REGINA - For the umpteenth day in a row I am writing about tariffs, and this time I’m doing it on a day when the American stock market is tanking again.
The Dow Jones dropped almost 900 points Monday due to recession fears. All the talk on the financial news down there in the USA is about fears of an economic downturn and even stagflation.
Why am I not surprised? Really, what do you expect when you have a half-crazed President Donald Trump in the White House, hitting countries around the world with massive tariffs — including the USA’s two closest neighbours Canada and Mexico. Never mind all this 51st State crazy talk on top of that. You’d think if Trump were so concerned with “America First” that he’d be interested in a stable trading relationship with his next door neighbours, with whom so many American companies do their business.
But no, Trump has insisted on hitting them with tariffs, a move that is completely unpopular with the US stock market. Every time Trump hits Canada with tariffs, the stock market tanks. And then he has to reverse course and provide a one-month extension, only to try again a month later, only for the same thing to happen.
"Whiplash” is the word that keeps on being uttered north of the border about the reaction to Trump’s tariffs. Canadian politicians are so fed up that they are leaving in place their counter-tariffs and their bans on the US liquor sales until Trump puts a stop to this yo-yo act.
The new incoming Canadian prime minister Mark Carney says the counter tariffs will stay on until Canada gets respect. That could be a long time.
What’s most frustrating about this is that Trump is not being consistent in what he is asking for. His officials keep insisting the 25 per cent tariffs are about fighting fentanyl. So Canada announces $1.3 billion in measures to combat fentanyl and Trump grants a reprieve. Then a month passes, and Trump declares that Canada hasn’t done enough, and hits the country with tariffs anyway.
No wonder Canadians are fed up. We do exactly what Trump says he wants done, only to get hit anyway. And there there are the 51st State insults to top that.
But here’s why I’m fed up: it seems like Trump is not even listening to people in his own country. I know Canada has tried mightily to lobby American politicians and business leaders in an all-out effort to try and talk sense into this administration. But really, the strongest message is coming right now from Wall Street and from investors across the USA.
The markets have made it loud and clear that they think this trade war is a one-way ticket to another Great Depression, and that they think Trump ought to dial back the “tariff” stuff. Investors clearly aren’t buying Trump’s line of bull that tariffs are going to “make America rich again,” especially with all the concerning economic data coming out of the USA at the moment.
I dunno how many times Trump is going to tank his own stock market before he gets the message. Who knows, maybe it is having an impact -- he keeps on granting his stupid one-month reprieves to Canada.
Really, though, no one is winning in this trade war scenario. The USA is being handed their lunch right now due to their own self-inflicted tariffs, and the White House is embarrassing itself on a monthly basis.
Meanwhile, Canadians are very gung-ho about fighting a trade war with the Americans, with a “rah-rah, let’s fight the Americans” message from politicians and our media, without really understanding what this all entails.
For one thing, there seems to be this wide impression out there in Canada that imposing counter-tariffs on the Americans is something that will only impact the Americans. But you know who’s going to be hurt the most by counter-tariffs? Ourselves!
It’s Canadians who will be getting hit by higher prices — not so much from the USA, but from the various counter-tariffs and counter-measures being imposed by various levels of our own Canadian governments on the US goods coming onto our store shelves. Those are putting the price of all US-made products up.
This can’t go on. This ridiculousness on both sides of the border had to end sooner rather than later -- but how?
The question people need to be asking is what is the “off-ramp.” That’s exactly the question I posed to Premier Scott Moe last week, and he seemed to concur when I suggested maybe the upcoming USMCA negotiation might do that. In any event, there needs to be some negotiating done in the near future, that seems the most logical way out.
Here’s the off-ramp involving the USMCA as far as I can tell. From a Canada perspective, start negotiations early. The demand should be all of these new tariffs get removed and stay off. To address American concerns, commit to stepped up efforts to fight fentanyl and towards an increased commitment from Canada’s military. Craft a final deal that will both address the USA’s trade deficit concerns, but also result in increased trade for Canada in the end.
Make it a win-win scenario for all sides. While that deal gets done, Canada needs get on with improving their trade to the rest of the world so we don't have to rely on the Americans ever again, which includes removing inter-provincial trade barriers, and building more pipelines.
That’s the way out of this mess, if folks on either side of the border can get out of their own way.
