CAN-USA Tariff Strife (split from various pol threads)

[brihard]

After securing a long term cash flow from Japan by selling it LNG Trump has now secured another cash flow from India selling it oil.

Trump and Modi agree to make U.S. top supplier of oil, replacing Russia

U.S. to sell F-35 to India, extradite Mumbai bombing suspect

asia.nikkei.com

Modi hails Trump ‘mega-partnership’ as leaders agree US-India energy deal

New announcement comes after Trump attacked India over climate for American businesses

www.independent.co.uk

India is also in the market for F35s.

....

So Trump is now selling our oil and gas to Japan and India..... still no business case.

Any additional exports of U.S. oil and gas will tend towards necessitating continued imports from Canada so that supply and demand balance out. That simply belies the process of tariffs on these products; the U.S. is leveraging comparative advantage in goods and services, and profiting off the more efficient allocation of those goods permitted when tariff barriers are reduced or eliminated.

 

[suffolkowner]

After securing a long term cash flow from Japan by selling it LNG Trump has now secured another cash flow from India selling it oil.

Trump and Modi agree to make U.S. top supplier of oil, replacing Russia

U.S. to sell F-35 to India, extradite Mumbai bombing suspect

asia.nikkei.com

Modi hails Trump ‘mega-partnership’ as leaders agree US-India energy deal

New announcement comes after Trump attacked India over climate for American businesses

www.independent.co.uk

India is also in the market for F35s.

....

So Trump is now selling our oil and gas to Japan and India..... still no business case.

selling F35's to India seems like a mistaken move IMO

 

[Fishbone Jones]

I hope this is in the right spot. This guy has some very valid points, especially about Trump’s tariffs. He's putting them on everyone. Not just us. He's believes he's protecting the US. His number one job.

76K views · 23K reactions | Watch till the end…. My unpopular opinion on the 51st state situation. What do you think? 👇🏼 | Kaylor Betts | Top 1% Podcast Host

Watch till the end…. My unpopular opinion on the 51st state situation. What do you think? 👇🏼.

www.facebook.com

 

[Remius]

selling F35's to India seems like a mistaken move IMO

What could go wrong…

 

[daftandbarmy]

Like an official list? Likely not. And I bet there are even differences in whatever list between certain provinces.

But regulatory differences are and can be trade barriers.

Heck, language laws are trade barriers

There are thousands of them and I'm guessing the lack of a 'list' might be one of the issues

Results for Canadians - Intergovernmental Affairs - Canada.ca

Types of trade barriers that exist.

www.canada.ca

 

[Remius]

There are thousands of them and I'm guessing the lack of a 'list' might be one of the issues

Results for Canadians - Intergovernmental Affairs - Canada.ca

Types of trade barriers that exist.

www.canada.ca

The good thing is that it looks like the three things Anand is looking to deal with, with the provinces might actually hit a lot of them.

 

[Good2Golf]

Any additional exports of U.S. oil and gas will tend towards necessitating continued imports from Canada so that supply and demand balance out. That simply belies the process of tariffs on these products; the U.S. is leveraging comparative advantage in goods and services, and profiting off the more efficient allocation of those goods permitted when tariff barriers are reduced or eliminated.

It would be interesting to know the grade of oil being sold to India - WCS or WTI?

Canadians should be hearing from both Poilievre and the next PM, what the intent to export WCS and gas is. We are a CAD short and a decade late at this point.

Could also find out the price they agreed and apply an export tariff on outgoing WCS that makes US have to sell its own WTI…

 

[Brad Sallows]

I don't see any Liberal politicians smart mouthing Trump or the Maga Conservatives anymore, can't imagine why

But really, whether it's Poilievre or PM Careny, one of them needs to tell Trump to STFU about the 51st state crap and Tariffs. If he's going to drop Tariffs then do it already. Just stop mentioning it every 6 hours.

Our own people ought to stop doing that, too. Talk less about "51st state" nonsense, and more about which internal trade restraints they have actually removed, instead of hinting that something might be done about them "Tuesday fer sure".

