Retaliatory tariffs

Politics & Elections
21

As is typical of these discussions, there’s an overemphasis here on consumer products.

The vast majority of cross border trade, and in fact the majority of all business ever conducted in general, is business to business. I am a consultant working with many, many businesses; NONE sell direct to the consumer. Not a single one. The inflationary effect of a general tariff is, to almost all people, something felt indirectly; prices will go up because of a general supply shock. Of course some is pretty direct but most is not.

Most Americans (or Canadians for that matter) don’t even know what potash is, but a huge amount of it is exported from Canada to the USA. Potash is an absolutely irreplaceable product, a critical precursor in the production of fertilizer. The USA cannot stop importing it because you cannot just dig a potash mine tomorrow, there is no practical alternative, and Canada is the biggest producer of it in the world. If it’s tariffed, that is a deadweight loss for the American economy; it is quite literally the government taxing farming. Food prices will go up on food grown in the USA. It is absolutely inevitable. Furthermore, the USA’s fertilizer sales abroad will be hurt by a huge potash price hike, further damaging that industry.

Worse are the cross border movements of a zillion things. Last week I was working at a company that makes lead shielding for the medical industry. Many of their clients are American. Those clients will now be paying 25% more - or they won’t be able to meet their construction schedules. Companies that are good at lead poured products just do not grow on trees, and a tariff either means the medical industry pays more, or they don’t get stuff done. You’ll pay for that in a hundred hidden ways.

To answer the OP, the OP is in a sense right. Economically speaking the best thing Canada can do is raise no tariffs at all. Tariffs are a case of “I will hurt myself to hurt you.” But POLITICALLY, there is little choice; punching back, while it hurts us, may be better in the short run. (I’m not even getting into the possibility that Ontario and Quebec will retaliate but adding a huge rate hike to the electricity they sell to the US northeast.) The American consumer is generally ignorant and won’t know why prices are soaring, but they do complain to their congresspeople and governors. Congresspeople and governors do not like angry constituents, they like happy constituents. They don’t like business leaders on the phone and in their office screaming in anger over massive price shocks. Targeted tariffs meant to increase the number of furious phone calls and emails to congresspeople and governors are smart moves, meant to accept a bit of short term pain in an effort to speed up the pressure on the White House to drop general tariffs.

This is all an unnecessary catastrophe that will hurt people in both countries, and I suspect much of it is due to oligarchs seeing a way to profit from the pain of the working class. As has been pointed out, the USA is becoming an existential threat to Canada and we have no choice but to fight. It’s a matter of our independence and, frankly, there is something to be said for pride and honor.

22

Trump’s tactic is to bully others in the hope of forcing them to capitulate because they’re unwilling to fight back. Tariffs on American goods isn’t going to be great for Canada, but it’s probably worse to let Trump get away with treating Canada like a hostile nation. And Jesus Christ, I can’t believe we’re treating one of our best allies as we might a hostile nation.

23

Yes, it’s this exactly. Trump’s tariffs will be a broadsword, slashing through everything in its path, massively powerful but completely indiscriminate.

Canada’s tariffs will be a scalpel, carefully chosen to maximise their effects on key US targets for political purposes, while minimizing the impact on Canadians in general. We will not tariff foodstuffs, no one in Canadian government is that stupid, period.

That’s the fundamental difference. Trump is a bully, taking wild swings at everyone on the playground. Canada is the sneaky little kid who slips in and kicks Trump in the balls without warning.

24

There is no reason not to. The consumers will suffer a little. Especially buying stuff like entertainment from Canada. But the whole of entertainers has gone weird in that the streaming for music for example does not make money for the artist. The sporify stuff is just an ad for the music. They make income playing concerts. The concerts in Canada will still happen. Not sure how you pay tax to Canada while playing there.

Corporations that make goods in China will have the Canada office and distribution separate from America. We do not use the same currency. People in Detroit will go shopping in Canada and compare prices.

25

This isn’t a helpful analogy. Some countries that were invaded in World War II did not mount any resistance, and so did effectively “just accept it”. It’s therefore perfectly legitimate to ask why some countries back then did fight back, just as it’s legitimate to ask why some countries today might impose retaliatory tariffs.

