— Feature, Musings —11.26.2024 01:29 PM
My latest: war is declared – on us
Trump Tax™️.
President-elect Donald Trump may call it a “tariff,” but essentially that is what he is promising to impose on his first day in office: a tax. “Tariff” comes from a Turkish word meaning “prices.”
So, the price of just about everything is where the Trump tax will be most keenly felt. In his late-night post on his Truth Social platform, Trump wrote that he intended to slap tariffs “on ALL products coming into the United States.” His targets: China, Mexico and – notably – us.
For most of our history, we have been the closest allies and trading partners of the Americans. No more. If he carries through with even part of his tariff, Trump will effectively cripple the Canadian economy. He will be treating us like we are the enemy.
For Canada, the Trump Tax will mean that further interest rate cuts are over. Rates will likely need to go up, in fact, to shore up the Canadian dollar, which started to plunge the moment Trump made his announcement.
More broadly, the Trump Tax will strangle consumer spending just as the critical Christmas season kicks off. Many firms will scuttle Christmas bonuses, and not a few would now be contemplating layoffs – they’d be fools not to. Inflation will return with a vengeance, and some analysts are even quietly wondering if the Trump tax will usher in something akin to a depression.
Trump has fans in Canada, mainly on the political Right. Those partisans will dispute all of this, of course, just like the millions of Americans who ignored warnings from Kamala Harris that Trump’s tariffs would cost them, too.
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The tarriff threat is actually good news as Canada has plenty of bad policy to negotiate away in exchange for remaining witin the American tarriff wall:
-supply management
-digital services tax
-ownership restrictions on telecom
-ownership restrictions on commerical aviation
-ownership restrictions on financial services
Of course the aim should be to gain as much as possible in return for giving up the above. Oh, and Canada should also ask for a long-term softwood lumber deal
Doug,
All points are good and succinct.
James
The tariff threat makes it necessary to negotiate with the USA.
Gilbert,
You are correct with both points you’ve made. It’s only a threat (to get our attention) and negotiations are always necessary until a consensus is reached.
James
No question this is provocative to say the very least.
American protectionism has been around for Canada pretty much as long as there has been a Canada.
I couldn’t agree with Doug more on a case to be made that supply management alongside other competition crushing policies may well fall in a trade war.
I surely would have preferred Harris to Trump on cringe factor alone. Here it comes …. BUT …. I think there would be harsh protectionist policies with either scenario. We would have just felt better being screwed by Democrats who would have at least listened (heard?) before hitting us.
That said Canada got one up the ass 3 minutes into Biden administration with Keystone being canned.
Reality – we are not equals. We are the second largest nation by land mass and were the fourth strongest military after WW2 (source- today in my local paper) this dereliction alone explains why we are not held in any esteem as a defence partner. Border noise is just a distraction because we don’t see a need to punch above our weight anymore.
We’ve been hacking defence budgets for decades, we now drag our feet on intelligence so bad that our five eyes partners worry about us and we still have a pretty boy grandstanding his sanctimonious and false feminine false indigenous false integrity coalition of sycophants.
We can all shudder at how our southern neighbour chose to relive the chaos but what exactly do you figure those Americans feel about the our electoral choices?
We need to dismount from our high horse and reach out to whatever sane people exist to our south to try to restart our relationship.
“I certainly would have preferred Harris to Trump on the cringe factor alone”. “We need to dismount from our high horse…” “…and reach out to whatever sane people exist south of the border to try to restart our relationship.”
What planet do you exist on, Phil? You got the “high horse” concept correct…a lot of Canadians both think and speak out of the aperture that ‘sits in the saddle’. Now…you preferred Harris and now you want to find sanity? Better that you look in the mirror and then seek the opposite of what you see. Otherwise you won’t know what you’re looking for. Psst…watch the coverage on Monday January 20, 2025 and you’ll see “sane” being inaugurated. James
I can’t really tell if you are agreeing with Phil or not here. He is right that neither party are our friends-Keystone being exhibit one. One of my mentors used to say a much cruder version of “We would have just felt better being screwed by Democrats”. I think you can get the idea.
“I can’t really tell if you are agreeing with Phil or not here.”
Martin…FYI…I am most certainly NOT in agreement with Phil. I made that quite clear. James
James In a rational world (planet earth since you asked) one can say I have a preference but I’m VERY willing to live with the election results and move on.
I’m not saying Trump doesn’t have more than a few good points and some good policy. He just doesn’t fit the hello of a guy model.
