01.18.2017 01:13 PM

Trump to Canadian conservative fans: too bad for you, suckers!

This is the point I was trying to make on Evan’s radio show on CFRA this week: who gives a shit about Keystone when the Unpresident does this? It’ll make the NEP look like a romp in the park.

Get it, yet, Canadian conservatives? Tired of kissing Trump’s fat orange ass? You will be, soon enough.

From my former Herald colleague Caludia,  here.

Canadian oil and gas producers happy to see the end of the Obama era are quickly coming to the realization that the imminent Trump presidency could be even more challenging if he moves forward with the adoption of a border adjustment tax.

While other Canadian sectors have been vocal in condemning the proposal, “no sector … will be more affected than petroleum,” according to Colorado-based energy expert Philip Verleger, who has been studying the recommended U.S. tax code changes since last summer.

Verleger, principal of consultancy PKVerleger LLC, believes Canadian exporters of oil and oil products are in for a nasty surprise.

“Bluntly speaking, for oil the law’s passage is pure mercantilism. Exporters from Mexico, Canada, and the rest of the world could be shut out,” Verleger writes this week in a report to clients. “As Woody Allen would say, ‘Sorry, suckers’.”

28 Comments


  1. Notice: Undefined offset: 180 in /nfs/c05/h06/mnt/72829/domains/warrenkinsella.com/html/wp-content/themes/warroom/functions.php on line 314
    Ronald O'Dowd says:

    Warren,

    Trump will be another Executive Action Prez. That will limit the damage. It’s clear that he can get nothing through Congress that attempts to stymie the bible that is Free Trade for Republicans.

    But as you’ve said, real concrete pain for Canadian industries is indeed ahead.


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      Richard says:

      It’s a nice idea in theory, but in practice Congressional Republicans (with a small handful of objectors) have demonstrated all the spinal fortitude of the common jellyfish. The head of that bloom, Paul Ryan, will do whatever he can to appease his new master.


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        Ronald O'Dowd says:

        Richard,

        You could be right, but I would argue that Congress is bought and paid for — and that isn’t by Trump.


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          jay says:

          That’s so true–he never pays for anything.


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      Robert Frindt says:

      Just to inject a little reality to this discussion: if the USA were to implement a GST or VAT type tax, it would have exactly the same impact on Canadian exporters as this proposed border adjustment tax.

      A GST/VAT applies to imports, but exports are tax free.

      This border adjustment tax has nothing to do with Trump. It is a pure Paul Ryan/Kevin Brady creation and was being talked about well before Trump announced as a candidate. It’s purpose is to duplicate the import tax feature of a VAT without having a VAT.

      https://www.aei.org/publication/border-tax-adjustments-wont-stimulate-exports/

      The EU has a mandated minimum 15% VAT and Mexico VAT is currently 16%. (The Mexico VAT was 5% when NAFTA was signed and they promised not to raise it…) That amounts to 15+ and 16 percent tariffs on everything the USA exports to the EU and Mexico. While exports from those countries go into the USA duty free.

      The border adjustment tax is designed to duplicate the import tax feature of a VAT for the USA.

      Note: not surprisingly, Trump has come out against the border adjustment tax. Trump is a tariffs guy. He wants to use tariffs and the threat of tariffs selectively against specific countries, industries and companies. The border adjustment tax applies to everyone, so it is not useful as a discretionary economic weapon.
      http://www.reuters.com/article/us-usa-trump-congress-idUSKBN15234X?feedType=RSS&feedName=politicsNews

      Trump is against this. It is not going to happen. I suggest everyone save their anti-Trump hysteria for something real,


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    Tiger says:

    I voted for Hillary.

    When fellow conservatives yelled at me, I told them:

    1. NATO
    2. NAFTA
    3. TPP (which she’d have flipped back to supporting)
    4. No religious bans

    I’ll enjoy a bunch of what he does, especially including SCOTUS appointments and domestic deregulation, but I stand by my vote for Clinton.


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      Warren says:

      Good man


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      Ronald O'Dowd says:

      Tiger,

      Yeah, the much regretted nuclear option of 51 votes does not apply to the Supremes. That still takes 60 Senate votes for confirmation. (Sorry, Donald!)


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        Tiger says:

        They’ll get a solid conservative for Scalia’s seat.

        Others, it’ll depend. But people like Roberts and Alito were confirmed by similar Senates. If the Dems go to the wall, McConnell may just remove it for SCOTUS nominees too.


