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Trump vows “America first” approach to trade

Posted: January 23, 2017

WASHINGTON, DC – Canada’s largest trading partner has inaugurated a president who pledges “America first” policies on everything from trade to security.

“From this day forward, it’s going to be only America first. America first. Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families,” U.S. President Donald Trump said in his inaugural address on Friday. “We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs.

“We will bring back our jobs. We will bring back our borders. We will bring back our wealth and we will bring back our dreams,” he added.

The speech evoked images of “rusted-out factories scattered like tombstones across the landscape of our nation”, and foreign industry that has been enriched at the expense of American companies.

“We’ve made other countries rich while the wealth, strength and confidence of our country has dissipated over the horizon. One by one, the factories shuttered and left our shores with not even a thought about the millions and millions of American workers that were left behind,” said the president who campaigned on a motto of “Make America Great Again”.

The comments reiterate themes raised during the U.S. election, when Trump vowed to renegotiate deals including the North American Free Trade Agreement (NAFTA).

Cross-border freight moving between Canada, the U.S. and Mexico amounted to $93.2 billion in the year leading up to October 2016.

While truck shipments dropped 3.1% during that time, they still accounted for 60.8% of the value of freight moved to and from Canada, the Canadian Trucking Alliance reports. Vehicles and their parts accounted for the top commodity. On their own they represented $5.2 billion in trade, 56.9% of which was moved by truck.

Gene Orlick — president of Alberta-based Orlicks Inc., and chairman of the Canadian Trucking Alliance — refers to hopes that the new president will approve the Keystone pipeline and boost his province’s oil sector and trucking industry alike. Orlicks may specialize in food and beverage shipments, but the market for that freight dropped dramatically when close to 100,000 people lost their jobs because of reduced oil production. “We don’t ship to Fort McMurray and Grand Prairie like we used to,” Orlick says, referring to the industry’s heartland.

Rob Penner, Chief Executive Officer of Bison Transport, says he is “cautiously optimistic” about how a Trump presidency will affect the North American economy. The overriding concern, though, is about any plans for “thickening” the border, he says.

Exactly how Trump will rework cross-border trade is unknown, but one potential barrier appears already to be discounted. Steven Mnuchin, Trump’s nominee as treasury secretary, said during confirmation hearings earlier in the week that the administration is ruling out an across-the-board border tax that had worried some Canadian exporters. The president’s earlier comments about border taxes referred to “a small number of companies”, he said.

Trump has also been openly critical of manufacturing operations in Mexico. Several trucking industry suppliers have established facilities there. 

Emissions

Another changing policy direction was immediately apparent on the White House website. A list of the Obama administration’s top issues, including climate change, has already been replaced with a list that includes an America-First Energy Plan. And that includes eliminating “harmful and unnecessary policies” like the Climate Action Plan.

The latter plan committed to reducing Greenhouse Gas emissions. One of the tools to achieve that has been the heavy-vehicle emissions standards set by the U.S. Environmental Protection Agency. The first phase of those standards affected Model Year 2014-18 trucks, buses and vans. A second phase, yet to roll out, would begin in Model Year 2021 and be completed by 2027.

The new limits, realized by burning less fuel, are projected to save about US $170 billion in fuel costs and 2 billion barrels of oil over the lifetime of the affected vehicles. But that would still come at a higher upfront cost. The U.S. Environmental Protection Agency estimates that Phase 2 rules will add about US $14,000 to the purchase price of a new Class 8 tractor by 2027. The cost would be recouped by fuel efficiency that improves 23-25%.

“Sound energy policy begins with the recognition that we have vast untapped domestic energy reserves right here in America,” the new energy plan adds, referring to untapped shale, oil and natural gas reserves in the U.S.

 

– The original version of this story was updated to include references to the Climate Action Plan and America-First Energy Plan

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