We have more details from Trump regarding tariffs. Let’s discuss what we know and don’t.
Trade War Details Emerge
The Wall Street Journal reports U.S. Tells Canada of New Tariffs as Trump’s Threatened Trade War Escalates
The U.S. notified Canada that it will be imposing a 25% tariff on all imports starting Tuesday, and a lower 10% tariff on Canadian oil and gas, Canadian officials said, as Mexico also braced Saturday for punitive duties from President Trump.
Canadian Prime Minister Justin Trudeau was made aware Saturday that the Trump administration was moving ahead with the tariffs, said Ontario Premier Doug Ford. U.S. Commerce secretary nominee Howard Lutnick made the call to the Canadian government, Ford said, citing Trump’s concerns with fentanyl coming across the border.
All eyes were on the White House on Saturday to announce the tariffs after Trump made clear Friday he intended to follow through with them. Speaking in the Oval Office on Friday, the president suggested the Mexico-Canada-China tariffs would just be the beginning, pledging that the U.S. would impose tariffs on computer chips, pharmaceuticals, steel, aluminum, copper, oil and gas imports as soon as mid-February.
The announcement for those sector-based and EU tariffs appeared separate from the duties on Mexico, Canada and China that he said would be announced Saturday.
In the short-term, leaders in Mexico, Canada and China—and CEOs of American companies—were hyperfocused on whether the president will include carve-outs for major industries that have lobbied him hard in recent days. His team has been in negotiations over how to potentially dial back tariffs on those countries from the across-the-board version the president has pledged, but officials have warned that Trump may still decide to go through with a full-throated approach.
Canada and Mexico combined supplied about 28% of U.S. imports in the first 11 months of 2024, according to Census Bureau data. China accounted for an additional 13.5%.
On Friday, Trudeau reiterated that Canada would have a “forceful but reasonable” response to U.S. tariffs. He warned that the Canadian economy could suffer. “I won’t sugarcoat it,” he said.
Mexican President Claudia Sheinbaum, meanwhile, said her government is ready for Trump’s tariffs and would respond in kind.
What’s Clear and What’s Not?
Many tariff details are still are unclear. I suspect on purpose.
But one thing is clear: No nation can count on Trump to honor treaties or any commitments he makes.
Trump just trashed the USMCA treaty that he hailed as the “best trade deal in history.“
Welcome to the Dumbest Trade War in US History, What’s Next?
This morning, I commented Welcome to the Dumbest Trade War in US History, What’s Next?
In response, a reader friend commented “Trade war? This is not about trade. Listen to Kudlow.“
I replied: “It does not matter what anyone thinks this is really about. What matters is Trump broke his own deal and cannot be trusted in any deal he makes. I fail to understand (other than TDS Type II), how anyone can defend this.“
A second friend accurately commented …
“Trump is making no pretense at all of following the law. He’s flinging tariffs for reasons unrelated to trade which violates the treaties. What he’s really doing is trying to dynamite the world trade system which runs based on legal treaties. It’s crazy.”
People can cheer these tariffs or not. But I would not cheer this even if I agreed in principle.
The US Senate ratified USMCA by an 89-10 margin. Scrapping the deal was not legally Trump’s decision to make no matter what pathetic excuses he makes.
Something is lost when the entire world understands that Trump may not honor any deal he makes, even ones he personally negotiates.
It’s pointless to sign a deal with Trump. There will be long-term ramifications of this reality, and they will not be any good.
Related Posts
Yesterday, I noted Seven Charts Show Tariffs Would Harm the US Auto Industry
The CATO institute does a great job explaining why tariffs on Canada and Mexico would be a very bad idea.
New Tariffs on Computer Chips and Semiconductors
Also note Trump Announces New Tariffs on Computer Chips and Semiconductors
It’s not like we can get advanced chips anywhere else. Thus, US customers will pay more than anyone else in the world for chips, and computers too.
How exactly is that supposed to help the US?
Thanks for acknowledging Trump is violating treaties. Unfortunately, he isn’t unique in that. The old NAFTA was violated several times. The US has seldom, if ever, lived up to any treaty it has signed. Where are those “missing nukes” that the Non-Proliferation Treaty requires being under control, and why is the US not sanctioning Israel, a non-signatory to the Treaty, for having nuclear weapons?
Mexico has fired many shots at us and all our leaders have done is ignore and shrug their shoulders. For 40 years Mexico has worked to undermine our country. It is an act of war to send all the drugs they do, and especially fentanyl. It’s is an act of war to kill 100k Americans annually. It is another act of war to send 15 million illegals across our border in 4 years. Trump has to act in our best interests and he is. We can argue the method. Biden was supposed to act. He refused, ignored, and pretended away the dangerous problem. We are having big problems with Canada as well, albeit to a lesser extent but the same problems. It’s needs to stop plain and simple. Mish, feel free to come up with better ideas. Slinging mud won’t fix a damn thing.
Mexico and Canada are not responsible for guarding US borders, they are responsible for guarding their own borders. Historically, Canada had more drugs flowing from the US into Canada than going the other way. The US did zilch to stop that. Drug busts, including those on “manufacturing” sites, are routinely in the news in Canada, because its a big problem in Canada as well..
They make our cars there, yet apparently the country is still a shit whole because they never stop coming. but then again, mexico is using the leverage of letting every migrant from any part of the world to come through the mexican border. And that is not hyperbole or a Trumpism. That is a fact engineered by NGOs with the help of the United Nations. I don’t really care about Mexico right now
We should put all those drug addicts in jail. Those that are still alive and taking Fentanyl. If our citizens weren’t such lazy drug addicts, there would be no drugs coming in from Mexico!
