Carney has a huge card, two if he chooses to play them.
The US Is Not Energy Independent
The US is a net exporter of energy (barely), but US refiners are dependent on imports of sour grade crude, mostly from Canada.
In terms of overall trade, the US has a trade surplus with Canada excluding oil which Canada sell the US at great prices.
Trump on the Keystone Pipeline
Back from the Dead
Bridger Pipeline
Trump on the Keystone Pipeline
Truth Social: I have paused the 50% Tariffs against Canada, that were scheduled to kick in tomorrow morning for a three day period, based on the fact that Canada and the U.S.A., subject to the finalization of documents, have a DEAL! The great Keystone XL Pipeline, long ago killed by Sleepy Joe Biden, may be awoken from the grave! Thank you for your attention to this matter. President DONALD J. TRUMP
Aug 18, 2026, 8:15 PM
Canada Has Something Trump Wants and the US Needs
Canada has two things the US wants and needs, oil and auto parts.
Those are enormous cards. Yet, we see the same silly focus and analysis that we had regarding China and Iran.
Historical Incorrect Analysis
- On China, recall the nonsense that Trump held all the tariff cards because the US imported billions more from China and vice versa.
- China responded by shutting off rare earth elements and Trump backed down in a week, called in advance by me.
- Regarding Iran, Trump has declared victory over 40 times. His blockade was supposed to drive them into submission in days, then weeks.
- Now, the blockade is for as long as it takes with the price of diesel skyrocketing.
We see the same reasoning now. But the setup is more like the setup with China, than Iran.
AI models mistakenly look to failed answers that went wrong before, namely how much bigger the US is.
The correct model involves how much pain can TACO Trump take.
Hey Grok
That answer by Grok is flat out ridiculous. Of course there are scenarios. The question is how likely are they.
A Three-Day TACO
Spot Diesel Prices
Spot/futures diesel in the Midwest would spike within hours to 1 day on a full Canadian cutoff, driven by tight distillate stocks (~28 days cover regionally) and 70%+ heavy crude reliance. Retail lags 3-7 days as stations adjust. Refinery runs hold via commercial stocks for ~2-3 weeks before cuts, though diesel yields fall earlier. SPR grade/location limits help. Canada still takes the larger relative hit first.
Again note Grok’s repetitive thinking.
“Canada still takes the larger relative hit first.”
Is a relative hit what matters? Carney has the option to go on Canadian National TV and explain what happened, why he is doing what he is doing and the ridiculous last moment US demands.
Trump faces the ire of every farmer, every trucker, and every auto worker when Canada shuts off diesel and auto parts.
Yet, Grok insists there is no way for Canada to win.
Reflections on AI
“Sometimes you have to push Grok to remember key articles or elements of an argument to get it to see that its ‘factual’ response is off the mark. I have done that both with Claude and Grok and gotten better responses. You have to keep feeding the machine the data until the machine realizes that something being argued is not correct. Never accept anything at face value. It also helps you to gather the data you need to get a logical answer and then continue to press those points.”
Critical Dependencies Not Percentages
There is an obvious risk to my proposed strategy.
But I stick with my assessment, Trump would TACO quickly when faced with an immediate spike in diesel prices to a record.
Don’t Be Stupid
Carney on What Happened
“They made changes [to the deal] including threats on the French language, the Quebec culture and Canadian culture. That is not acceptable.”
The US also demanded a say in Canada’s deals with other countries.
No nation would ever accept that.
A Lose-Lose Proposition
Trade wars are a lose-lose proposition.
I have many times stated that the correct response to tariffs is to lower them to zero no matter what other nations do.
I now wonder if that applies when dealing with an economic madman who does not honor any deal he makes, and always wants more.
The question is moot however, because politically speaking it is impossible to not retaliate.
In this case, only 18 percent of Canadians don’t want Carney to respond.
How Should Carney Handle This?
- Address the nation.
- Announce a cut off in energy supplies to the US.
- Threaten to cut off auto parts delivery if Trump retaliates.
I believe that combo would quickly restart negotiations.
Is it risk-free? No, of course not. But caving in to Trump’s escalating demands is not risk free either.
