, I can tell you 100% that flooding borders are a problem, and reading about the local economies via a long distance microscope doesn’t show the true story until you subject yourself to actually living in that area. This isn’t the proper platform for an in depth discussion, but immigration (and in the same vein, drug interdiction from the south) does need a drastic overhaul with heavier enforcement. Is a wall a solution? Probably not, but again, different subject, different day.

        • 0 avatar
          TDIandThen....

          The thing is there are facts, research, and analysis on each of these issues and most people don’t have time to find the facts do the research or engage the analysis, so they believe what people they consider more informed tell them. It is absolutely NOT a question of belief, unless you mean believing other people. One can do the research or alternatively choose a journalist or outlet which experience has shown has done good work.

          Coastie is making a claim but not having it up with facts, analysis or research. That’s fine but is not something to believe or at the very least not to accept as true.

          Language matters. History matters. Context matters. I don’t think any of you are disputing those principles.

          For me another key marker to consider is that overall the most educated tend to be left-leaning.

          This is why the thing which concerns me most of all is that attitude of my ex-Soviet friends infecting the US and Canada now: that there is no real and true fact out there, that all information is perverted by power and that there’s no point to trying.

          If you believe in the United States, you cannot support that position.

          • 0 avatar
            CoastieLenn

            @TDI- easy there hombre. I never said I was pushing an opinion that anyone else should take as their own. Facts and figures do fantastic work to support claims and theories, but they don’t compare to immersing yourself in the world that comes into question. My experience with immigration comes from actually living in an area most effected by it, both in terms of drug trafficking and actual illegal immigration. Like I told the other poster, I don’t know where you live but I’m sure its easy to make an assumption based off research that others have done (likely not done first hand) from Wisconsin or even some province of Canada. It’s much more difficult to have your immigration assumption (formed when I lived in NY) completely turned on its heads when you actually live with it and interact with it. Sometimes, just sometimes, your “research” and “theories” based off what you read and deem worthy to take as fact turns out to be totally opposite of the truth once you actually live it.

            I understand the flaws in anecdotal evidence, which is why I don’t usually partake in arguments on the internet, I simply stated that something that I personally lived daily could potentially be a much more concrete fact than what people can read on the internet written/postulated/researched/publicized as truth to fit the researchers opinion.

            Like you said, there is no truthful information out there anymore.

    • 0 avatar
      Art Vandelay

      I remember bitter hatred for Reagan, Clinton, W, Obama, and now Trump so yeah. Go back and listen to the 80’s talking heads. You’ll be convinced Reagan is going to get you nuked. So to answer your question, yeah…pretty much.

  • avatar
    JimZ

    “The focus of these talks will likely be automotive in nature. Trump has remained oddly fixated with convincing Japan to sell more American-made models ever since taking office, and the Land of the Rising Sun doesn’t want itself saddled with import tariffs.”

    Not gonna happen. First off Japan’s new car market is well covered by their domestic automakers. Second, the Japanese consumer is much more likely to patronize Japanese companies, unlike idiots like us who think we can throw our domestic manufacturing into the gutter and still have our cake *and* eat it too. Third, those in Japan who *do* choose a foreign make tend to lean more towards premium Euro brands which are both appropriately sized for their roads and carry more prestige than a mass market American brand.

    It’s sad, really. In nearly every other industrialized country, consumers tend to stick with brands and items from their home country when they can. We, on the other hand, take whatever’s cheap and then cluelessly whine that the jobs are gone.

    • 0 avatar
      Robbie

      “We, on the other hand, take whatever’s cheap and then cluelessly whine that the jobs are gone.”

      I’d say: we are rich enough to let others do the unpleasant and not very profitable job of turning steel into cars.

    • 0 avatar
      Art Vandelay

      Jim is right on. We buy cheap, weather it means keeping a group of people in virtual slavery for a .49 cent head of lettuce or saving a couple hundred on that TV at Walmart at the expense of the middle class.

  • avatar
    jjster6

    I see a lot of name calling on both sides. Exactly what the true enemies of the US want. Shame on all of you.

    • 0 avatar
      highdesertcat

      The defeated are very unhappy with the events unfolding. The winners relish the power they now possess to reshape America. I believe it will get a whole lot worse, especially for China, before it gets better.

      There is nothing anywhere anytime that has mandated that the US cannot have bi-lateral free-trade agreements with other nations.

      NAFTA was just a pigment of someone’s wet dream stain way back last century that resulted in the US being at a disadvantage vs Canada and Mexico in this pact, and even more disadvantaged with China and the EU.

      President Trump is changing that. And I say “Good On Him!” Let’s do away with tariffs, levies and what-not, and trade freely among trading partners.

      And if no agreement can be reached, stop trading, find other willing trading partners. Bring manufacturing, jobs and self-sufficiency back to the US.

      • 0 avatar
        jjster6

        The defeated? You speak of your fellow Americans as the enemy. Very sad.

        Get worse for China? You know that deficit that the US runs? Who is funding that? Trump is taking a dump on his bankers front porch daily. China has shown remarkable restraint but the day is going to come that they don’t show up at the T-Bill auction with their checkbook open. That will cause a credit freeze. 2008 is coming again. I’m afraid you’re missing the big picture.

        • 0 avatar
          pdog_phatpat

          What’s sad is a certain group of whiny babies calling the “other side” communists and traitors just because they lost. Dont talk about “fellow Americans” when you dont know what that is, baby.

        • 0 avatar
          Art Vandelay

          “If Latinos sit out the election instead of, ‘we’re going to punish our enemies and we’re going to reward our friends who stand with us on issues that are important to us’ — if they don’t see that kind of upsurge in voting in this election, then I think it’s going to be harder,”

          – B.H. Obama

          In response to a question about which enemy each candidate is the most proud of (Roosevelt once asked to be judged by the enemies he’d made). Hillary Clinton said the following:

          “Well, in addition to the NRA, the health insurance companies, the drug companies, the Iranians. Probably the Republicans.”

          Course he’s just some random dude on the internet. Worst he can do is insult you anonymously should you become his enemy. The sitting President…thats another matter. And Hillary?! Well lets just say she has a lot of dead former enemies.

  • avatar
    thelaine

    Well, it looks like Canada is signing on to USMCA, the new NAFTA. Who could have predicted that all of the rough talk was just part of the negotiation and that there was too much money at stake to permit anyone to kill a new deal? Answer: Any adult. Sorry, TDS sufferers. Everything is fine. Time to get back to Russian collusion.

    Welcome aboard, Canada.


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