MS Now recently hosted me on Alex Witt’s weekend show to discuss President Trump’s new tariffs on Canada, the $40 trillion national debt, and the health of the US economy. Here’s the clip, with some bullet points to follow:
President Trump’s latest barrage of tariffs puts a 50% tax on about $20 billion worth of imports from Canada, including dairy products, alcohol, lumber, other building materials, and some consumer goods. The news taxes went into effect August 22, after the two nations failed to reach a deal to avert them.
[The bond market is telling us something important. See what it is]
Canada sends nearly $400 billion worth of goods to the United States each year, so the $20 billion targeted for new tariffs is a small portion of overall imports from Canada.
The problem, however, is that this dispute could escalate and eventually lead to higher tariffs on a much larger set of goods. Canada, for instance, said it will retaliate with 50% tariffs on $20 billion worth of goods from the United States, starting September 8. Trump, in response, said he’d slap 50% tariffs on all auto imports from Canada, starting January 1. That would hit up to $50 billion worth of products, and raise prices for many Americans.
Canada has various ways of escalating measure-for-measure. Canada imports about $330 billion worth of goods from the United States, leaving plenty of room to match Trump’s tariffs. Canada could also restrict oil shipments to the United States and direct that energy toward global markets instead. That could disrupt US energy markets and hike gasoline prices.
[Check out The Weekly WTF: $40 trillion in the hole]
Another problem is that Trump is raising tariffs on products that are as supposed to face no, or low, tariffs, under the USMCA trade deal that Trump himself signed in 2020. This may be what Canadian Prime Minister Mark Carney was referring to when he said sometimes the US signature is “written in pencil.”
Why did Trump threaten new 50% taxes on Canadian imports in the first place? Because Canada retaliated against some other tariffs Trump imposed on Canadian imports last year. Some of those tariffs are still in effect.
There could still be a deal that alleviates Trump’s new 50% tariffs and preempts the Canadian response before those tariffs go into effect on September 8. But Canada is likely preparing for a new round of Trump tariffs after the midterms take place in November, and those could entail even more import taxes than Trump is threatening now.
[A Subaru capitalist takes on the “Subaru Socialists”]
That’s right, once the midterms are over and Trump doesn’t have to worry about voters any more, he’s likely to put in place a whole new set of tariffs to replace the ones the Supreme Court struck down in February. Wouldn’t that be screwing American consumers and businesses? Yes, it would raise costs for millions. Does Trump care? Apparently not.
Standing up to Trump’s bullying is good politics for Canadian Prime Minister Carney. His approval rating is around 60% and many Canadians are sick of Trump’s antics. They want Carney to go toe-to-toe with Trump.
Trump’s popularity, meanwhile, is collapsing, with his approval rating in the mid 30% range or lower. Nearly two-thirds of Americans oppose his tariffs.
Trump’s tariff policy seems dumb. Nevertheless, he persists.
Trump is old and, he cares nothing about what people think. When he won the role of leader of this country it was the best day of his life.From now on until he is finished he will do every thing to get rid of Social Security and, Medicare.These ideals have no use except to cost everyone more money and, do you think he cares.Get real!This is about the elite taking control of America.When it is all done he will bow his head and,say i got what i wanted and,i do not care if your in a bread line.The Greed has caught up to America, and it will hurt
Cogently explained!
The man's fascination with tariffs is unnerving to the rest of us. The real puzzle is why folks close to him (especially those there's a chance he might listen to) who know better don't have the gumption to set him straight. We won't know until a history of this crazy period is written years later.
"Nevertheless, he persists" (or variants on that theme) gets me every time :-)