Piecemeal retaliation is what team Trump is depending on. On a piecemeal approach, Canada suffers much more pain than the US.
This is why Canada needs to respond with massive leverage quickly, figuratively smashing Trump’s face with a brick, and reserving one key card (auto parts) as a threat.
Key question
Q: Does Canada even need to do this, or is a threat on national TV sufficient?
A: I suspect a credible threat would do it.
A Rancher’s Perspective
True Words
Fact Check on Trump’s Claim “Canada Ripped Us Off”
Please see Fact Check on Trump’s Claim “Canada Ripped Us Off”. What’s the Real Story?
For 2025, the total balance with Canada was – 53 billion. But the oil balance was -84 billion. Excluding oil, the US has a goods trade surplus with Canada of 31 billion.
Q: Why exclude oil?
A: Because the US needs Canadian oil and gets it at bargain prices too!
Related Posts
Canada at War with US Says Carney, Why the Trade Negotiations Broke Down
Canadian Prime Minister Mark Carney explains what happened.
Lunatic Talk
Also see Trump Threatens to Use the Military on the US Bond Market. What!?
Trump responds to a reporter’s question with an answer that makes no sense.
Canada will not shut off oil to the US, why would they.
They could charge more dollars for the oil.
Perhaps Canadian dollars, which should make those dollars more valuable.
Can the Americans buy Canadian dollars somewhere? (/sarc).
I’d like to hear more from PaPaDave on this topic as he is so knowledgable as a shareholder and investor in Canadian oil companies”
Would shareholders or owners of oil companies be OK with this?Would local governmental agencies support oil workers in a “Shut in”How much damage would be done to production infrastructure and wells?How much storage is there to absorb production?Can Canada simply impose an export tax?Could revenue from an export tax be used to improve export facilities?How quickly could export pipelines be built to both coasts?Isn’t there a Canadian pipeline to the western coast that was stalled? How quickly could it be resumed and finished?
I digress… Of course the largest question on Canadians minds would be the same as American minds. Will the Trump regime ignore election results and refuse to leave power in two years? I do not see a mechanism in place to remove an administration that has no honor or ethics.
Canada and the US may be in for much more difficult times than any of us could predict in two years given Trumps lack of respect for the rule of laws that constrain him. Yet he uses an iron fist in his treatment of others. Trumps worship for dictators and his statement “I will be dictator on day one” plus his patterns of sexual and verbal abuse should worry every freedom loving person on earth.
The correct course of action for Canada to take is impose a few minor tariffs to respond to the silly USA tariffs, and then just wait. Neither side will want to mess around with auto-parts or oil sales. The best course of action, was to just walk away from any “negotiations” with Trump people, since those people cannot be trusted.
Really, nothing Trump does or says can be trusted. This is the key. At some point, Americans are going to have to deal with the Trump problem. Here in Canada, we are *way* too dependent on USA, and we should work hard to reduce this dependency. Canada should begin to unwind various arrangements it has with American agencies, and work hard to establish more effective export markets in Asia, Europe and South America. Truly, a tariff-wall, built by unwise American action, is actually an opportunity for Canada. We should buy Japanese cars and trucks that we build here, and also import vehicles from China, if USA decides to wreck the auto industry trade. The most popular cars I see on the roads, seem to be from Korea.
USA trade is so easy and simply and low-cost, but it is fraught with rising levels of “idiot-risk”. We would have much better leverage in any future trade negotiations by tying them with security agreements. The CRE (Communications Research Establishment) records all outbound USA telecom traffic and hands it to the NSA, and extensive American radar stations exist in the far north. We could just end that activity, or at least suspend it until the “Trade War” is resolved. The whole “5-eyes” thing could be put on the table. We get no benefit acting as spies for USA, if the USA becomes the chief threat.
It’s clear now that Trump and his people are abusive and dishonest folks that cannot be trusted, so we really will have to just dial USA trade back for the next two years, until this fool is removed by American voters, or perhaps sooner by an “act of God”, as the insurance companies like to say. Of course, it could all get worse, also. Maybe an even worse demagogue is made POTUS, and he decides to invade us, like Putin has done to Ukraine. Then things will get quite spicy. (Watch Canada suddenly change it’s gun laws, and all those ‘misplaced’ or ‘lost’ items to re-appear magically…). We doubt that scenario will happen. But a lot of folks here are pushing for the Swiss model of sovereignty, rather than our traditional Argentina/Italian political model.
