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

[Czech_pivo]

Dougie is past his best before date.

I'm happy with this enthusiasm but his mouth does move before his brain does think.

 

[Halifax Tar]

The White House Release

President Trump Is Finally Ending Canada’s Free Ride

Canada has been ripping off the United States for decades — and President Donald J. Trump is done letting them get away with it. Last week, the U.S.

www.whitehouse.gov

 

[The Bread Guy]

Little reminder from Reagan in 1988:

Radio Address to the Nation on the Canadian Elections and Free Trade

112688a

www.reaganlibrary.gov

"... We too often talk about trade while using the vocabulary of war. In war, for one side to win, the other must lose. But commerce is not warfare. Trade is an economic alliance that benefits both countries. There are no losers, only winners. And trade helps strengthen the free world. Yet today protectionism is being used by some American politicians as a cheap form of nationalism, a fig leaf for those unwilling to maintain America's military strength and who lack the resolve to stand up to real enemies -- countries that would use violence against us or our allies. Our peaceful trading partners are not our enemies; they are our allies. We should beware of the demagogs who are ready to declare a trade war against our friends -- weakening our economy, our national security, and the entire free world -- all while cynically waving the American flag. The expansion of the international economy is not a foreign invasion; it is an American triumph, one we worked hard to achieve, and something central to our vision of a peaceful and prosperous world of freedom ..."

Posted with apologies to the owner of Army.ca if this leads to POTUS47 getting mad on the socials as he has with previous sharing of former president quotes elsewhere

 

[The Bread Guy]

The White House Release

President Trump Is Finally Ending Canada’s Free Ride

Canada has been ripping off the United States for decades — and President Donald J. Trump is done letting them get away with it. Last week, the U.S.

www.whitehouse.gov

Thanks for this!

Did Ottawa ban alcohol in almost all provinces & territories? I thought provinces did that sort of stuff? Oh well, POTUS47 writers must know these things, or they wouldn't be writing them, right?

 

[QV]

The White House Release

President Trump Is Finally Ending Canada’s Free Ride

Canada has been ripping off the United States for decades — and President Donald J. Trump is done letting them get away with it. Last week, the U.S.

www.whitehouse.gov

Brace, brace, brace!

If Trump wanted to really troll Canada he would have imposed a 51% tariff.

 

[YZT580]

Little reminder from Reagan in 1988:

Radio Address to the Nation on the Canadian Elections and Free Trade

112688a

www.reaganlibrary.gov

"... We too often talk about trade while using the vocabulary of war. In war, for one side to win, the other must lose. But commerce is not warfare. Trade is an economic alliance that benefits both countries. There are no losers, only winners. And trade helps strengthen the free world. Yet today protectionism is being used by some American politicians as a cheap form of nationalism, a fig leaf for those unwilling to maintain America's military strength and who lack the resolve to stand up to real enemies -- countries that would use violence against us or our allies. Our peaceful trading partners are not our enemies; they are our allies. We should beware of the demagogs who are ready to declare a trade war against our friends -- weakening our economy, our national security, and the entire free world -- all while cynically waving the American flag. The expansion of the international economy is not a foreign invasion; it is an American triumph, one we worked hard to achieve, and something central to our vision of a peaceful and prosperous world of freedom ..."

Posted with apologies to the owner of Army.ca if this leads to POTUS47 getting mad on the socials as he has with previous sharing of former president quotes elsewhere

thanks for that.

 

[Jarnhamar]

I don’t know who Saint Lawrence is. Nobody does. But somehow Canada thinks they can name OUR great river. Not anymore. It’s a tremendous river, a very important river, probably one of the greatest rivers anywhere. From now on, it’s called the TRUMP RIVER. A beautiful name. A strong name. The best name!

 

[dapaterson]

I don’t know who Saint Lawrence is. Nobody does. But somehow Canada thinks they can name OUR great river. Not anymore. It’s a tremendous river, a very important river, probably one of the greatest rivers anywhere. From now on, it’s called the TRUMP RIVER. A beautiful name. A strong name. The best name!

Lots of communities dump raw sewage into the river, so yeah, that name change tracks.

