Who cares if a chinese firm buys a us or canadien firm? If they are pumping oil then they are increasing the size of the balloon in my previous example. It doesnt matter who is buying or selling, just that there are buyers and sellers. It's a commodity product for crying out loud.

All of this government intervention makes my head spin....yowsers. If the Canadiens want to subsidize xyz industry, I don't care. All that means is that the Canadien taxpayers are paying Americans to by xyz product.

We should unilaterally get rid of subsidies and all trade barriers (to be fair most trade barriers are low or non existent).

Let's take a look at the nuts and bolts of comparative advantage. Let us assume there is country A and country B. Let us also assume that they both produce W and Z in these quantities before trade:

   A    B
W 10    20
Z 20    50

So in a year A can produce either 10 W, 20 Z, or some combination.

As you can see B is more productive in producing both products than A. Can B still benefit from trade?

So let's say they decide to produce in any given year without trade:
   A    B
W 5    10
Z 10    25

If they specialize and produce:
    A    B
W 10    5
Z 0    50

Then they can trade to get:
    A    B
W   5    10
Z   15   35

Note that A now has 5 more Z and B now has 10 more Z even though B is better at producing both items.

We should get rid of all trade barriers unilaterally!!!!