Politicians like to get out in front of a parade to embellish their own electoral fortunes, and the anti-tariff, pro-Canada parade is an obvious and commendable one. It's clear that the "crisis" is being exploited as a political "opportunity" by some.

 

[daftandbarmy]

The good thing is that it looks like the three things Anand is looking to deal with, with the provinces might actually hit a lot of them.

And then there's the lingering impacts of NAFTA, which will take years to unravel if we attempt to build stronger west-east trade .... looks like John Turner was right:

How Canada Got Hooked on the U.S. Economy​

On Jan. 2, 1988, U.S. President Ronald Reagan and Canadian Prime Minister Brian Mulroney signed a revolutionary free trade deal that removed tariffs on goods and services across the world’s longest border.

The treaty was not controversial in the U.S., but many Canadians feared it would eventually lead to a loss of political independence. During the election later that year, Mulroney had to fend off accusations that he sold Canada out.


“We built a country east and west and north,” said Liberal leader John Turner during the key TV debate. “We built it on an infrastructure that deliberately resisted the continental pressure of the United States. For 120 years we’ve done it. With one signature of a pen, you’ve reversed that, thrown us into the north-south influence of the United States and will reduce us ... to a colony of the United States, because when the economic levers go, political independence is sure to follow.”

Mulroney handily won the election, and the free trade deal survived. But 36 years later, as President Donald Trump repeatedly threatens to make Canada the 51st state, it is starting to look like Turner had a point.

How Canada Got Hooked on the U.S. Economy

Canada is incredibly reliant on access to U.S. markets. It didn't have to be this way, writes Stephen Maher.

time.com

 

[Kirkhill]

Why is Trump pushing foreign sales so hard? For the same reason that he is pushing tariffs.

The real reason Trump is waging a global trade war

Underlying the US president’s tariff threats is an uncomfortable truth: America needs cash

www.telegraph.co.uk

In the middle of Donald Trump’s tornado of tariff announcements, policy analysts have been clinging to a single hope.

There is a perceived wisdom that the US president is using the higher charges primarily as a threat designed to extract concessions from his trading partners. Or in other words, that his bark will be worse than his bite.

Trump certainly is using tariffs as a negotiating tactic to bring world leaders to their knees. But optimists are overlooking a second truth: the US president is also desperate for cash.

America’s public finances are shot. The deficit is the highest since at least 1975 outside of a crisis period. Debt is on track to grow at double the rate of the economy in the decades ahead.

1975 was the era of the Oil Crisis and Nixon pulling the Dollar off the gold standard completely. Since then everybody has been forced to bet on the strength of the US economy.

The US federal deficit in the 2025 fiscal year will be $1.9 trillion, or 6.2pc of GDP, according to the Congressional Budget Office (CBO) – not too far off from double the 3.8pc average over the last 50 years.

It is a problem that is not going away. By 2035, the deficit will be $2.7 trillion, or 6.1pc of GDP.

“The starting point is that the US fiscal position is pretty awful,” says James Knightley, chief international economist at ING bank.

The deficit means borrowing will keep rising. The Government Office of Accountability (GAO) warned in February that the US government faces “an unsustainable fiscal future”.

By 2027, debt will hit an all-time high of 106pc of GDP. “If unaddressed, it will grow more than twice as fast as the economy and reach 200pc of GDP by 2047,” the GAO said.

“All the literature talks about the US having this exorbitant privilege – the ability to finance very large deficits at low interest rates with a strong currency. The truth is that none of us know when this runs out.

“But we know that we’re playing with fire because we know it’s not infinite,” says Brooks. “The fact that markets have not yet priced this does not mean that they won’t price it tomorrow.”

Even Trump will need to kowtow to bond vigilantes.

Dollar Rises as Trump Vows More Tariffs to Support US Growth

The dollar climbed to the strongest level in two months as former President Donald Trump defended proposals to dramatically raise tariffs on foreign imports.

www.bnnbloomberg.ca

Trump's treasury pick vows to protect dollar's reserve status

Treasury nominee details economic reforms, trade tariffs, and tax priorities for new administration

www.wealthprofessional.ca

https://www.reuters.com/markets/us-looking-currency-manipulation-tariff-row-treasury-chief-says-2025-02-14/

...

