The biggest things they import for Canada aren't even manufactured goods but raw materials.
The only way to avoid the T tarrif at that point is to import from a different country but there are tarrifs there as well.
What is even the end game here? Make China the new biggest game in town?
They state they think the temporary pain to consumers and the loss of good will with Canada and Mexico is worth some other goal that will be achieved like they think this will cause American manufacturers to decide to expand in America, also they always talk about tax cuts and tariffs are a way to increase federal revenue without a change in the tax code. There's also the stated justification of fentanyl and undocumented immigrants from Canada and Mexico but the vast majority of both of those comes from Mexico with Chinese connections for some avenues of fentanyl so the Canada thing feels like it's a flimsy excuse to be included just for some bargaining on some other subject, or just to have an accomplishment, like how Trump in first term pushed for TikTok ban, then after winning 2024, Trump undoes ban he initiated in first term to claim that as an accomplishment. Versus say the border wall he promised in 2016 campaign but had a paltry result by 2020.
It's like they think a factory or manufacturing plant can be spun up in a few weeks.
America is just an unserious country right now.
Little do they know that Canada has such a hugely unpopular government that our government would rather destroy our economy even further so they can blame it on Trump to try regain popularity than try to do anything productive at this point...
Trump is quoted as saying "there is nothing Canada can do".
Rejoin the conversation when you come back to reality.
Say I manufacture a widget in [country]. At present, there is no manufacturer of that widget in the USA. We export to the USA, and now the US importer or distributor pays a ~25% tariff on the declared value to Fedgov. Then that US importer or distributor receives the widgets and sells them. Because its margin is down, it raises its price. Who paid first? The US business that imported the widgets. Who pays in the end? The US customer.
Now say I manufacture some specialty aluminum rods in [country]. We export to a heatsink manufacturer in the US. As they need our rods, they pay the tariffs. Their product is now considerably more expensive and there's more friction in their supply chain.
The only way this ends is with Americans paying more for goods. It could be a lot worse than routine inflation.
The right way to go about things would be to shore up US manufacturing capabilities first, and then utilize tariffs selectively. Right now, there's really no way around foreign inputs in manufacturing and/or wholly foreign-made goods, so there's going to be a lot of pain.
USD to CAD has front ran a lot of this already. 1.45 is crazy.
The idea Canada can so easily re-route trade is absurd. Especially when the trade is going to be settled in USD.
I have been trying to understand the point of all this and come up empty this morning. I would have to assume it is for enormous leverage in the trade deal that ultimately ends all this. The leverage this gives the US in a trade deal, especially with Canada is pretty incredible.
25% is just so insane that it probably does cause Mexico and Canada to concede to whatever Trump wants in a trade deal and in short order. I think this is why Trump won't even take a call from Trudeau right now. It is a leverage tactic and then when they do talk what leverage does Trudeau have? Basically zero.
Our economy is already down. All of our tech elite move to Silicon Valley. Our energy infrastructure cant get off the ground. The USA dictates so much of what Canada is able to do.
What is the point of squeezing us more? We have so little we can offer you.
We've already given you the lives of our soldiers as we follow you into pointless wars. What more do you want? The pennies in our pockets?
"Trump imposes an N% tax on goods from X" would be just as accurate but likely get a different reaction from the populace.
The US has basically "full employment" (the economic measure when more employment is inflationary). In a vacuum the idea that you're "bringing home the jobs" makes sense, but it makes zero sense when you simply don't have the capacity to build more. If Americans thought inflation was unacceptable under Biden, they're in for a real shock now.
Americans have no idea how good they have it. They're the biggest consumer of goods on the planet, and basically want their cake and to eat it too. It doesn't work like that.
And really, the US essentially has balanced trade with Canada, and if you exclude oil the US has a massive trade surplus with Canada. So when Canada and Mexico both "shore up" their own capabilities and stop buying the $1T of goods from the US, where does that leave the US? It enjoys a massive internal economy -- an irrationally large one -- but much of that is illusory and built on a myth.
Liberal trade is the reason the US became the richest country on Earth. Trump thinks everything is easy and is about to crash it to the ground.
https://www.cnbc.com/2025/01/31/us-treasury-yields-investors...
https://www.usbank.com/investing/financial-perspectives/mark...
