Trump may have just helped Mexico's economy at America's expense

President Donald Trump continues to face political backlash over his unpopular tariffs, but that has not stopped him from pursuing a trade war with Canada that may ironically have the effect of helping a nation that Trump has arguably vilified even more — Mexico.

"One particularly perverse element of Trump’s trade strategy is that—at the moment—he seems to be taking a harder line with Canada than he is with Mexico, notwithstanding all the nasty things he’s said over the years about both Mexico and Mexicans," reported The Bulwark's Jonathan Cohn on Sunday. "That could have long-term consequences for how the auto industry grows, and more precisely where it grows, as [Michigan State University professor Jason] Miller explained."

“Distance still matters massively for manufacturing, especially for goods that weigh a lot, which makes transporting them more difficult and expensive,” Miller told Cohn. “So let’s say tariffs on Canadian vehicles go up. Then there’s going to be more imports from Mexico. And guess what? The suppliers here in Michigan, they’re not going to be supplying them like they do Canadian plants now. It’s too far.”

He added, “This is why the Great Lakes is so disproportionately exposed to trade with Canada from an auto standpoint, and it’s disproportionately Michigan.”

In addition to helping Mexico, Trump's tariffs are also hurting voters in a swing state he desperately needs to win in the upcoming midterms, Michigan.

"Michigan voters disapprove of Trump’s tariffs on Canada by more than a two-to-one margin, according to a new poll from the Detroit News and local station WDIV," Cohn wrote. "That’s consistent with the findings of a June poll from EPIC-MRA, which asked about tariffs with Canada more generally and produced nearly the same two-to-one margin against."

Cohn added, "All of this has turned the Canadian tariffs into a major issue in the midterm elections, especially in the high-profile race for Michigan’s open Senate seat. Democrat Abdul El-Sayed has a whole shtick about it in his current stump speech, wondering aloud why Trump would pick this fight when 'Canadians are the only people I know who will preemptively apologize for something they never did.' And when I caught up with El-Sayed after Monday’s parade, where he’d marched at the front of the UAW contingent, he wedged a reference to 'this dumbass trade war' into an answer about broader affordability concerns."

Overall, Cohn pointed out that Trump is disrupting a longstanding bilateral trade relationship that worked to the advantage of both America and Canada.

"It has been that way for decades, the result of an evolution that has worked out exactly like the economics textbooks say free trade should, with the suppliers in each country specializing in ways that play to their strengths, allowing them to make better products at lower costs," Cohn observed. "This year was supposed to see the auto industry ecosystem thrive even more, thanks to the opening of a second bridge linking Detroit and Windsor, reducing both the time and cost of moving material between Canada and the United States."

Experts agree that Trump's trade war with Canada has harmed America's long-term economic health.

“It's about uncertainty,” Dr. Robert J. Shapiro, a former economic adviser to President Bill Clinton, told AlterNet in July. “Every investment is based on an assessment of the likely future demand for whatever you're investing in, and how much it's going to cost to produce it. So there are assumptions about labor costs, material costs and other input costs — and again, about demand. If you have a set of arrangements that give you some confidence about the price of your inputs coming from Mexico or Canada, or about demand for goods in Canada — and don't forget, we have virtually no trade deficit with Canada; we have enormous trade, and it goes in both directions — so it's certainly right, and it's not just about investments based on these probabilities that the trade agreement can help reduce uncertainty about.”

Shapiro continued, “It's also about how much you're going to produce today, apart from investment, because you've got thousands of companies selling goods or services into Canada. And so there's uncertainty about whether this will lead to more conflict with Canada, which would hurt Canadian demand for US goods, or whether Canada will impose a new tariff in retaliation for ours that makes my goods less competitive there. Of course it's bad — it's bad for American workers, it's bad for American investment.”