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    BillBC says:

    I feel exactly the same. I’m that kind of conservative too. Lay off, Warren….


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    lumbernard says:

    The reality is the US is NOT ‘energy independent’ yet. Not even close, at least for oil. Sure, they produce a lot more now but still need to import 5-6 million barrels of crude every day.
    Canada’s oil is heavily discounted compared to the world price, which is Brent Crude.
    So I would not write off Canada’s oil sector so fast, as long as the bean counters have their say.


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      daveconstable says:

      Crosses my mind that Tillerson would have a voice in oil decisions, especially oil economics with other nations, and my stereotype of international corporate executives is that they have more loyalty to their company’s bottom line than they have to an one nation’s needs – including their own. Any decision might still hurt Canadian workers, but I bet it will be good for the board room.


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    jay says:

    The problem is Trump supporters won’t own it. They use a variation on the Flip-Wilson defence–except instead of the Devil, they say Liberals made them do it. Sorry for all the posts today.


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    The Doctor says:

    A lot of people who technically qualify as “conservative” in Canada (especially Red Tories, blue Liberals, urban conservatives and fiscally conservative social liberals) would be considered liberal Democrats in the US. I certainly qualify– I’ve supported the Democrats in every US election since 1972. I also recall seeing some poll a few years back that indicated that a very strong majority of Canadian conservatives supported Obama over his Republican opponent.


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    Eric Weiss says:

    I’m a conservative. I thought Clinton was a horrible choice. But I would have voted for her if I could have to avoid this train wreck of a PeeOTUS. Most conservative I know personally feel the same way. I really don’t think there are that many Canadian conservatives who are Trump fans.


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    Bill Templeman says:

    And if Trump’s unknown plans for renegotiating NAFTA are not enough to give Alberta’s oil patch heartburn, there’s this:

    “The rush for renewables is happening – and it will continue with or without us. In the long term, failure to embrace this transition really would be economic suicide.”

    https://beta.theglobeandmail.com/report-on-business/rob-commentary/numbers-dont-lie-weve-reached-a-tipping-point-for-renewable-energy


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    bluegreenblogger says:

    I am a little surprised that nobody has noticed a wee institution called the World Trade Organisation? A ‘border tax’ is exactly what it was created to stop. I do not think that is going away anytime soon. Even if NAFTA or the earlier FTA weren’t there, such a tax would still be illegal under the WTO. Is Congress going to trash the international trading system to put a border tax in place? Will they just cripple the WTO by ignoring the inevitable rulings? I doubt very much they would do that, once they counted the costs. Right now, this is mostly noise, with a purpose, presumably.


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      Warren says:

      Trump doesn’t listen to the CIA, IRS, NSA or anyone else. It’s amusing you think he’d have any regard for the WTO.


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        bluegreenblogger says:

        I don’t think the president elect has much regard for anything other than himself. But congress is another story. How many republicans have no exporters in their districts? Pretty much zero. I doubt he could muster the support for a full on trade war with the whole world at once.


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        The Doctor says:

        His supporters (including our own Gordie) will soon be claiming that the WTO is a nest of leftists — just like the CIA.


  10. Notice: Undefined offset: 180 in /nfs/c05/h06/mnt/72829/domains/warrenkinsella.com/html/wp-content/themes/warroom/functions.php on line 314
    The Doctor says:

    Further on the differences between Canadian and US conservatives, I note that Stephen Harper gave a speech today that’s highly critical of Trump’s policies. Can’t wait for Gord to label Harper a leftist.


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      Warren says:

      He sure did. Said that Trump is about usher in uncertainty on a massive scale: http://news.nationalpost.com/news/canada/trump-poised-to-reverse-seven-decades-of-u-s-foreign-policy-stephen-harper-says


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        Dan Calda says:

        I can quibble on minor points…but this HDS afflictee thinks that was one of Harper’s best and most honest speeches in a long time. He called himself an elite…though it was subtle and fleeting…but I have to think it was there for a reason…right Ms. Leitch?


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      bluegreenblogger says:

      yes I read that. I had to pinch myself. But there is nothing startling or controversial about the basis of the international ‘order’, such as it is. The US built these institutions, in the open, for openly declared reasons. Anybody who regularly reads a paper should draw similar conclusions about what it means to try and undermine and collapse them. The fact that former Prime ministers agree is a small comfort I guess.

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