So, to improve his balance sheets he is looking at increasing revenue by selling hydrocarbons (both his and ours), and by imposing tariffs.
He also aims to improve the US as a destination for investment by lowering taxes.
He intends to offset the costs of tariffs and lower taxes by adjusting the strength of the dollar.
He has quite the balancing act if he wants to keep the markets happy.

Meanwhile - It wouldn't be out of character to try to impose countervailing costs on competitive economies, especially the costs that he might feel have been unfairly borne by US consumers. 5% on defence wouldn't be far off the post-WW2 average cost carried by the US since WW2.




....

Tariffs, trade agreements (CUSMA) and defence are all linked and all will be part of the final Trump bargain. A strong man can sit back and wait to be hit, secure in the knowledge he can absorb the punch. A weak man needs to manoeuvre more aggressively.

 

[brihard]

It would be interesting to know the grade of oil being sold to India - WCS or WTI?

Canadians should be hearing from both Poilievre and the next PM, what the intent to export WCS and gas is. We are a CAD short and a decade late at this point.

Could also find out the price they agreed and apply an export tariff on outgoing WCS that makes US have to sell its own WTI…

I don’t believe India has any refineries set up to process heavier WCS? It’s not interchangeable.

 

[Kirkhill]

selling F35's to India seems like a mistaken move IMO

Unless you believe, like Musk and the CEO of Anduril, Brian Schimpf, and its founder Palmer Luckey, that there are better ways of doing things.

 

[Brad Sallows]

How Canada Got Hooked on the U.S. Economy

They got hooked on our products, too. The more intertwined, the harder it is for either country to try to take advantage of the other without hurting itself. This consequence buttresses the argument for letting Americans feel the damage inflicted on them by Trump and take their own corrective measures, while we refrain from imposing more damage on either them or ourselves.

Trading with a neighbouring country across a long lengthwise land border to which most of our population is close is always going to be an obviously preferable option irrespective of trade agreements.

 

[brihard]

selling F35's to India seems like a mistaken move IMO

I still doubt it would happen - there are far too many grown ups at the table when it comes to foreign military sales - but the fact that Trump would even get to the point of saying it out loud is concerning. It’s a truly idiotic notion and one that never should have even been on the radar (lol sorry!).

 

[Kirkhill]

Hegseth Says DOD to Reform Foreign Military Sales Process

Learn about the plans by the Department of Defense to reform the foreign military sales process, according to Sec. Pete Hegseth.

executivegov.com

“We need to reform that process so it’s quicker, so a request today isn’t delivered seven years from now but three years from now with less red tape and with the most efficient and effective technology possible.”

In 2023, Congress, the Pentagon and the State Department created a tiger team to accelerate the process and remove barriers. In June 2023, a memo ordered the agencies to implement the tiger team’s recommendations.

These include improving the Defense Department’s understanding of ally and partner country requirements, providing them with relevant priority capabilities, and increasing the efficiency of technology release review processes.

Despite efforts by the tiger team to streamline sales approval, the challenge of the industry’s manufacturing capacity not keeping up with orders remained.

...

If there is a willing buyer, the US is a willing seller.

 

[brihard]

Hegseth Says DOD to Reform Foreign Military Sales Process

Learn about the plans by the Department of Defense to reform the foreign military sales process, according to Sec. Pete Hegseth.

executivegov.com

...

If there is a willing buyer, the US is a willing seller.

Depends on how much they’re worried about safeguarding cutting edge technology and capabilities.

 

[Kirkhill]

Depends on how much they’re worried about safeguarding cutting edge technology and capabilities.

Agreed. But there is a 400 lb gorilla in the room with a wrecking ball and he is on a mission.

As the Anduril CEO was explaining - the intent is to break the 30 year procurement cycle and convince DOD and Congress to start buying off the shelf on a sub-5 year horizon.

