CBC and other outlets are discussing how the trade war is impacting aluminum cans. This highlights the perverse way we’ve structured our economy and how the trade war — while disruptive and causing short-term harm — will help drive longer term structural improvements.
On first glance it could be seen as unexpected that American levies on Canadian-made aluminium could impact our own beer cans. Pretty weird, right?
But no. We export the raw Canadian aluminum to the US, and then re-import it here. This makes sense for the companies involved— they can take advantage of the abysmal worker and environmental protections in the US and lower tax rates to maximize profit. And Canadians buy the beer anyhow; most (including me) not even knowing that it’s happening.
This system allows Americans and American companies to reap much of the value, despite not actually being strictly necessary. Their “value-add” is entirely from being awful, yet it works because of the structure of international trade.
So this system is really good for the US business interests, but is really bad for Canada. In order to boost our economy we lower the price of our dollar — making us poorer, our imports more expensive— in order to subsidize the exports of raw materials. And many of these raw materials are not renewable — once they are gone they are gone forever.
With the trade war we have a new opportunity. We can process our raw materials here. Yes, it may be a bit more expensive because we have labour laws and make our companies pay taxes and try not to ruin the environment quite as much.
But that’s okay — because the price is going up regardless. Deciding to make this structural change was a difficult pill to swallow because there will be people negatively impacted and this can be bad politics. But an idiot with no understanding of economics made this choice for us— a painful experience but also a blessing in disguise.
So yeah let’s process our own aluminum, our own oil, our own lumber. Process it here; capture the value here for Canadian businesses paying Canadian taxes and hiring skilled Canadian workers.
This will be a difficult period of adjustment, there will be hard times ahead. But someday soon those beer cans will be made in Canada. And on that day, we win.
We all see where this is going, right? Anti-competitive behaviour now being framed as “USA #1” patriotism and actively defended by MAGA via tariffs and trade policy.
People outside the US need to stop using American platforms.