What happens at the end of our trade war with Canada?

Donald Trump has demanded that Canada stop sending us fentanyl and undocumented migrants. (why wouldn’t Canada try to keep at least all of the migrants for itself since we are informed that low-skill migrants make any country richer?) Canada refused to try to do this so Trump has hit them with 25 percent tariffs and now the Canadians are retaliating with their own tariffs (NYT). Do the tariffs keep escalating until all trade stops? Then what? The Canadians (example) seem to think that the less-export- dependent country will cave in (34 percent of Canada’s GDP is exports; 12 percent of U.S. GDP is exports). Americans don’t think or care about this?

What does Canada produce that we can’t make domestically, albeit at a presumably higher price? On their side, why does Canada need the U.S. as a trade partner? If they are all about resource extraction why can’t they sell their extracted resources to the Chinese and Europeans?

To the extent that a reduction in trade with Canada harms New York, Vermont, Maskachusetts, etc., I wonder if the trade fracas will be a net positive for Florida, which doesn’t border Canada and doesn’t get any power from Canada. A righteous New Yorker who suddenly has to pay twice as much for electricity could reasonably consider that the last straw and move to Democrat-dominated Orlando.

Speaking of Florida, here are a few pictures from Juno Beach yesterday, which featured shockingly cold (to Floridians) 72-degree ocean water, a pelican sushi bar, and a lunch menu that RFK, Jr. would certainly appreciate:

Some Canine-Americans who don’t seem to be concerned about a trade war:

12 thoughts on “What happens at the end of our trade war with Canada?

  1. I spent my formative years in the era when conservatives supported free trade. I believed them then, and continue to believe they were correct. Here are President Reagan’s brief thoughts on the subject in May 1987: https://www.youtube.com/watch?v=ULTIWXUVPq0

    The Canadian tariffs have nothing to do with fentanyl or undocumented migrants. The constitution gives power to set tariffs to Congress. Congress then gave the President authority to set tariffs as part of the International Emergency Economic Powers Act of 1977, but only if there is an “unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.” So he had to come up with a reason other than general cussedness.

    Trudeau has already announced his resignation, and Canada already has a federal election scheduled for October (it could happen sooner in their parliamentary system.) I suspect we won’t really know how this will play out until after the election.

  2. “What does Canada produce that we can’t make domestically, albeit at a presumably higher price?”

    Heavy crude oil, which your refineries are set up to process. The alternative source is Venezuela

    “If they are all about resource extraction why can’t they sell their extracted resources to the Chinese and Europeans?”

    Because we’ve hamstrung our energy transport infrastructure for a decade plus. Most of our energy resources can’t be easily shipped anywhere else.

    There won’t be a trade war. Our leaders will give in to Trump’s demands, just like the Colombians. This isn’t necessarily a bad thing: we’ve neglected border security and drug trafficking enforcement for a while.

    • Busy making dastardly plans. Canadian agent Elon Musk has managed to take control of the Treasury payments system, Canada is currently working with Elon’s minions to have complete control of the US, please keep this information top secret.

      A couple of points:
      1. Last time US tried to invade Canada in 1812, we burned the White House down to the ground.
      2. Trump manged to do what no other Canadian politician has done, unit all Canadians
      3. US does not need Canada for anything, you can buy all your required resources from directorships and banana republics. US can send its military to Africa and Venezuela to get all the resources it needs.
      4. Trump really helped Canadians realize that expanded trade with Asia and the EU is a necessity. The political motivation to build pipe lines for LNG and oil to the BC coast just increased. Japan, South Korea, Philippines and Taiwan would really like to buy Canadian LNG.
      5. We can buy our fruits and vegetables from Mexico

    • Pavel, you forgot what Trudeau is doing now: secure the border. Trump is a master of economic blitzkrieg. Shortest economic war ever.

    • perplexed, the $1.3 billion border plan was announced in December and Trudeau will resign next month. The next federal election should be shortly after and hopefully we will have Poilievre as the next Prime Minister. Poilievre has been talking about a strict policy toward drugs and crime, controlling illegal immigration and limiting legal immigration to Canada for many years. The carbon taxes will be gone and pipe lines will be built and Canada will export LNG to Asia.

      Trump is the master of nothing and can be easily played by people who know how to use his ego against him.

    • Pavel, did you mean LNG terminals or pipelines below Pacific? It does looks like something Dr. Evil would design, maybe TS has a point. Why Canada is discriminating Europe? LNG is expensive there, mostly due to European regulations, and LNG profits should greater in Europe then in Asia, because Asia buys Russian natural gas.

    • perplexed, pipelines to the LNG terminals on the Pacific coast. The initial LNG infrastructure on the Pacific coast is almost ready for operations. The EU is also a possible market, pipelines could also be built to the east, but this would take a significant amount of time and investment. Japan, South Korea, Philippines and Taiwan would prefer to buy from Canada. Doing business with Russia can be fatal, if a business deal goes sideways, you will fall out of a window. Russia will fall apart economically in the next decade, China will probably buy out whatever is left over.

      https://www.canadianenergycentre.ca/worlds-largest-ai-chip-builder-taiwan-wants-canadian-lng/

  3. Would it be easier if Americans just buy American made goods. As for as fentanyl , it is a demand and supply issue.

    • HR, supply is key there. Fetanyl does not grow on trees, it needs big pharma to produce it.

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