The Tariff Thread

[Bonded]

Originally Posted by Mr.Coffee

It’s about making Canada the 51st state. Pretty obvious. Everything else is nonsense.

I’m leaning towards no voting rights otherwise the Republicans don’t want Canada

[tony-soprano]

Originally Posted by TherapyforGlencross

White House describes that Canada has “misunderstood” this as a trade war. Trumps spoke with Trudeau and appears to speak with him again at 3PM.

Trump just folded and now needs time to spin it as a victory for the U.S.

[Shazam]

Y'all need to read more.

This is not chaos. This is a plan.

I am not saying it makes sense. But it's been out there plain as day for ages now. It's why markets didn't totally tank today, and why Canadian resource companies haven't done well compared to their US peers of late.

https://www.theglobeandmail.com/busi...en-so-obvious/

John Turley-Ewart is a regulatory compliance consultant and Canadian banking historian.

When this period in our country’s history is written, Canada’s initial response to U.S. tariffs – shock, talk and awe for tit-for-tat retaliatory trade rules – will measure the complacency with which we have managed trade relations. Our leaders were blind to the dynamics driving efforts by many Americans to upend the global trading system. To paraphrase James Carville: It’s their economy, stupid.

Why this U.S. administration applauds tariffs should not be a secret. U.S. President Donald Trump’s chief economist, Stephen Miran, a Harvard-trained PhD and hedge fund strategist nominated to chair the President’s Council of Economic Advisers, wrote in November “A User’s Guide to Restructuring the Global Trading System.”

He asserts that, “The deep unhappiness with the prevailing economic order is noted in persistent overvaluation of the [U.S.] dollar and asymmetric trade conditions. Such overvaluation makes U.S. exports less competitive, U.S. imports cheaper, and handicaps American manufacturing.” For Mr. Miran, tariffs can mitigate the consequences of the U.S. dollar’s reserve currency status and the openness of U.S. markets (millions of jobs losses among the working classes and blighted communities across America).

To be sure, tariffs would likely see the value of our dollar versus the U.S. dollar drop, as more expensive Canadian exports result in lower demand. This makes the greenback even more overvalued, exacerbating the problem Mr. Miran sees in the first place. And ultimately tariffs would bring inflation, Canadian leaders say. American consumers will revolt.

Mr. Miran’s answer to that is twofold. He’d introduce reduced U.S. corporate taxation, extensive deregulation as means of supporting U.S. exports despite a higher U.S. dollar. And, in his view, the higher U.S. dollar would give American consumers the additional purchasing power to absorb some of the tariff cost without stoking too much U.S. inflation.

Will a higher U.S. dollar completely nullify the higher prices that tariffs cause? Probably not. If it does, then there would be no impact on demand for Canadian exports, and thus there would be no higher U.S. dollar in the first place.

But ultimately, doubling down on the higher U.S. dollar, turning a previously unwanted situation into the solution, is precisely the goal. In Mr. Miran’s view, the United States, which gets additional revenue from the tariffs, can take whatever hit that results, and its trading partners, with a battered currency, can’t.

Tariffs are thus a means to increase “burden sharing” among liberal democracies protected by the U.S. security umbrella and to level trading relationships when partners have better access to U.S. markets than the U.S. has to theirs.

Mr. Miran wants tariffs to cause “currency adjustments.” This is a polite term for crushing the currencies of trading partners that don’t come to the table and offer to “burden share” while opening trade agreements to be more favourable to U.S. job creation. This is why, Mr. Miran says, “tariffs are ultimately financed by the tariffed nation, whose real purchasing power and wealth decline.”

He points to the 2018-19 tariffs the first Trump administration imposed on China (and the Biden administration retained) as proof his theory has merit and that it “should inform analysis of future trade conflicts.” In that case the Chinese currency fell, the U.S. dollar strengthened, and the trade deficit remained. But the important thing is that inflation was manageable, China got the message, and new revenue was raised for the U.S. Treasury, according to Mr. Miran.

We will need to come to terms with the fact that the U.S. will assess its relationship with us based on a criteria matrix that includes, as Mr. Miran suggests, if Canada “opens its markets to U.S. firms in the same way America opens its markets to foreign firms operating stateside.”

This has implications for Canadian agricultural supply management, the telecom sector, restrictions on investments, service barriers to online streaming and barriers to digital trade such as the digital service tax.

Importantly, Canadian leaders will urgently need to make the case to the U.S Administration that a “beggar thy neighbour” trade policy with Canada – which a U.S. tariff policy is – undermines Canada’s ability to “burden share” the security umbrella and support U.S. efforts to re-shore manufacturing by crippling the buying power of America’s largest export market.

There is a purpose and method behind the U.S. effort to restructure global trading systems. Understanding that purpose presents the quickest path to picking the best tools to defend Canada while preserving the best elements of our trading relationship with the U.S.

[Drak]

This op has been going on for some time. It’s why we saw the Maple MAGA convoys funded by American MAGA cash sowing division within our country, and people like Tucker Carlson and Mad Marj making threats to march on and liberate us last year or the year before that. And we have rich Canadian billionaires like Kevin O’Leary spreading anti Canadian propaganda.