Forgive me if I don’t genuflect, I won’t do that for Jesus and he WAS a hell of a guy!
Phil, it appears that you are caught in the trap of “identity politics” of guy models etc. And I never asked you to define “rational world” but thanks none the same. You know what “assuming” can do. At least you are being astute and honest enough to recognize the fact that President Trump has “more than a few good points and some good policy”. Much change is necessary in the American political restructuring and it won’t happen overnight…it will take time. “Forgive me if I don’t genuflect. I won’t do that for Jesus and he WAS a hell of a guy!” You lost me again, Phil. Your tangentiality is being exposed.
I welcome comments, but I do not welcome commenters turning this into a forum for commenting on other commenters. Understood?
If they’re so upset about inflation then what the fuck are they dumping tariffs on the world for –
Because most people don’t understand simple economics. They respond to the musings of a guy who ran a number of companies into the group, and has duped his followers his whole life.
As noted in the Ferris Bueller clip, tariffs drive up prices. I look forward to Americans paying $50 for a basic t-shirt, because either they slapped a huge tariff on an imported shirt, or they now have to pay American textile factory workers what North American unions demand to be paid. They sure ain’t gonna work for the wages of someone in a Bangladesh shirt factory.
Yes, they don’t realize how they are blowing up their Wal Mart/Costco cheap stuff utopia.
Part of this is that Trump supporters are actually incredibly malleable and policy agnostic (with the possible exception of immigration/border policy – though note even with that the miniscule amount of wall that actually got built and the bald-faced lie about Mexico paying for it did not cost him one iota of support among the MAGA crowd). Basically if Trump proposes it, it’s good, if Trump opposes it, it’s bad.
So inflation under Biden is bad, inflation under Trump is good. I’m skeptical any of this will cost Trump one iota of support.
The essence of Trumpism among his base is that you support Trump no matter what (because it’s really about owning the libs who hate him). It’s incredibly passive aggressive at its core.
If he applies the tried to Canadian energy it’s gonna cost him some votes when they see the price of gas rise
Not among his base. MAGA Inc will come up with some rationalization, possibly a conspiracy theory, as to why it’s someone else’s fault, not Trump’s.
Every fuckup and failure under Trump’s first term did not cost him one iota of support among his base.
Okay…let me guess: someone asked you to use the word “fuck” in a sentence?
OK, let me guess – you don’t have an actual economic argument to rebut the point being made by Curious (and by me, above) ?
Not a surprise, given that virtually every economist has predicted the same outcome when/if Trump follows through on his ridiculous tariff proposal. But lowbrow voters just chant “USA! USA! USA!” when Trump tickles them the right way.
Steve T, no need to guess. From what I read, Curious made no economic argument at all. You make more of a personal anti-Trump comment that, for me, follows Harris and Tampon Tim into obscurity. The one succinct point you make is the real economists can see the common thread in all this. It really doesn’t matter what Trump says, at this point, because the reality of time will determine what the market forces are. That will be the time to apply whatever pressure is necessary for the, hopefully, appropriate response. So…now you see why I didn’t use an actual economic argument…it wasn’t necessary. Economics was part of my studies with a Math Major and a Physics Minor with the added electives Philosophy and Economics. I was Math Class of ’72. Because Trump is playing politics now…he’s threatened tariffs as a negotiating tool; they aren’t in effect yet. And the theory of Economics has changed somewhat since the period of 1968 – 1972. We’re just going to have to see how all this plays out. It will be interesting, to say the least.
Trump has tied the tariffs to drug and human trafficking across the borders. He has said that the tariffs are meant to spur both Canada and Mexico to take steps to stop both streams. Pardo in Mexico seems to have agreed to bring resources to bear in her country, to stop the flows and avoid the tariffs. Canada would be wise to do the same.
Intcord, Excellent post. I agree with your words. The only weakness is identified with your last and very accurate words: “Canada would be wise to do the same”. That is the weak link in our chain, considering the disgrace we have trying to represent Canada on the world stage. Actually there are 2 very weak links.
Intcord, Excellent post. I agree with your words. The only weakness is identified with your last and very accurate words: “Canada would be wise to do the same”. That is the weak link in our chain, considering the disgrace we have trying to represent Canada on the world stage. Actually there are 2 very weak links.
The fact that, with such tariffs, Trump is disregarding his USMCA trade deal (which he claimed is the best agreement ever), not to mention will lead to a rise in consumer prices (e.g. oil and energy products) and an inflationary spiral, will soon be disappointing to millions of Americans.