 

[Good2Golf]

I don’t believe India has any refineries set up to process heavier WCS? It’s not interchangeable.

Exactly, which if we include that factor as we do our Estimate, leads us to deduce that America is likely assuming…yup…assuming that its flow of WCS into its own refineries will continue unabated for domestic consumption and its own WTI will be what it sells to India, Japan and others at significantly higher profit margins. Following this deduction leads us to assess our own course of action to include not only as rapidly as possible expanding our capacity to ship WCS to tidewater, but also consider a hasty development of pre/semi-refining in AB or BC or MB, etc., so that the product shipped to tidewater or refined at tidewater is essentially equivalent to WTI, so Canadian oil is available both as WCS to this nations that can further refine heavy crude, as well as to those nations more used to importing WTI and similar lighter crude oil.

 

[brihard]

Exactly, which if we include that factor as we do our Estimate, leads us to deduce that America is likely assuming…yup…assuming that its flow of WCS into its own refineries will continue unabated for domestic consumption and its own WTI will be what it sells to India, Japan and others at significantly higher profit margins. Following this deduction leads us to assess our own course of action to include not only as rapidly as possible expanding our capacity to ship WCS to tidewater, but also consider a hasty development of pre/semi-refining in AB or BC or MB, etc., so that the product shipped to tidewater or refined at tidewater is essentially equivalent to WTI, so Canadian oil is available both as WCS to this nations that can further refine heavy crude, as well as to those nations more used to importing WTI and similar lighter crude oil.

Is it viable to upgrade WCS via refining to something chemically comparable to WTI? Like, could we pipe it to coastal refineries, turn it into better quality oil, and ship that overseas as a substitutable product for WTI? I think that’s what you’re describing but just want to clarify. Obviously this would be very long term, but I expect that, in general, there will be an appetite for alternatives to U.S. supply… And we would benefit from alternatives to U.S. demand.

 

[Kirkhill]

Exactly, which if we include that factor as we do our Estimate, leads us to deduce that America is likely assuming…yup…assuming that its flow of WCS into its own refineries will continue unabated for domestic consumption and its own WTI will be what it sells to India, Japan and others at significantly higher profit margins. Following this deduction leads us to assess our own course of action to include not only as rapidly as possible expanding our capacity to ship WCS to tidewater, but also consider a hasty development of pre/semi-refining in AB or BC or MB, etc., so that the product shipped to tidewater or refined at tidewater is essentially equivalent to WTI, so Canadian oil is available both as WCS to this nations that can further refine heavy crude, as well as to those nations more used to importing WTI and similar lighter crude oil.

And more coal mines and coal trains .... Still lots of coal buyers out there.

The global coal market is expected to level off in the coming years due to a rise in renewable energy. However, coal trade volumes reached an all-time high in 2023.

Coal Consumption​

Over the past decade, coal consumption has declined in developed countries, and grown in developing countries.

Within the 38 countries that comprise the Organisation for Economic Cooperation and Development (OECD), coal consumption has declined by an average annual rate of 3.9% over the past decade. In non-OECD countries, coal has grown at an average annual rate of 1.4%.

Consumption in the European Union (EU) has shown the same downward trend as the OECD. Over the past decade, EU coal consumption has declined at an average annual rate of 4.2%. But, in 2022, coal consumption in the EU reversed direction and grew by 2.0%. This was a consequence of Russia’s invasion of Ukraine, and EU countries replacing Russian natural gas with coal.

The net result was a global increase in coal consumption to the second-highest level on record, only 0.01% below the record level set in 2014. Essentially, despite all the world’s efforts to reduce carbon dioxide emissions, coal consumption is as high as it has ever been.

Global Coal Consumption Returns To Record Levels

Global coal consumption has surged in the past two years and is now back to record levels. Russia's invasion of Ukraine is a primary culprit.

www.forbes.com

...

When Trump says he has everything he needs I think he means it. He can power his economy for decades on his domestic gas, oil and coal. He will sell what he can at the best price available and power his own economy with the least cost solution.

The Green Transition has been delayed. At least until the day that China, India and Indonesia stop using coal.