[Acey]

Originally Posted by tony-soprano

Trump just folded and now needs time to spin it as a victory for the U.S.

He literally said "We will take them over by economic force" and is surprised when it's perceived as a hostile action? Ain't no way.

[Cowboy89]

Originally Posted by Slava

I haven't seen the delay for Canada, but that would be great.

This might be divide and conquer strategy. Going after Canada, Mexico, and China in one swoop with retaliations from Canada and Mexico means the price impact in the US is actually felt correlated with his actions. There's a possibility he presses Canada harder sooner to put the focus purely bilaterally on Canada.

[edslunch]

Originally Posted by Bonded

The Mexico pause and no pulling the tariffs on Canada makes me think Trump actually wants Canada as an US territory

The tariffs on Mexico are delayed because Mexico made a deal to send troops to the border. Now Trump is finally talking to Trudeau, possibly making a deal on this side?

[Fuzz]

Originally Posted by Shazam

Self-interest is the driving force of people.

Right, but rational self interest would recognize hazards to be mitigated. Irrational self interest is driven by greed.

[Shazam]

Originally Posted by Fuzz

Right, but rational self interest would recognize hazards to be mitigated. Irrational self interest is driven by greed.

By definition, the economic definition of "rational" means whatever makes sense, at the time, to the individual. Not to someone else.

You really should have taken a finance course in uni.

[Bonded]

Originally Posted by edslunch

The tariffs on Mexico are delayed because Mexico made a deal to send troops to the border. Now Trump is finally talking to Trudeau, possibly making a deal on this side?

Trudeau and Trump already spoke. The border isn’t the real issue with Canada so I am not holding my breath

[flylock shox]

Originally Posted by Cowboy89

This might be divide and conquer strategy. Going after Canada, Mexico, and China in one swoop with retaliations from Canada and Mexico means the price impact in the US is actually felt correlated with his actions. There's a possibility he presses Canada harder sooner to put the focus purely bilaterally on Canada.

That is my read of it too.

I don't think he's ever made comments about annexing Mexico either. I think it's a mistake to assume Canada and Mexico are in the same category at all.

My optimistic side hopes that Trump felt he had to squeeze Canada and Mexico more to draw attention to his border security nonsense to claim a win - that easy promises and assurances each country gave weren't noticed enough because they were so easy.

But I think pessimism is always wise when dealing with Trump, and for the moment the announcement with Mexico simply makes us weaker and we should expect him to exploit that, which is what he always does.

Regardless, there has been a fundamental shift and Canadians would be wise to recognize that even if we dodge or delay this bullet. We are essentially living next to Russia now.

[bob-loblaw]

Originally Posted by edslunch

The tariffs on Mexico are delayed because Mexico made a deal to send troops to the border. Now Trump is finally talking to Trudeau, possibly making a deal on this side?

Where are we going to get troops to patrol the border from?

[calgarygeologist]

Originally Posted by bob-loblaw

Where are we going to get troops to patrol the border from?

Can we contract Blackwater?

[Kipperriffic]

Its very important to protect Canadian institutions like Canadian banks. Trudeau needs to see through this manipulating pos and do not cave in. Canada is the only one treating him like he deserves to be. "Serious".. please.

[Fuzz]

Originally Posted by Shazam

By definition, the economic definition of "rational" means whatever makes sense, at the time, to the individual. Not to someone else.

You really should have taken a finance course in uni.

I was speaking far more holistically than just economics. Which is part of the problem, people narrow mindedly distill everything down to money.


And I took 1.01 economic courses in University.

[firebug]

Originally Posted by puckedoff

Mexico avoiding tariffs for a month anyways, likely increasing speculation that Canada's tariffs are dropped as well.

I still think there is damage done, if US drops tariffs I am still going to be checking labels and buying canadian/mexican groceries where I can, at least until Trump is out of office.

He only has to hit you once...

[Huntingwhale]

Originally Posted by MacDaddy77

Not my street but I have the same/Similar idiot in my community. Do you live in Bridlewood?

Nope, Mckenzie.

[Azure]

He can't use the bank thing as an excuse for the emergency action. So he has to combine in the drug issue when it comes to Canada. With Mexico its very different.

I mean most Canadians would probably be glad if we opened up our industries to more competition. Canada is very protectionist. Telecom, grocery section especially.

But at this point Canadians need to not give a ####. Buy Canadian no matter what happens.

[Locke]

Well...for sure we know that we cant egg the White House...thats going to be way too expensive.

[CorsiHockeyLeague]

The issue is with blanket reversals of those protectionist policies that happen too quickly a ton of people lose jobs. If the goal is increased free trade / access to the Canadian market, the terms of that can obviously be negotiated. If you impose tariffs first and try to negotiate you've not only created a situation where the political will to make a deal with you among those on the other side of the table, who need votes in a few months, is nil; you've also practically hamstrung them because the hurt you've put on them economically makes them less flexible and less able to adapt to the changes you're demanding.