 

[The Bread Guy]

I don’t know who Saint Lawrence is. Nobody does. But somehow Canada thinks they can name OUR great river. Not anymore. It’s a tremendous river, a very important river, probably one of the greatest rivers anywhere. From now on, it’s called the TRUMP RIVER. A beautiful name. A strong name. The best name!

What I want to know is which Great Lake we rename “Lake Epstein”?

 

[QV]

What I want to know is which Great Lake we rename “Lake Epstein”?

The time for honoring former US President Bill Clinton is long past.

 

[Altair]

What I want to know is which Great Lake we rename “Lake Epstein”?

Lake Michigan naturally.

 

[Good2Golf]

I think the U.S. is increasingly willing to accept economic inefficiency in return for greater control over strategic industries, supply chains, energy, critical commodities and the economic behavior of countries within its immediate sphere of influence. That doesn’t mean every tariff is smart. Some of them are obviously ham-fisted. Some probably undermine the very industries they’re supposed to protect. I’m perfectly willing to concede that Trump can identify a real strategic vulnerability and then choose a stupid instrument to address it.

[Economic efficiency takes a back seat to success in battle], Sun Tzu

Canadian chest-puffing and political temper tantrums may play well domestically, but they do nothing to improve our actual bargaining position. Threats only matter when you have credible alternatives and the capacity to sustain them; right now, Canada needs less performative outrage and more infrastructure, industrial capacity, and leverage.

…and trade deals with other nations to support diversification.

Brace, brace, brace!

If Trump wanted to really troll Canada he would have imposed a 51% tariff.

Canada should have made its top tariff hrs it 47%

 

[Oldgateboatdriver]

We are not in a position to really bitch about what is about to befall us and the USA. Think of what the Cubans have to contend with and how long it's been. Even cut off from the US we wouldn't suffer as much.

And the US couldn't survive with a complete cut off: too many critical minerals, energy resources, nuclear fuels, fertilizers and aluminium.

And, BTW, no one has yet looked at the financial side of the equation with investment control, capital export controls, money market restriction or debt acquisition restrictions (i.e. making it illegal for the large institutional investors to acquire US debt papers like T-bills), amongst the many options.

 

[Altair]

[Economic efficiency takes a back seat to success in battle], Sun Tzu



…and trade deals with other nations to support diversification.



Canada should have made its top tariff hrs it 47%

No.

92.

 

[RangerRay]

I'm still reading more, but one version I've heard is that one of the American demands was that Canada had to mirror any tariffs the U.S. has in place for country x if/when Canada made a deal with country x, or anytime the U.S. imposes tariffs on country x.

So I guess that means we would never have tariffs on China then since Trump is also unwilling to tariff them…?

 

[Czech_pivo]

We are not in a position to really bitch about what is about to befall us and the USA. Think of what the Cubans have to contend with and how long it's been. Even cut off from the US we wouldn't suffer as much.

And the US couldn't survive with a complete cut off: too many critical minerals, energy resources, nuclear fuels, fertilizers and aluminium.

And, BTW, no one has yet looked at the financial side of the equation with investment control, capital export controls, money market restriction or debt acquisition restrictions (i.e. making it illegal for the large institutional investors to acquire US debt papers like T-bills), amongst the many options.

Fair statements for certain but my concern is for Canada, not a dictatorship like Cuba. Give the people the ability to make their own choice if they want to continue with their current government or if they wish to choose another route.

 

[Czech_pivo]

Have to wonder what carrots the EU might be dangling in front of us when the upcoming talks start this fall.

 

[Brad Sallows]

Have to wonder what carrots the EU might be dangling in front of us when the upcoming talks start this fall.

Maybe none. History shows nations tend to take advantage of a country when they think it might be in a weak position.

 

[Czech_pivo]

Maybe none. History shows nations tend to take advantage of a country when they think it might be in a weak position.

Interesting take on this.
I do not see Canada in a ‘weak’ position.

 

[brihard]

I think we’re actually closer on this than it first sounded, but I still think we’re coming at the same problem from different levels.

I’m not defending generalized tariffs as good economics. They aren’t. I understand the argument on comparative advantage, integrated supply chains, retaliatory tariffs, inflation, reduced purchasing power and the damage that policy instability does to investment. I work in transportation and supply chain; I’m well aware that you can make your own industries less competitive by hammering imported inputs and constantly changing the rules they operate under.