Mr. Shedlock is correct, when he suggests that the correct response to tariffs, is to just have no tariffs at all. Even if one side puts up tariffs, the other side should not. Tariffs are an absurdly stupid tax, and harm economic benefits for everyone. Tariff-free trade has always been a Conservative platform, because it lets both nations be richer. Both Economics school, and the NAFTA experiment demostrate the mechanism of this. Trump is just being a classic demagogue, seeking false enemies to enrich himself. We find it curious that this person remains in power.
good analysis
We find it curious and distressing that he remains in power as well.
Who does Trump work for?
“Who does Trump work for?”
Epstein.
as i have repeated, democracy works. always has since ancient greek times. amerikans are assholes and elected him twice. 3 times if you believe the amerikan cult leader.
What if the faucets run dry in Denver?
And LasVegas, Salt Lake City, Boulder, Phoenix, Tucson, or Albuquerque?
businesses will find a way to bring water via truck, or rail or whatever from wet areas. hell, we invested back in the 80s in a crazy scheme to deliver a chunk of an iceberg from alaska to japan. so the crazy rich asians could have million year old ice cubes with their johnny walker BLUE. ha ha ha. not a joke. but yes frosty those place are unsustainable as are the farmers and golf courses, in those areas. i spent 12 glorious years in phoenix. left a decade ago. sold off all my properties there 2 years ago. my main reason was H20. OR LACK OF.
That’s the problem with AI i’ve noticed. If you don’t have an idea what you’re talking about it can really steer you wrong or completely off course. You have to be careful with it as it’s def not all knowing. I use it mostly for machines, designs, etc. One minute it will say here do this, then you realize it’s not even possible and then it says ‘oh yeah my bad’.
How can we trust a thing Trump does? He’s probably found the next secret grift to divert funds to his offshore accounts via his pipeline buddies, so now it’s worth his time to adjudicate KXL.
If Carney actually shut off oil and electricity exports to the US my guess is that he’d get an invite to the White House to explain in person why they shut off the oil and electricity.
If he declined, it’s only about 110 miles from Fort Drum (a major base in upstate NY near the border that’s been strategically placed there forever for reasons like this) to Ottawa. He could be brought Maduro style in about 1 hr or so if he refused the invite.
Of course it will never happen (shutting off oil/electricity). Instead Canada has already announced they are going to start handing out free money Covid style to deal with the tariffs. Probably going to get some raging inflation and job losses in the short and medium term in Canada.
So America becomes a Nazi Germany shaped problem for the world to choke out and punish. I’m sure that’s a genius idea given der Fuhrer’s popularity at home! You are a very mentally well regarded person, I can see.
Perhaps TexasTim65 can refresh us on his not paying income taxes. Unfortunately theres no history to re dig this up but TexasTim was elated initially when Trump said said tariffs will negate Americans paying income taxes.
Not sure how thats working for TexasTim right now nor in the future.
What is it not? 1.4 trillion of taxes collected go to just pay debt servicing.
There wont be any inflation, job losses, etc. in TexasTims world in the US regarding US 50% tariffs. Thats TexasTims world..
Read it without noting the author. Aye, but of course!
Tim seems to be about as smart as a supermodel is fat so he probably still thinks he doesn’t have to pay. I mean, the IRS hasn’t caught him yet at least!
USA already is the world’s nazis. count up the millions of homeless and dead peasants we have bombed since nam all the way to school girls in persia. amerikans are so fucking arrogant and ignorant and nihilist.
i don’t think there is a leader in the world who takes amerika and trump seriously anymore. the empire has gotten pummeled in gulf. even abandoned military bases that were there for decades. the empire is crumbling. trump is just our current nitwit. biden and obama and W the dumber, of the bush family were just the warm up acts. canada doesn’t give a fuck about usa anymore. we are assholes. who elect assholes to do asshole things.
