I’ve already started that.
Rice, oil, canned fish and beans will keep you alive.
Let’s skim through some of the economic justifications for protectionism.
- Infant industry argument. Protect one of your new industries until it’s ready to compete internationally.
- National security. If there’s a war, the US will need computer chips and Jeeps, so we should be sure to have a domestic industry that produces these things.
And relevant here:
- Raise your tariffs to encourage your counterpart to negotiate. Raise tariffs on Japanese cars to encourage them relax their restrictions on US skis. Or in this case, ban imports of products from red US states to encourage Trump to negotiate. He’s caved in the past after all.
Canadians are feeling betrayed. They should know that the US business community is analogously flummoxed. Paul Krugman points out that Goldman Sachs forecasted only a 20% chance of trade war on January 21st, despite Trump’s repeated statements that he wanted exactly that. Cite. Krugman agrees that the only thing that Trump will respond to is a stock market crash. So for the sake of the US prosperity, Canada should hit hard this weekend, so that US financiers takes Trump seriously and literally.
Sure they can. They can learn to function like companies in middle and lower income countries do. The normal state of the world is to appease powerful rulers and shape your investments and supply chains accordingly. Managers in first world nations are like hothouse orchids, very naive about the real world. It’s time that they learn what the real word entails: it’s like Russia. It’s poor.
There’s a reason lower income countries are lower income: businesses cannot effectively function when the government is clowning around like this.
Yes. I’ve read about this sort of clowning for decades in the Economist for various lower and middle income countries. Successful countries organize production according to efficiency. There’s a lot of ruin in a nation, but these policies are recipes for stagnation at best.
Larry Summers:
Screw that. I’ve stocked up on ammunition.
Some news items (some are paywalled, but trying to give a general scan):
https://www.reuters.com/world/americas/canadas-trudeau-announces-counter-tariffs-2025-02-02/
Sadly I don’t have a PAL.
Trump is now saying again on Truth Social that his goal is annexation.
This is getting heated and unpredictable on the global stage.
I am 67 and live alone. I can’t see how a gun would help me.
If they come for me I hope they put me down quickly.
If there was any way I could join a resistance in a peripheral manner I would.
Economic analysis from Yale:
Plus this :
Mr Trump appears to be preparing more import taxes.
On Friday, he suggested imported computer chips, steel, oil and natural gas, as well as copper, pharmaceutical drugs and imports from the European Union may be subject to tariffs, which could pit the US against much of the global economy.
During all the years I worked as an interpreter for international institutions I always had to remember that there is a thing called “most favoured nation status” that was applied in the GATT (General Agreement on Tariffs and Trade) that was taken over by the WTO (World Trade Organisation) which basically stated this:
Under rules of WTO, a member country is not allowed to discriminate between trade partners and if a special status is granted to one trade partner, the country is required to extend it to all members of WTO. In a nutshell, MFN is a non-discriminatory trade policy as it ensures equal trading among all WTO member nations rather than exclusive trading privileges.
The USA are a member of the WTO. How are those tariffs not discriminatory, and thus illegal?
Why would a convicted felon worry about legalities?
Longer answer: China has stated that they will challenge the 10% tariff in the WTO process, which is notoriously slow. We’ll have to wait a while for an answer.
Would it be possible for the EU and/or Canada/Mexico to apply tariffs to specific companies? Or does it have to be an entire sector?
Just wandering what would happen to the share price of Musk owned businesses if Tesla, xitter, and Starlink suddenly got banned in half of the world. A large chunk of Musks wealth is based on share options in these companies. It sure would be a shame if they were suddenly to crash.
It is funny though that China just got a 10% tariff in the end, less than even the most optimistic scenario laid out by experts like at The Economist.
It must be a great relief to the Shanghai Tesla factory, and the factories that make various vulgar Trump tat, like his sneakers and watches.
(Of course I’m a big fat liar: Trump’s merchandise is all made in Wyoming, by companies all registered mere weeks before products went on sale, in an office in a shopping mall)
In case any haven’t seen what Trump has said, here it is:
He is seriously set on imperialism. Canada 51st state. Greenland, 52nd. Sorry Puerto Rico, you are too brown to make it as 53rd.
Dani Rodrik called the 2008 financial crisis and is always worth listening to.
I agree that Canada should be loudly looking for other trade partners, penning a few quick (and therefore meaningless) deals with other countries.
As for talk of war, it won’t happen. But preparation for it will assist in it not happening. Canada should leak “quiet” consultations with the Finns, Swedes, and Swiss on assisting those countries in their plans for guerrilla warfare against Russian attack scenarios. The Canadian armed forces have a tradition of highly competent specialization. They should spend, oh, $5 billion on this niche. The weird thing is that they could comfortably maintain their US military ties: the more the US knows about these efforts, the better. It’s not like Canadians could successfully keep scattered armories full of secret weapons. An agile power could develop an interesting and superior drone warfare program.
These tariffs are projected to lower Canada’s GDP by 2-3%, costing each Canadian an additional US$1000 per year. Not quite the same is not being viable. They might lead to inflation and job losses in both countries.
At most, collecting these tariffs from Canada and Mexico will bring $200 billion to the US (according to The Economist). That could lower income taxes for Americans… by 2%. Of course, Trump wants to pass $5.5 trillion in tax cuts, “which will stimulate things to bring in an estimated $3 trillion in revenue” through the magic of lying. Is that what happened last time he did this?
How much will inflation go up and end up costing the average American? More or less than a hypothetical 2% savings on income tax? Also, do you think the average American will be excited about paying more week in and week out for goods vs seeing a bit of savings once per year?