It was widely reported that Donald Trump confronted Canada’s prime minister Justin Trudeau over his country’s trade surplus with the United States. Trump was mocked in these stories, since they claimed the Canada actually has a trade deficit with the United States. When confronted with this alleged fact, Trump boasted about just making up numbers in his exchange with Canada’s prime minister.

It turns out that Trump is actually correct about Canada’s trade surplus with the United States. The Commerce Department data that reporters used to show a trade surplus includes re-exports. These are items that are shipped through the United States, but are not produced in the United States. For example, if a German car company ships 1000 cars through New York, and 100 of these end up in Canada, the 100 cars would be counted as U.S. exports even though they were not produced in the United States.

The United Nations has a data base which separates out re-exports. When this is done, Canada’s deficit turns into a surplus in the neighborhood of $20-$30 billion. This means that Trump was correct in his charge.

To be clear, this doesn’t excuse the president meeting another head of government and not knowing what he is talking about. Nor does it necessarily mean Canada is doing anything wrong because it has a trade surplus with the United States. (We could address this by reducing our oil consumption.) Donald Trump may not care about getting his numbers right but the rest of us should.

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