WASHINGTON—Canada is not to blame for its trade surplus with the United States, President Donald Trump’s commerce secretary said Wednesday — sounding distinctly different than Trump himself.
Trump has repeatedly lambasted Canada over its trade practices, citing what he claims are “massive” Canadian trade surpluses as evidence that the North American Free Trade Agreement has been broadly unfair to the U.S. And, to the bafflement of observers of all stripes, he said in April that “energy” is one of the areas in which Canada has been “taking advantage” of his country.
Commerce Secretary Wilbur Ross disagrees. In a public appearance in Washington on Wednesday, Ross said the U.S. deficit with Canada is a “blameless deficit” that exists entirely because the U.S. does not produce enough energy to meet consumer demand.
“Within deficits, there are two categories … One is what I would call blameless deficits. For example, we are not self-sufficient in energy. So naturally we are going to have something of a deficit caused by importation of hydrocarbons. And that’s an important consideration. Because relative to Canada, that’s more than our entire deficit — comes from both hydrocarbons and electrical energy that they export to the U.S. I don’t call that blameful exports,” Ross said in an interview at the Bipartisan Policy Center.
“What is blameful are things that are subsidized, or not with a level playing field, or come from some other inappropriate source of behaviour, rather than the natural course.”
Ross made his remarks as the two countries gear up for the beginning of NAFTA renegotiation talks in August.
As always, it is unclear how much the talk of any individual Trump lieutenant matters in practice. The administration has sent mixed messages on Canada trade for months, with reassuring words from the president’s allies sometimes followed by belligerent words from Trump himself.
Canada, for its part, says it does not have a trade surplus with the US at all. Indeed, according to the US government’s own trade website, the US had the surplus last year — $13 billion (U.S.) — when both goods and services are counted. Counting only goods, Canada had a surplus of $12 billion.
Economists and many others have derided Trump’s frequent talk about trade deficits with individual countries, which are driven by market forces and not in themselves evidence of an unhealthy relationship. Trump, though, has long been fixated on such deficits, viewing them as evidence that the U.S. is being outfoxed and outnegotiated by other nations.
Ross confirmed that Trump is looking to renegotiate NAFTA at rapid speed in order to avoid complications from the 2018 Mexican elections.
The “best window,” he said, is open “until December or early January.”
Speaking before Ross, Jack Gerard, the chief executive of the American Petroleum Institute, the oil and gas lobby, said NAFTA has helped the US energy industry. He said he was not certain what Trump was talking about with his gripe about Canadian energy in April, saying Trump may perhaps have been thinking of the Keystone XL pipeline issue.