Where I differ is that I don’t think Washington is optimizing for economic efficiency anymore.

I think the U.S. is increasingly willing to accept economic inefficiency in return for greater control over strategic industries, supply chains, energy, critical commodities and the economic behavior of countries within its immediate sphere of influence. That doesn’t mean every tariff is smart. Some of them are obviously ham-fisted. Some probably undermine the very industries they’re supposed to protect. I’m perfectly willing to concede that Trump can identify a real strategic vulnerability and then choose a stupid instrument to address it.

But those are two separate questions.

My point is that the broader strategic shift is real, and I don’t think it disappears when Trump does.

The competition with China isn’t going away. The securitization of supply chains isn’t going away. The push to reshore or friend-shore critical industries isn’t going away. Trade, technology, energy, finance and industrial capacity are increasingly being treated as instruments of state power.

That is the world I think Canada needs to prepare for, and on CUSMA, I actually think your point reinforces mine.

I’m not saying Canada is clinging sentimentally to some ancient treaty. I’m saying that if even Trump’s own negotiated, signed and publicly celebrated agreement can become conditional when Washington decides its interests have changed, then Canada would be foolish to confuse an agreement with a strategic guarantee.

Of course agreements matter. Of course predictability matters. Business can price around a bad rule set far more easily than it can price around rules that change every six months.

But international agreements ultimately endure because the parties still see value in honoring them. No higher authority can compel the United States to comply if Washington decides otherwise.

That is not an argument that treaties are meaningless. It is an argument that treaties are not a substitute for leverage. And that brings me to what I think is the much bigger Canadian problem.

We keep talking about “leveraging our resources” as though possessing enormous natural resources automatically gives us strategic power.

It doesn’t.

Canada has spent decades failing to build the infrastructure and industrial capacity that would let us exercise that leverage.

Our economy was overwhelmingly developed north-south.

Our pipelines run south.

Our rail networks are deeply integrated with the United States.

Our electrical systems are heavily interconnected with theirs.

Our manufacturing supply chains cross the border repeatedly.

Even western Canadian crude moving into Ontario and Quebec through the main pipeline system has to leave Canada, transit the United States and then come back into Canada at Sarnia. We are one of the largest oil-producing countries in the world and we don’t even have a fully Canadian pipeline connection between western production and eastern refineries.

To me, that's an extraordinary strategic vulnerability.

So whenever somebody says, “Fine, we’ll just sell the Americans less oil and send it to Europe or Asia,” my immediate reaction is:

How?

Through what pipeline?

Through what port?

With what terminal capacity?

On what timeline?

To what established customer?

We cannot just point four million barrels a day in a different direction because Washington pisses us off.

The infrastructure does not exist.

That means much of our supposed resource leverage is theoretical rather than usable.

If your product can realistically reach only one dominant customer, that customer holds enormous bargaining power regardless of how badly it needs what you sell. The problem goes well beyond export infrastructure.

Canada has also spent decades allowing important parts of its primary and secondary industrial base to shrink, disappear or become increasingly dependent on foreign inputs.

Steel, Mining, Oil and gas, Refining, Heavy manufacturing, Shipbuilding, Northern infrastructure.

We have become very good at talking about critical minerals and strategic resources while frequently being much less capable of taking Canadian raw materials all the way through processing, refining and manufacturing into the finished products we actually need.

That distinction matters.

Digging something out of the ground and putting it on a ship is not strategic autonomy if somebody else processes it, manufactures the strategic component and sells it back to you.

Steel is a good example of the contradiction.

Algoma Steel, in the news yesterday, with the Carney Government announcing we were going to build six new ice breakers and Algoma was going to provide the steel. BREAKING: Algoma Steel to supply plate steel for new icebreakers

Algoma Steel spent more than a century as an integrated steelmaker. Ottawa then provided substantial support for Algoma’s transition from traditional blast-furnace steelmaking to electric-arc furnaces as part of its decarbonization policy.

Algoma Steel has now shut down its traditional blast-furnace and coke-making operations.

At almost exactly the same time, Ottawa is talking about rebuilding Canadian defence-industrial capacity, building new icebreakers, strengthening Arctic sovereignty and sourcing more strategic materials domestically.