The vast majority of our exports are raw materials, and of our manufactured goods most are foreign multinationals that set up shop to take advantage of our cheap(er) labour versus the US... They can and will move to the US because of these tariffs.
This will decimate our economy and it really feels like Trudeau simply wants someone to blame our shit economic performance on...
Hugely important for agriculture, barely produced in the US at all, mostly imported from Canada.
If Canada retaliates by barring or limiting potash exports, it would be so harmful to the American agriculture sector that Trump would go ballistic.
> They can and will move to the US because of these tariffs.
That's a lot easier said than done, and as US policies might change at any time -- it's a coin-flip what'll be the case in four years -- they'll probably just decide to wait it out and let US consumers eat the tax.
Seriously, you might think it's easy to relocate, e.g., a car manufacturing plant, but it sure ain't...
And here's the analysis from the Bank of Canada: https://www.bankofcanada.ca/publications/mpr/mpr-2025-01-29/...
I know commentators want to stick it to Trump but Canada's economy has been in a bad place for years and this isn't good for us at all...
We'll do it for political reasons until the election this year but it's going to decimate our economy even further.
2. Don't worry, even if Mexico retaliates with their own tariffs, we'll just buy from China, leaving Mexico and Canada out in the cold, jealous of our success.
3. Don't worry, even if China retaliates with their own tariffs, we'll just buy from the EU, leaving China and Mexico and Canada out in the cold, jealous of our success.
4. Don't worry, even if the EU retaliates with their own tariffs, we'll just buy from... Hold up, what happened to our four biggest trading partners and over half of all the trade we were doing? Well, their loss.
...
96. Okay, Azerbaijan, you'd better give us a really good deal right now, or else we'll take our business to Turkmenistan, and you'll have nobody to trade with except basically everyone else!
Trade makes things more efficient. Trade gives access to resources not available otherwise. Trade allows greater economies of scale, and production efficiencies via comparative advantage.
Trade is also not fundamentally necessary for the US in the way it is for essentially every other country on the planet, because the US is large enough, diverse enough, and resource rich enough to (with a fair bit of pain!) survive on our own.
I do not think it will come to that, but it is true.
Tariff war with all main trading partners ? According to Trump EU tariffs are coming in soon.
US can win any tariff war against a single country. They maybe could win against China or EU or Canada / Mexico alone. But all of them at once ? This is going to be a disaster for the US.
Because of current sky-high stock market valuations, US thinks it's the only game in town. We will soon see if it's the case. The tide is turning, and it's only when the tide goes out do you discover who's been swimming naked. US is in for a big surprise.
For Mexico, it seems more like a prod for social policy on immigration and fentanyl.
I listened to Trudeau yesterday and he isn't even able to get a hold of Trump right now, something that seems just insane.
I am just not sure that is true though that this is a disaster for the US. How much can China afford to fight back here with the state of their economy? Canada retaliating is asymmetrically bad for Canada.
Dollar strength and an emerging market currency breaking is what worries me. Inside the US, I would expect much of the potential inflation will just be exported through dollar strength. I imagine that is the method to the madness.
(This is also the US's stated reason for tariffs on Canada)
He also seems to believe that tariffs are paid by the foreign countries, not American consumers. It is unfathomable that people voted for this idiot.
Even among the folks who really do want to "run government like a business", the kinds of businesses they usually admire--large, publicly traded, with a CEO beholden to sharehodlers--are utterly different from the kind that Trump has inherited from his father.
Only kind of government Trump's business experience has prepared him for is running North Korea: A lifetime CEO on top who can't be removed, the ability to fire anybody on a whim, and sneaky power struggles between the kids for who will inherit when the old man finally strokes out.
... He's going to do a lot of damage to America trying to twist it into working that way.
Fascist Elon Musk was telling us before the election they were going to crash the economy and wreck the government. Project 2025 was freely available.
https://www.marketwatch.com/story/kaboom-elon-musk-predicts-...
They want to snap up assets, strip mine and privatize government services once theyre broken, and install the billionare oligarchcy as the permanent ring class.
Theyre speed running Russia's 1990s economic crash into oligarchy.