It ain’t that simple. Speaking as an Australian, I can assure you that we take you seriously even when we are horrified by what you do. I’m sure the Canadians feel the same way – we are all British subjects after all. We speak English, and we have all learned the same nonsense at school. We have all been through women’s lib, and racial equality, and the war on drugs, and the liberation of the sexually disturbed, all the same sick nonsense as you have. I think you led us into most of it. Like you, we have the “rule of law,” which means the rule of a corrupt priesthood who should all be bayoneted. We were, in our small way, there with you in Viet Nam when your corrupt President Johnson was using up munitions for the benefit of your arms companies.
Trump may be crude, but he is intelligent, and like Nixon and Reagan before him, he is trying to reverse the trend of decline. Sometimes it works for a while. I wish he realized how serious the decline in the value of your fiat money is likely to be.
What makes you better than most racist fucks in this discussion forum is that at least you openly admit being a racist fuck.
At least that counts for something.
He also admitted to being a pedophile. Probably why he admires Trump.
Wonder why he hates women’s lib. Hmmmmmmmmmm….
Don’t forget pedophilia.
Just as a reminder, this poster is a self-professed pedophile:
He is neither intelligent nor educated. Hence his popularity among the window lickers.
We might like him because he’s not “educated” – that is, he doesn’t talk the same sick, ill-informed nonsense that most “educated” people do. Whether he is intelligent may be a matter of opinion. To me, he seems to have practical intelligence: he knows how to get things done. I don’t have much of it myself, and I have known at least two people who were very good at getting things done, but whose words could easily be shot to pieces. We need people who can get things done.
i vote in italy. i have visited australia. you kids down under are infants in self government. i do love perth and melbourne, though. and the sand dunes.
Well, we’re a former convict colony, while America was originally a refuge for people with strong religious (Christian) opinions. Those origins do still have an influence, I think. Our police tend to assume that we are all ex-convicts.
“…the liberation of the sexually disturbed…”
One of those sexually disturbed is your hero, the president whose proclivities you defend, Mr. LITTLE HOOKERS.
There’s nothing disturbed or unhealthy about an older man liking younger women. What he does about it may be good or bad.
Ah, use military force to kill people who don’t submit to our demands. Truly patriotic, Trumpian resolve!
Well, at least a Canadian has a a body that can be shot at, unlike, say, the bond market.
“Probably going to get some raging inflation and job losses in the short and medium term in Canada”
I’ll take the other, US inflation and job losses will outpace Canada in the short and short, medium and long term.
You have a lively imagination!
sounds like a junior HS analyst in an AP class. that was quite the imagination. Drum ain’t too far from where i live. plenty of water up these old parts.
This is beyond stupidity. It will NEVER happen.
Carney has already said this option is off the table, as he doesn’t want to risk Canada not being seen as a “reliable” trading partner. To whom, the Chinese??
Which of course is nonsense, as the real reason is because Canada has nowhere else to go with the oil. That’s why the US gets a preferred price. We have nowhere else to go with it. Can’t even move it east-west in any real volume.
This immediately destroys the economy west of Ontario, Alberta moves quickly to separate, which then spurs Quebec separatists to resurrect their campaign, with good reason. Ontario goes into deep recession, auto plants leave, and the Liberals never see power for 12-15 years.
Canadians would soon be begging to be the 51st state if it meant pumping the oil and making car parts again. Mish has no idea what he’s talking about here.
Maybe he should ask Grok how many BPD less diesel the US would have to ship to Europe to keep the US prices stable. if Canada stopped oil shipments to the US.
And how quickly the European leaders would spew their tea.
Wow, such over reactions to common trade negotiations. Canada walked away from the trade deal. I am sure they are still talking and will work something out without the hysterics some are proposing.