I’ve heard an industry rumor that some of the feedstock required for certain Algoma plate production may now have to be imported, possibly from Brazil, processed again here and then used in Canadian projects. I haven't been able to verify that, so I’m not presenting it as fact, and I certainly wouldn’t hang the argument on it.

But if it turns out to be true, it would be an almost perfect illustration of the larger problem.

Because the verified part is already significant enough.

An electric-arc furnace and an integrated blast-furnace steelworks do not represent exactly the same strategic capability.

Canada has iron ore.

Canada has metallurgical coal.

Canada has enormous energy resources.

And yet we have reduced some of our ability to take those domestic raw materials through the entire primary steelmaking process at precisely the moment when the geopolitical environment is reminding us that industrial self-reliance actually matters.

I’m not arguing that EAF technology is bad. It can be cleaner, more efficient and commercially attractive.

I’m questioning whether we have ever seriously evaluated industrial policy through a national-security lens.

Because this is the recurring Canadian problem.

For decades we optimized around efficiency, emissions targets, cheap global inputs and the assumption that international markets would remain open and predictable. Then the geopolitical environment changed, and suddenly everybody rediscovered words like resilience, sovereignty, strategic industries and economic security.

The problem is that you cannot rebuild industrial capacity with a press conference.

Mines take years.

Steel mills take years.

Pipelines take years.

Ports take years.

Rail corridors take years.

Refineries take years.

Shipyards take years.

Northern infrastructure takes years.

And once those capabilities disappear, the workforce, expertise, supplier networks and institutional knowledge disappear with them.

That is why I think Trump is exposing a Canadian vulnerability rather than creating it.

We built one of the richest resource economies in the world, but we optimized much of it around selling into one overwhelmingly dominant market and assumed that relationship would remain fundamentally predictable.

That was economically rational for decades.

Strategically, it left us exposed.

So when I say Canada needs to become more ruthless and transactional, I don’t mean we should start randomly throwing tariffs around in imitation of Trump.

I mean Canada needs to rebuild national economic power:

• Ports
• Pipelines
• Rail
• Energy infrastructure
• Mines
• Refining and processing
• Steel
• Shipbuilding
• Defence manufacturing
• Northern infrastructure

And, critically, multiple credible export markets on the other end of that infrastructure. Some of that capacity will look redundant or inefficient if you judge it purely through a commercial spreadsheet.

Build it anyway.

Because redundancy has strategic value.

The ability to redirect trade has value.

Keeping your own economy functioning during a political dispute has value.

The ability to tell your largest customer, “No, we actually have another option,” has enormous value.

I don’t want Canada economically divorced from the United States. That would be ridiculous. Geography guarantees that the Americans will remain our most important economic relationship.

What I want is optionality.

I want the United States to conclude that treating Canada as a strong, integrated and sovereign partner is the best deal available to them, not because we appealed to principle, and not because we reminded them what CUSMA says, but because the alternatives are more expensive.

That, ultimately, is what I mean by a realist Canadian response. We have plenty of resources. What we have lacked for decades is the infrastructure, industrial capacity and political willingness required to turn those resources into power.

We’re very largely agreed on just about all of this; we’ve been saying mostly the same thing.

I’ve not been suggesting Washington is trying to optimize for economic efficiency. Although they use economic language, it’s for a dumb audience, not an informed one. Obviously they’re trying to onshore as much industry as they can, but it’s more dogmatic than logically reasoned. A lot of industry makes little economic sense to onshore- though thanks for adding ‘friendshoring’ to my vocabulary; I like that. And I agree at the incoherence of having that as an objective yet behaving as they do to Canada… Anyway.

Fully agreed that ‘stuff in the ground’ is not ‘stuff to market’, but you’ve seen enough of what I’ve had to say on resources and infrastructure and I think you know we’re aligned there.

So yeah, Trump is showing us structural vulnerabilities we’ve allowed to build over decades, largely because we were ‘safe’ to pursue economic optimization with trade flows pretending there’s not a border that could suddenly e turned against us. We must remedy all that. And it will take a fair bit of public investment, which we will have to accept as inefficient.

We have years of challenges ahead of us as a country.