Which will cause Trump's various sprogs to write mean, threatening tweets, and for Trump to redouble again.
This is going to spiral out of control very quickly.
And for those not caught up, this has absolutely nothing to do with secure borders. Canada contributes a rounding error to US border problems, and the reverse is much more the case. Trump outright said there was nothing we could do. He truly thinks income tax can be replaced by tariffs, despite the latter being incredibly regressive, and the ridiculous fentanyl lie justifies his outrageous abuse of your country's limits of power, allowing him to invent an imaginary threat to push his agenda.
> American beer, wine, food and appliances will be among the many items subject to Canadian tariffs, and the country is also considering measures related to critical minerals, Trudeau said. He encouraged Canadians to buy locally made products and skip US vacations.
https://www.bloomberg.com/news/articles/2025-02-02/-complete...
https://globalnews.ca/news/10992959/donald-trump-tariffs-can...
These aren't abuses of power though. We just largely got use to the president not trying to do all that much.
Obama issued 275 executive orders and Franklin Roosevelt issued 3721. Calvin Coolidge issued 1203. I think all the presidents during my lifetime combined issued less than Woodrow Wilson at 1803.
That is not to say I think a trade war with Canada is a good idea. It really makes no sense to me at all.
That would be seriously destabilising to America for the future.
Is it going to shut up shop and close down? What does "not going to work" mean? The US is the one who chose this path, not Canada, and Canada is going to do what needs to be done for the situation the US forced it into. And FWIW, many Americans are a little in denial about how fragile your entire economy and social order is, and how little it takes to topple it. The impact of a trade war is likely to be much more significant than the "well it's just a trillion dollars of exports" rhetoric claims.
Canada has to "retaliate", in that it will adjust economic levers that will force production that currently happens in the US, serving the Canadian market, to adjust to players in Canada. Canada foolishly treated the US as an ally and partner and integrated our economies, so of course there is going to be pain. But to let you in on a little secret, a lot of Canadians have wanted this for a long time: There will be pain for a while, but Canada has increasingly become a branch office of the US. Despite enormous geographical, educational and social benefits it keeps falling behind. Trump is really just looking to MCGA. Next we can punt all of the US corporations out of Canada -- again, the ability for US businesses to operate freely in Canada is courtesy of NAFTA/USMCA. That agreement is defacto shredded now. The Canadian government needs to do everything possible to prevent discretionary dollars from travelling South of the border.
>These aren't abuses of power though.
Claiming a "border security" emergency -- a complete BS lie that only the incredibly stupid take at face value -- to push through an economic plan is absolutely, by every measure, a grotesque abuse of power. Americans are so accustomed to it now that it's just normal. If you think it isn't an abuse for your president to lie to you to have powers that he doesn't have, you have lowered your standards to corrupt banana republic levels.
Again, Canada and the US were operating under the trade agreement Trump forced on us the last time around. I don't see any clean exit of this where things return to normal. Canada must not ever treat the US as a sane, rational, responsible player on the world stage, as it constantly 180s on everything as American voters treat government like some perverse reality show.
Both Canada and Ukraine get nukes (Ukraine has a bridge that needs blowing up), Ukraine gets safety, Canada gets huge reputation gains in trade with Ukraine.
NB: Ukraine will be the fastest growing western economy post war for at least a decade or two.
Just looking at what is happening in the US right now -- an astonishingly corrupt banana republic increasingly led by an insane Christian nationalist movement that bizarrely doesn't seem to understand a thing about Christ's teachings -- I have more faith in North Korea's management of nuclear weapons than the US.
Nuclear non-proliferation relied upon a global order where borders were fixed and there was in essence an international law and detente. Now we have an America openly musing about militarily taking countries and land as if it's just casual talk.
Yes, everyone should have nuclear weapons. And many of them should be pointed at US cities. The US is undeniably the most dangerous nation on Earth right now, and has lost any and all credibility as a rational player.
No tariffs required, just suspend their copyright protection and spin up some free government-run streaming video servers.
No need to wait for tariffs. I started cancelling all American services today. Netflix and Prime were first. I will not send money to a country that has declared an unwarranted trade war on my country.