Actually the Ag Deisel YoY % change component is even more dramatic (as it removed the unchanged tax component). Already “up 99% YoY”!! According to Ag Consultancy Aura Trade:
“Farm diesel hit a record $5.41/gal in USDA AMS Illinois reporting for the week ending May 1, up 95% from $2.77 a year earlier. The Joint Economic Committee minority staff estimated planting-season diesel costs rose 63.2% nationwide, roughly $1.4 billion, with Illinois ($163.2m), Iowa ($151.1m) and Minnesota ($101.7m) taking the largest absolute increases. Anhydrous [amonia – key fertilizer] is still 27% above year-ago. Mid-August diesel is at its highest in a decade heading into the most fuel-intensive stretch of the calendar, so the same shock bills twice in one crop year, once at planting, once at harvest.
…Grain is trying to be repriced upward. The shock is landing almost entirely on the cost side….
Illinois Ag was much better off when Orion Samuelson was still around.
What would happen?
The Trump Cult would suddenly pretend to care very much about how bad diesel is for the environment.
The sad part is that even if Canada shut off the oil to get a good deal from Trump, Trump would break that deal in short order, just like he breaks every deal he makes.
Carney was right when he assumed office. The world has changed. Canada can no longer trust the US (just like the rest of the world can no longer trust us). Our partnership has ended. Which is why Carney has spent the last 18 months eliminating inter-provincial trade barriers and signing trade agreements with over 20 countries all around the world. It’s a painstaking, arduous, and necessary task to alter the direction of the Canadian economy and reduce it’s dependence on the US. It will take time.
In the meantime, Carney wants to strengthen the Canadian economy; not weaken it. Whatever retaliation he takes will be carefully considered to exert maximum pressure, with minimum costs.
I doubt he will cut off oil or auto parts. But we will see.
If markets tank this week, Carney won’t have to do much at all because Trump will taco.
Papa Dave – If you have to be in stocks do you think the emergent markets ETFs will fair well during a US recession?
No. I wouldn’t expect emerging markets to do well.
My cash position keeps rising as I grow more concerned about the economy. I am 45% cash at the moment. I keep selling stocks on the rips and buying on the dips. But I am deliberately buying less than I am selling. Still focusing on Canadian (and some US) oil stocks.
Thanks!
Trump tried to screw em at the last minute.
https://deanblundell.substack.com/p/breaking-trump-tried-to-slip-a-snapback
Taco: “If you don’t capitulate I will not reduce the tariffs I already slapped on you for no good reason. You should be grateful I am even considering offering you a break!”
That’s what we do to our long time vital friends — twist their arms and leave them over a barrel. What brilliance. Then the whole neighborhood can see that daddy has become psychotic.
Tool for Russian bot farms
That’s a hilarious stream of extremist radical right-wing Canadian cow pies.
Wasn’t Alberta recently talking about seceding from Canada?
Perhaps they would like to become our 51st state and enjoy protection from the Canadian meenies? They can even keep their name!
Bring in The Duke & Duchess Of Sussex.
Would you just stop, please
Yeah the massive popularity of Trump in Alberta is around 23%. Even less than MAGA in the US. Make Canada Great For Once! 😂
What does Trump’s popularity matter in Alberta? Why should anyone care?
Odd thing, when Albertans come to their senses and start hating reprehensible Trump, they also start loving Carney and develop warm thoughts about staying in Canada. And, now their once popular Trump loving Premier is at a 39% approval rating.
Canada is killing the sacred cow for political gain, just like California and diesel prices. California is sitting on a mountain of oil and gas yet they have the highest prices. They killed drilling and refining. The difference is California is staying in the US and Alberta is coming to the US. If Canada shuts off oil – Alberta becomes independent. Polymarket: $6 dollars get you $93. I will take those odds. Of course are they using Dominion voting machines.
So is the first step a pipeline from Alberta directly into the US and the second step fostering unrest and then treating Alberta like our Donbas region?
LOL
Art of the Deal
Will be on every bookshelf alongside Wealth of Nations. /s
and mein kampf. donald is as stupid as hitler on the battlefield. maybe the donald will invade russia next winter. send in our platoon of trannies. they can’t do any worse than the USMC the past 80 years
😂😂😂
Don’t forget the US dependency on Canada for Northern Bleached Softwood Kraft (NBSK) Pulp though. You can’t make useable toilet paper without it. It’s our equivalent to China’s rare-earth dominance. We could hit you guys almost literally right in the ass!😂
What companies make bidet’s?
