Friday, April 20, 2018
Business

Top Canadian official warns border adjustment tax and Trump 'Buy American' policy could hurt Florida

TAMPA — As Canada's first astronaut in space, Marc Garneau has a long history with Florida: He's visited the state more than 100 times, blasted off from the Kennedy Space Center aboard three space shuttle missions and each time safely touched down again in Florida.

This week Garneau is back, this time with warnings about what could be a bumpy ride ahead for two close friends, Canada and the United States.

"It's the best relationship between two countries in the world," said Garneau, now Canada's minister of transportation and chairman of Prime Minister Justin Trudeau's cabinet committee on Canadian-U.S. relations.

But Garneau said two proposals from President Donald Trump's administration or Republicans in Congress have the potential to undermine trade between Canada and states like Florida, where many jobs rely on tourism and commerce abroad.

The first is a border adjustment tax, an idea included in a U.S. House of Representatives tax proposal. It would impose a 20 percent tax on imports, with the new revenue offsetting deep cuts in corporate and income taxes.

The government in Ottawa would view the border adjustment tax, which is not universally embraced by Republicans and faces an uncertain future in Congress, as a tariff and a step in the wrong direction.

"This would have negative repercussions, not only for Canada, but also for the United States," Garneau said in an interview Thursday at Tampa City Hall. "It would have an effect on jobs. It would have an effect on consumer prices. It would have an effect of us, probably, if we felt disadvantaged, having to take some measures as well" — though he declined to predict what those would be.

To get the message out, Trudeau is sending cabinet members to about 15 key states to reach out to local, state and federal officials. Garneau came to Florida to give a speech at a global economic forum in Miami, and talk to leaders, including Tampa Mayor Bob Buckhorn, two deputy mayors in Miami, U.S. Rep. Gus Bilirakis, R-Palm Harbor, U.S. Rep. Charlie Crist, D-St. Petersburg, former Gov. Jeb Bush and Gov. Rick Scott, whom he ended up meeting at a Panera Bread in South Tampa.

Next week, he heads to Pennsylvania.

Garneau said another potentially troublesome policy is the "Buy American and Hire American" executive order that Trump signed Wednesday. It directs government agencies to uphold laws requiring the use of domestic goods and products for government projects. Trump says waivers and exemptions have undermined those regulations.

The order could diminish trade, affect supply chains for industries in both countries and ultimately lead to the loss of jobs, Garneau said.

"If we spend federal money in Canada on big procurement projects that are related to infrastructure we allow U.S. companies to bid on them," he said. "We would like to think that the same arrangement would continue to be the case."

Buckhorn agreed, saying the U.S. needs to recognize that it competes in a global economy.

"More trade is better," he said. "I think fair trade is better. I think we have a long-standing relationship with Canada that is virtually seamless and that ought to continue. Reverting to a protectionist mentality when it relates to trade does a disservice to everybody involved, especially the United States."

Trump also has talked about re-negotiating the North American Free Trade Agreement. Canada's government has less of a problem with that.

"Free trade deals should be reviewed every once in a while, and times change," Garneau said. "We are very ready to do that, and we will have some proposals to make ourselves."

About 3.8 million Canadians visited Florida last year, making Canada the top international country for visitation to the state, according to state statistics. Canada is also the state's No. 1 export market for agriculture, with grapefruit being the most popular commodity. Outside of agriculture, the state says Florida's top exports to Canada are mineral or chemical fertilizers and civilian aircraft, engines and parts. Its main import from Canada is oil.

Contact Richard Danielson at [email protected] or (813) 226-3403 or [email protected] Follow @Danielson_Times

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