And it truly is unwarranted. The current trade agreements were negotiated by Trump in his last term, and are well balanced. The only reason for any current surplus is that oil prices are currently high. In general, Canadian raw resources go to the U.S. to be manufactured by skilled labour into end goods that are then imported back into Canada at a large markup. Trump has cited fentanyl and immigration as sticking points while providing no specific demands or suggestions. Less than 1% of illegal immigration to the U.S. comes via the Canadian border. It's incredibly frustrating to be utterly betrayed by a friend in this way.
I bet this concludes with a free trade treaty between China, Canada, and Mexico.
I’m actually sympathetic to the fent problem, but all that comes in untariffed anyways, or maybe the plan was to have the smugglers busy with illicit legos and bananas instead?
Well Canada & Mexico already have NAFTA 2.0. I doubt there will be one between Canada and China, they have frosty relations.
Canada really doesn't have a bad relationship with China. We had a tiff previously when we arrested Meng Wanzhou on behalf of the US, and in return China arrested the Canadian "two Michaels"[1] and both countries used Canada as a pawn.
[1] I turns out they were, in effect, intelligence operatives in a sense, and China actually had a case. https://www.theguardian.com/world/2024/mar/07/michael-spavor...
If this were limited to China and Mexico, the fentanyl thing might have been a rational argument. Adding Canada, which is the source of a vanishingly small amount, betrays the lie. He needed the excuse to claim an emergency, rather than the incredibly self-destructive "recreate federal funding through tariffs" policy, which coincidentally (and forebodingly) led to the great depression.
This is the only kind of thing Trump is on track to make great again.
Doesn't look like he's going to stop until it's greater than ever.
Of course Canada was warned - the last thing a bully wants is retaliation. Others might get the same idea.
>Tariffs will only hurt American consumers >Countries targeted by tariffs will retaliate
I think this speaks for itself…
… Eh? Retaliation is an absolutely standard part of a trade war; it virtually always happens, and, unfortunately, it can’t really be foregone. Like, people are talking about retaliatory tariffs because that is _how it works_; that is what always happens and really must happen.
One is to retaliate. You only do this if you think you might win the trade war. Canada retaliated, and Canada thinks it might win the trade war.
The other is to roll over. You only do this if you don't think you'll win the trade war. That's what Columbia did.
Retaliation is a sign that the attack was strong, yes, but it's also a sign that the defence is strong.
The situation is a bit different IMO, Colombia had a clear reason for getting tariffs and it was possible for them to roll over.
Canada though, it's not even clear why the tariffs are there or what Canada could do not to have tariffs. There isn't really anything for Canada to do except retaliate.
The retaliation is posturing for the other party and for the electorate. If you’re driving in a car and your passenger pulls the pin on a grenade, you can “retaliate” by pulling the pin on your own grenade.
Tariffs do of course cost the target; they reduce the market for its goods, because consumers and businesses in the country applying tariffs can no longer afford to buy them. Now, how much they hurt will depend to some extent on whether there are other markets, etc.
Imagine there are two countries, A, B. A exports $1bn in raw materials annually to B. B exports $1.1bn in finished goods to A. B imposes a 25% tariff on A. Businesses buying the raw materials will generally not be able to afford a 25% increase in input price (very few manufacturing businesses have margins anything like that high) so will fold. A no longer has B buying its stuff, so the raw material production will halt, leading to losses there. A will no longer be able to afford to buy B’s finished goods (even if A does not impose retaliatory tariffs, which it almost certainly will), so even if some of B’s industry can survive the input cost hike, it has a smaller market.
Obviously this is _extremely_ simplified (for a start, other countries exist, and you might see more of a _rerouting_ around A, a little like what has happened to post-Brexit UK. But it’s a serious mistake to think of this as a zero-sum game. In general high broad tariffs hurt everyone.
I don’t think anybody has suggested this.
Or, see my analogy; pulling a grenade pin in a moving car costs everybody.
In that setup, Canada has no choice but retaliating. Trump is a bully and so is Musk. If you do what they want, they will bully you further. So, you have to retaliate if you can.
The goal is pretty simple and obvious… Beat The People with the stick until they can barely move, then offer them a carrot and a shackle.