Someone said that yesterday, too, so it must be a thing.
Or someone is trying to make it a thing.
I am old enough to remember when we used newspaper.
My grandpapy used corn cobs down on the farm.
It would be a wipe out, but a shit thing to do. Trump will have reached rock bottom.
Just as a point of order Mish, you do realize that Grok is the child porn robot getting sued right? I wouldn’t take its word about the sky being blue so the nonsense response on tariffs tracks quite well.
who in their right mind argues with Grok or any AI. i was using AI in the 1980s with NASA landsat imaging. garbage in, garbage out.
The problem with Canada shutting down oil is the referendum on sovereignty in Alberta. Alberta is already mad at Ottawa for blocking east/west pipelines and a federal order to shut down oil exports would devastate the province and push people to the leave side of the referendum.
Referendum has as much meaning as two towns in Illinois voting to Join Indiana
Yes that was discussed
Does Canada want to be invaded by the US? 😊
Given our ‘success’ in Iran, I’d love to see general Hegseth give that one his best shot. Does Canada end up with just Ohio in the settlement or does Michigan go with?
Eh?
Acquiring a Strait appears to be customary based on recent precedent. But maybe a Great Lake counts as a Strait?
Clearly NY, you think Iran will forego a chance for control of the Erie Canal?
The USA failed in Vietnam, Afghanistan, Irak and now Iran. Canada is feeling quite comfortable I’m sure, since they let themselves be guided by reality. A novel concept to the American administration.
What happened on June 19, 2022?
I have no idea.
You don’t seem to have an idea of much Jojo. Care to tell us what the price of oil was a year ago compared to now? How about the strategic reserves? And I’d love to know why you can’t seem to answer questions after showing your ass. Could it be you know you’re a fucking idiot?
OK. then please ignore the idiot. [shrug]
Remember the South Park episode where they sang “Bomb Canada”? Wouldn’t that be surreal.
Thank you once again taco for showing your stupidity when it relates to any area of importance to the American consumer.
If he has to throw us under the bus to get what he wants then say hello to permanent tread marks across your face.
“Trump responds to a reporter’s question with an answer that makes no sense”
An opinion from Dean Blundell
BREAKING: Trump Tried To Slip A “Snapback” Provision Into Canada Deal. Carney Caught It. Told Trump To F*** Off. Now Trump Is Threatening Military Force.
In April 2025, days after Trump’s “Liberation Day” tariffs, the US bond market did something it’s not supposed to do. Stocks fell, and instead of money running into Treasuries for safety, it ran out. Bonds sold off with stocks. Yields spiked. Within a week Trump folded and paused the tariffs, and he said the quiet part himself: people were getting “a little queasy” about the bond market.
I wrote then that Mark Carney, a man who ran two G7 central banks and steered Canada through 2008, understood exactly which lever had just moved, and that Canada and its allies were positioning around it. Snopes came after me. Canadian Press ran a fact check. The Financial Press rolled its eyes at the idea that a country like Canada could matter to the US bond market.
Eighteen months later, here’s the Treasury’s own data, released this week.
Canada: fifth-largest foreign holder of US debt on Earth. $459.6 billion as of June. More than France. More than Switzerland. More than Saudi Arabia and South Korea combined. In January 2025, when I started writing about this, Canada held $350 billion. Canadian money has been piling into the position ever since, which is exactly what you do if you want a seat at the table when the selling starts.
And the selling has started. Not from Canada, yet. From everyone else. So, Trump did what Trump does yesterday: promised to bomb the shit out of any country that sells US debt.
New ticker coming soon, LEGO – it will go up when Trump’s ego gets the satisfaction it wants and deserves, there will be no shorting his ego, the SEC has preemptively outlawed it.
yep my post from yesterday
As of May 2026, Canada holds approximately $435.8 billion in U.S. Treasury securities.
Canada is the largest supplier of fertilizer to the United States, accounting for over half of all total fertilizer exports each year.
Canada supplies approximately 79% of U.S. potash imports
fuck tarriffs export tax baby!
Turn Iowa blue and Kansas too
middle powers