St. John’s NL — Asked to discuss how the North American political landscape will shape the decisions made by supply chain professionals, Globe and Mail senior political writer John Ibbitson stated that it’s all about the three Ts.
“Trump, Trudeau and two-point-one [2.1].” he told attendees at the 2018 Supply Chain Management Association national conference in St. John’s.
When it comes to Trump, the most recent threat has come in the form of proposed auto tariffs on automobiles and automotive parts, which would be devasting for the Canadian auto manufacturing industry, according to Ibbitson, who recently authored a biography of former Prime Minister Stephen Harper.
“Auto tariffs, combined with those already imposed on steel and aluminum could mean 76,000 jobs lost and see the price of a car increase by 25 per cent.
“Common sense says Congress won’t allow it,” he said, but Trump has shown a willingness to disregard international trade standards and has threatened to leave the World Trade Organization.
“The U.S. could withstand the job loss,” said Ibbitson, pointing out it would be less than one per cent of the total workforce and the fact that unemployment is at its lowest level since the 1970s.
“It would be hard on the Americans, but it would be twice as hard on us.”
On Trump’s increasingly possible trade war with China, Ibbitson commented that making enemies of allies such as Canada, Europe and Japan won’t make China trade more fairly.
What can our government do? Ibbitson posited that perhaps Trudeau’s government make the U.S. “it’s last best offer,” which would include concessions on the sunset clause, supply management and the rules of origin.
“If the Americans reject our offer, then we will know that Trump wants to dismantle the Western alliance, formed by the U.S. after the Great Depression, which produced globalization.
“They believe the alliance no longer works to their benefit and they prefer bilateral trade agreements.”
Trump’s stance on NAFTA has created political unity in Canada, as politicians of all stripes have rallied to the cause. It has also created an opportunity for Canada to make our trade more horizontal and less vertical, by diversifying our trade relationships, said Ibbitson, pointing to the CETA and TPP trade agreements.
Speaking about Canadian Prime Minister Justin Trudeau, Ibbitson described his election as being based on what he calls “The Grand Bargain” in which Trudeau and the provinces agreed on the implementation of a national carbon tax.
“It didn’t work.”
Ibbitson added that if the tariffs go through, it could trigger a recession, something Trudeau’s government isn’t prepared for.
Ibbitson’s third T—2.1—represents the fertility rate that allows a population to replace itself.
Citing research he and colleagues did over the past two years, to be published in book form next year, Ibbitson claims United Nations predictions that the world’s population will reach 11 billion by the end of the century are incorrect and that it will top out at 9 billion, before beginning a decline.
It’s not just Western democracies like Japan and Italy that are witnessing population declines. Ibbitson says countries like Russia and Brazil will start seeing population declines over the next 10 years. China, in fact, may lose half its population over the next 80 years.
Why? Ibbitson, says their research pointed to urbanization, the decline of religion and education as the three main drivers of population decline.
The consequences will be mixed, Ibbitson predicted, saying the environment will benefit, while a shrinking labour force will reduce the number of consumers for goods and services. When it comes to security, China may not overtake the U.S. as the world’s leading power.