Quote:
Originally Posted by Mathgod
If you operate a store, I walk in and I buy something from you, am I "subsidizing" you? No. You provided me with something I need or want, and in exchange I paid you the amount of money that made it worth your while. It's a mutually beneficial transaction. There's no subsidizing going on. Same thing with trade. The idea that a trade deficit means you're subsidizing the other country, is nonsense.
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Yup, there is no logic to his train of thought.
On top of that, the U.S. has the 3rd highest population in the world and is one of the wealthiest countries. Of course they are going to buy more stuff from countries that have fewer people and less wealth. That's how it works. They can't match you dollar for dollar.
In the case of Canada, they have 10x the population as us and if you took oil out of the equation, they actually had a trade surplus with us on mostly everything else, which is actually pretty phenomenal. So if he thinks that means subsidizing, then we were subsidizing many of their industries. When you add services into it, which many of these trade surplus/benefit charts don't include, it skews it even more as we use way more services from the U.S. than vice versa.
Even if one doesn't want to separate oil from it and just look at total deficit, the oil imported from Canada is to keep Americans working. All those jobs make it a net benefit for them. Looking at it as a simple trade surplus or deficit doesn't account for the spin off benefits.
Canadian tourists also spend about $20 billion a year in the U.S., which is certainly going to fall after all this.