Trudeau, after bungling it on trade and pipelines, needs better advice

There’s no doubt Prime Minister Justin Trudeau’s been having a hard time lately — dealing with nasty remarks from President Donald Trump with regard to tariffs and fallout in connection to the Kinder Morgan pipeline project.

However, Trudeau’s handling of these important matters has been lackluster and it appears that he could use some better advice in dealing with three key issues.

First, the new U.S. tariffs on steel and aluminum, which President Donald Trump justified by reference to the national security argument for protection. In an emotional speech, Trudeau lamented Trump’s neglect of the two countries’ history of military alliances in a number of wars, and said “that Canada could be considered a national security threat to the United States is inconceivable.”

In fact, the national security argument is invoked when imports threaten the very existence of national industries producing weapons and other goods needed by the country’s military. It is argued that the global glut of steel and aluminium caused mostly by mistakes made by China’s economic planners poses such a threat as countries buy these products from China at a discount and sell them to American companies at a higher price.

This is not the place to examine the validity Trump’s argument generally and in the case of Canada. The tariffs may actually be designed to meet his election promises to the firms and workers in these protected industries rather than save them from demise. His use of the national security argument is simply a convenience since he is legally entitled to justify tariffs on this ground without having to face a possibly antagonistic Congress.

The second issue involves the purchase of the Kinder-Morgan pipeline by the Trudeau government. For reasons difficult to understand Trudeau failed to defend the policy by pointing out that it will yield a very high rate of return. Assuming that with his political reputation at stake he will get the pipeline built, the increased capacity to move oil to tidewater and sell it at world prices will eliminate the currently existing gap between the oil prices in the world and in North America caused by the current shortage of capacity to transport oil to world markets.

full story at http://business.financialpost.com/opinion/trudeau-after-bungling-it-on-trade-and-pipelines-needs-better-advice-fast