26

Why does that come as a surprise? You (generic American ‘you’) did the same thing during the first Trump administration, albeit to a lesser degree than appears likely this time 'round.

27

No, no, you mean inflation. I’ve been assured that prices going up because of Trumps tariffs is just inflation.

28

Yes, and how many of those countries regretted this later, when the Waffen SS was rounding up and executing a lot of their citizens?

29

I don’t see how answering that particular question is on topic here. The only point I was making is that, contrary to what @Northern_Piper implies, there are many possible responses to a tariff, just as there are many possible responses to an invasion, including (in both cases) “just accepting it”. Regardless of the outcome of those decisions, it’s worthwhile to explore the rationale for them. In this particular case, what are those advocating (or opposing) retaliatory tariffs expecting to achieve or to avert, and what are they expecting it to cost?

30

No it isn’t. Inflation necessarily involves prices going up, but not every increase in prices is necessarily an instance of inflation.

31

It is literally just the measure of the change in price over time.

Product shortages - e.g. egg availability goes down due to a chicken plague - as just one example, are inflationary. No government, currency, or other nonsense is needed to generate inflation. It’s just as easy as asking whether the prices went up or down.

32

Trump is a bully, and he’s greedy, and he wants to transfer the majority of the US tax burden from rich people and corporations onto middle and working class Americans. If Canada “just accepts” these tariffs, he’ll see us as weak, and unwilling to act against him, which will just embolden him to increase the tariffs. Either jack up the percentage, or expand the scope of the goods under tariffs, and probably both. He might also impose other costs on Canadians.

We know it will cost us to act. We’re not stupid. But we also know that if you give in to a bully because you’re afraid he might hit you, you lose. And you’re probably going to get hit anyways.

You have to understand the impact this will have on the Canadian economy. We are completely fucked if this happens, and lasts more than a few months. Our exports to the US will drop, and that means a lot of people will lose their jobs, and those that keep their jobs will probably lose hours, and have lower expectations for raises and the like. And every time someone loses their job, that impacts everyone else around them. Even our domestic sales to other Canadians will drop, because so many of our fellow Canadians will be unemployed, or under-employed. Those people won’t be spending any more money than they have to.

If these tariffs are imposed, this is going to happen. Period. This is what “just accepting it” looks like to Canadians. Well, if we’re going down anyways, we’ll be going down swinging.

33

I’m hoping this isn’t a hijack, and I don’t think it is because it’s the core reason for these tariffs in the first place (against Canada I mean, as this thread is pretty much solely about US/Canada trade). But I’m trying to understand why Trump is implementing tariffs on Canada, and I don’t mean just “Trump is an idiot/bully/insane”… There has to be something behind it.

I get that there is an excuse about drugs and immigrants coming across the border, but surely that is pretty minor. There is quite a bit going on from Mexico and has been for a long time, but Canada? Tariffs against Mexico and China, I can see why you’d institute those (as stupid as it is), but I don’t understand the animosity toward Canada.

It can’t be directed toward Trudeau because he’s on the way out.

Did the Canadian government attack Trump personally? Is he trying to get something specific out of them? I tried just Googling the answer but I haven’t found anything aside from the same nonsense about drugs and immigration.

By the way, I did find this interesting article from the CBC about how tariffs might affect Canada and how they might retaliate, and what the result of that might be.

34

Have you a name? even Denmark that fall in one night put up resistance after.
So no, countries just doesn’t curl up and cry when they’re treathened.

35

Well, the Economist has an article out on Trump’s admiration of McKinley, and how he was the last president to expand U.S. territory (Guam, Hawaii, Puerto Rico, V.I.). It’s possible that those ridiculous claims about annexing Canada (“51st state”) and Panama and Greenland really are his ultimate goal. Inspired by his friend Vladimir, of course. The tariffs would just be a way to squeeze Canada’s balls to accept some sort of annexation, ideally as a junior territory rather than a state.

36

Huh, okay. That is crazy but at least it’s a reason that makes some sense. If you want to conquer someone, you have to subjugate them, and using the economy rather than the military (at least at first) is one way to do it.

Thanks for the explanation. I knew there had to be something behind this.

