David Rosenberg: There are better ways for Canada to fight back than a full-on trade war

financialpost.com:

I actually had a subscriber in the United States admonish me last week and call Canadians a bunch of crybabies and parasites.

Let me be clear.

The grand total of fentanyl that crosses the Canadian border into the U.S. is a one per cent share. Meanwhile, 90 per cent of the illegal firearms that enter Canada come from the U.S. I doubt that last number comes as a surprise to many since a Canadian can’t run out to the local hardware store and buy a Glock.

More to the point, globalization has hurt Canada way more than it has impacted the U.S. Manufacturing employment in Canada is lower today than it was in March 1977 (yes, that is the case), and factory output is below the level in June 1999. Canada’s industrial base has been totally gutted over the decades (not crying, just reporting the facts).

The reason why the U.S. has such a big trade deficit is because it is an economy built on consumerism. It is virtually the only major country in the world without a federal sales tax of some sort, and one of the few countries with a single-digit gross personal savings rate — eight per cent compared to 12 per cent in Canada.

Of course, the U.S. would have a big trade deficit for another reason: gargantuan fiscal stimulus, which has taken the deficit-to-gross domestic product ratio to double the Organization for Economic Co-operation and Development average of three per cent. Tack on the fact that Canada’s net effective tariff rate is 1.8 per cent, which is lower than the comparable 2.7 per cent rate south of the border. Not to mention that virtually all of the trade gap between the two countries is concentrated in the resource sector — basic materials (including cheap energy) that American businesses and households rely on.

This is