Will Trump Make Quebec Collateral Damage?

Sure as shooting, when rumours are swirling around the office and your manager or boss drops by your desk to tell you that your job is safe, it's probably time to polish up the old resumé.
So when a Donald Trump economic advisor, Stephen Schwarzman, said that Canada shouldn’t worry about the upcoming renegotiation of the North American Free Trade Agreement (NAFTA) it is perhaps time to worry just a tad.

Now truth be told, the $600 billion trade between Canada and the United States is fairly balanced, with Canada eking out a slight advantage of about $15 billion, an insignificant amount amounting to less than 2% and considering that a lot of what we export is oil products, on the manufacturing side, where the jobs are, America is ahead of the game vis-a-Canada.

Even Trump understands that his trade beef isn't with Canada, but that won't protect us from collateral damage when NAFTA is renegotiated.

Certainly poor Mexico seems to be in Trump's cross-hairs, not only over the border, but trade as well because of the $60 odd billion trade deficit in Mexico's favour.

Now I'll remind readers that a while back when the PQ proposed its infamous Charter of Values, it called for a ban on religious paraphernalia for employees in the public service, para public service and public education domain.
The real target was the Muslim hijab which sorely offended the PQ's' and many Quebecer's secular and feminist leanings.
But in order to make the law seem fair, equal and so more palatable, things like the Jewish kippah, Sikh turbans and ostentatious Christian crosses were also to be banned, a joke because you couldn't find more than a few dozen of offenders wearing these items in the public service.
Of course these people weren't the real target of the law but were deemed by the drafters to be acceptable collateral damage, sacrificed to make the law acceptable to the public, after all a law banning Muslim dress exclusively would never have a chance at acceptability.

And so in Trump's quest to punish Mexico, Canada will have to accept a small level of pain in order for his trade sanctions on Mexico to pass the smell test.

According to CTV Quebec exports $59 billion to the U.S. annually and imports $34 billion, creating a $25-billion trade surplus.

Although Canada has a trade surplus of about $15 billion in trade with the United States, it is in fact Quebec with a $25 billion surplus which is the real big winner in the trans border trade.
Remove Quebec from the equation and Canada would in fact have a $10 billion trade deficit with the USA
Fully half of Quebec's manufacturing exports are sent to the USA, and considering that oil is an untouchable for Trump (who just okayed the Keystone XL pipeline that will carry Alberta crude to the USA,) any trade sanction would likely hurt Quebec the most.

So where will Trump inflict this Canadian pain?

Certainly the ongoing dispute over lumber will be resolved to America's satisfaction, but a new initiative against Canada (and Quebec in particular) is likely to be the grandfathered protection of the entrenched dairy industry in Canada.

Quebec's monopolistic marketing agency which controls dairy production must be quaking in its boots at the prospect of coming under the mire of Trump's trade negotiators.
Quebec controls 37% of the Canadian dairy market which effectively bars imports from the United States.
Any attack on the dairy cartel that controls Canadian and particularly Quebec  production would be devastating because quite simply we cannot compete with American producers.

Prices remain high  for a variety of reasons, most importantly is inefficiency due to monopolistic policies but perversely because of the quotas attached to production. In order to produce milk, a dairy farmer must own or acquire quota, the right to produce milk, which costs between $25,000 and $45,000 per cow. I'm not kidding.
This quota saddles dairy farmers with enormous debt rendering competition with American farmers impossible.
But targeting this Canadian dairy monopoly is a no-brainer for Trump and already American dairy producers are urging the President to act.

"U.S. dairy organizations and the state departments of agriculture across the country turned to President-elect Donald Trump Wednesday to combat Canada’s existing and soon-to-be-expanded protectionist policies designed to block imports from the United States.
Joining in the plea to Trump are The International Dairy Foods Association (IDFA), the U.S. Dairy Export Council (USDEC), the National Milk Producers Federation, and The National Association of State Departments of Agriculture (NASDA).
In a letter the groups urge the president-elect and his key cabinet members to take immediate action."

Because of Quebec's disproportional percentage of the Canadian dairy market, it will be impacted to a much higher degree than other Canadian provinces and so conspiracy theorists might believe that Canadian anti-Quebec federal politicians will be inclined to give in because the pain will mostly be limited to Quebec.

I don't see any way out, so heeding Trump's henchmen telling us not to worry might not be wise, and in fact Quebec should probably worry a lot.

......Stay tuned.