37

The non-conspiratorial answer would be that he said dumb shit in the past - maybe just parroting Ross Perot who was, himself, responding to the mechanization and off-shoring of manufacturing that occurred in the 1970s - and now he feels obligated to do it, so he doesn’t lose face.

The other answer - but one with limited evidence behind it - would be that, functionally, there’s no difference between sanctions and tariffs. You force a country into self-sufficiency, putting them at a disadvantage to countries who have access to the global marketplace for talent, resources, etc. And so we can posit that any countries who have reason to see America and the global legal order diminished have a motive to see to it that the US sanction itself and are expending resources to boost the success of Trump and using means of influence to convince him that he should go ahead with his stated agendas.

We see things, for example, like the ByteDance CEO showing charts to Trump, saying that TikTok “boosted” his success in the campaigns. Whether they actively tweaked things for that result (e.g. boosting Biden support for Israel and Gazan tragedies with young voters) or just flashed some statistics in front of him of unadulterated, natural results that by happenstance seem to his favor, we can’t say, but we can see cases of people working to influence Trump to their advantage and the man responding to it.

Getting more conspiratorial, we can all say that Trump is the sort of guy who, if you told him in the 80s and 90s that there are cameras in his hotel room, in Moscow, that he’d scoff and call it nonsense, and think nothing of it if the KGB sent a big-titted 13 year old to his hotel room. Fundamentally, the dude is a credulous moron with a zipper problem. Regardless of the lack of all evidence of anything to fear, just knowing his personality and the sort of shit that he’s gotten up to in the US, there really could just be anything lurking in his past that is just as likely to lead to him working against US interests.

The same general stupidity, on the other hand, also makes it just as plausible that he’s really just doing harmful stuff for no greater reason than ignorance and “face-saving”.

38

Canada has a trade surplus with the US, so in Trump’s tiny, idiotic, pea brain, that means that Canada is taking advantage of the US or we’re subsidizing them. See, I think, hey, Canada is giving us car parts, oil, etc., and we’re giving them IOUs! Haha! Suckers! In his mind, America! Strong! We should sell to more to everyone! Trump smash!

39

I just wanna say that I was thinking about all this stuff last night, and ended up not being able to sleep. An economic meltdown would have major repercussions among friends and relatives who, unlike me, aren’t yet retired, and might also affect my own finances greatly because I anticipate putting the current house up for sale within the next few years. It’s absolutely sickening that an ignorant convicted felon suffering from dementia and pathological narcissism can do this to America’s best neighbour and closest ally.

What makes the tariff threat worse is that he now has a bug up his ass about Canada merging with the US – it will never, ever happen, but it will piss him off and make the bully even more inclined to violate existing trade agreements and wreak havoc on Canada. And even more sickening is that it’s all based on a manufactured delusion. If you exclude oil and gas, which the US absolutely needs, the US runs a strong trade surplus with Canada, and even when you include oil and gas, over the last 15 years or so the US has varied between small trade surpluses and relatively small deficits, nothing even remotely close to the ridiculous numbers the Orange Liar has been spouting.

The Orange Fuck’s deluded world view is well illustrated by his claim that Canadians would just love to be the 51st state. As a Canadian who cherishes our values and knows many other fellow citizens who all feel just the same way, I can tell you that Canadians currently regard Trump much as Britons regarded Hitler on the eve of World War II – with a mixture of dread and hopeful optimism. If it was Trump’s intent to get the whole world to despise America, and to wish to distance themselves from it as much as possible, he’s doing a fantastic job of accomplishing that.
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40

I think at some point, we just have to accept that Trump really is just stupid and ignorant. We’ve seen on many occasions, Trump asserting that it’s the other country that pays for the tariffs, and that he’s “bringing in untold wealth” for the US because of his tariffs. That’s stupid and ignorant, and people have tried to explain to him that it doesn’t work that way, but every time, he contradicts them, and insists that his version is the truth.

I think we need to finally accept, that, yes, this is just what he actually believes. He really thinks he’s found some Magic Money Faucet in international trade that lets him make massive profits for zero effort, and no one will ever be able to dissuade him from that belief.

And the stuff about “drugs” and “migrants” is just the excuses. He needs an excuse to impose the tariffs, because current treaties and laws limit what he can do otherwise. But if he can get out from under those pesky laws and stuff, it’ll be tariffs galore, baby!