I have no problem getting drug addicts treatment or forcibly incarcerating them, not necessaryily with rapists and murders but yes, forcibly get them under control. No problem
It is too bad the US spent the past 11 years meddling in the affairs of Ukraine starting with encouraging the Maidan Revolution of 2014. The $200 billion spent promoting conflict with Russia could have been better spent defending our own borders.
How long will Germany want to keep importing expensive LNG from the US? Will the next government (after this month’s national election) decide that it makes more sense to repair the Nordstream pipeline and resume importing much cheaper Russian LNG.
Opinions are like a holes everybody has one.
@Mish
Whaddya think of this
https://www.zerohedge.com/geopolitical/trumps-big-stick-strategy-will-make-america-respected-again
?
It will make the US more feared but less respected.
You do not gain respect from breaking treaties that
What a group of people the boat is sinking and the band plays on and cheers everywhere……Chinese black swans anyone ?
Still am waiting for that clause in trade deal which says illegal migrant, terrorists coming across border, human trafficking and illegal drug smuggling are covered items.
Someone illuminate me, please.
Erm.. Trump is imposing tariffs, which are like a highly regressive tax. At the same time, he is going to cut income taxes, which favor the rich and the super-rich while, at best, throwing a few crumbs at the poor.
This is basically the continuation of Reagan’s policies. So, what’s there for right-wing douchebags to dislike here?
What’s there to like? Illegal alien deportations that never happened under Reagan, although promised, along with star wars for MIC douchebags. .
LOL. As if there will be anything done to impact the MIC douchebags this time around! And the deportations will be few in number compared to the actual workforce in the country. All that will be achieved is the further victimization of immigrants, rendering them (AND the American workers as well) more vulnerable in terms of pay and worker safety, to the delight of the capitalist bosses.
Somehow the polloi believes tariffs sanctions or whatever slogan they chose is going to bring jobs home again the problem with that logic is they forgot what Steve Jobs reply was to the question of making phones in the us…I think he said the third of never …
Yes, as long as Trump or any other MAGA politician occupies the Oval Office, America’s word cannot be trusted. Unfortunately our trade partners must not back down and validate this unjustified “shake down” or risk a future of “Great Power” hubris and abuse. This tariff gambit by Trump must fail, but unfortunately failure means choosing pain now for gain later.
A deeper side to this problem is, the underlying US political system says, every 4 years, the risk to other counter-parties surfaces all over again. The signalling is horribly executed, and in a sense, a design flaw, a downside of democracy that was latent for a century until the 1990s. This is the product also of a failure of the Congress to do its job and reach consensus, leading to the rise of the executive orders regime. This is a bipartisan failure. But that goes back to the masses who do not comprehend and insist on the serving of their interests. They are instead ignorant self-absorbed cheerleaders for their supposed “team.” So it is a very system-wide, democratic and republican (small “d” and small ‘r”) decay and failure.
I am old enough to recall the political environment of the 1980s, 1990s, and 2000s. I cannot think of a parallel when it comes to a President blatantly having no regard for, not only treaties and agreements of prior administrations, but in Trump’s case, having no regard for agreements entered in by your prior administration. I honestly believe that prior administrations of the 80s, 90s, and 00s understood that they were temporary stewards of the executive branch of government and that the career civil servants who do the work of the executive branch from administration to administration maintain the institutional experience and knowledge which maintains order and consistency that one would expect from the largest economy and most admired democracy in the world. Trump turns this on its head. He seems to think that he and his executive branch leadership “own” the executive branch and can do with it what they want with no regard that they are just temporary stewards of that branch of government.
Trump sort of reminds me of Richard Nixon, who was deeply paranoid of domestic “enemies”.
America’s word could never be trusted. Ask the Indians.
I do not understand Trump’s tariff agenda. I thought that Trump preferred bilateral treaties. I understand that the threat of tariffs may provide leverage in bilateral negotiations. I hope that Trump is just using tariffs as a negotiation tactic rather than as a new policy.
Explain why the United States needs to create leverage when we inherently have more leverage in most agreements than any other nation? I contend that Trump likes tariff threats because they are expeditious, whereby using our inherent leverage as the worlds largest economy and most affluent consumer market requires diplomacy and negotiation, which take time require dealing with realities as opposed to populist misrepresentations and gaslighting.
This attention-deficit reality wrestling show tough-guy style got him elected.
Slowly but surely the good US is losing the crown, all it took was a Chinese black swan … go ahead with more tariffs.
Trump is behaving like a school yard bully. It is only a question of time before other countries in the world strike back in some fashion. Two of the biggest losers in this trade war may turn out to be GM and Ford. Both have wholly owned subsidiaries in Canada.
Don’t expect sympathy for Ford and GM from US workers. Both companies have shafted US workers, moved operations outside the US and produce faulty, over-priced automobiles and trucks. Nope, not today.
At Bretton Woods, John Maynard Keynes led the British delegation where he proposed the ICU and the Bancor settlement currency. In his proposal, countries that hoarded the Bancor would be taxed by having their Bancor redistributed to the victims of the hoarding (trade deficit countries). Keynes thus proposed taxing the capital side of trade/finance if the imbalances were too big. Broad-based tariffs are the same. It is just taxing the trade side instead of the finance side. Calling Trump dumb is like calling Keynes dumb. Trump is following the advice of Keynes. Trade is good. Trade imbalances are not.
You sound like the candlemakers howling at the sun
They are both dumb.
And trade imbalances would shrink if we are on a gold standard
And the chances of being on a gold standard are ABSOLUTE ZERO.
not absolute zero, but close.
Likely. However, the current economic system relies on the lowest wages for production, not fair trade. There will always be a push to keep costs down. Off shoring to the next new lowest wage country is one way, and mass immigration creating an oversupply of labor is another. The benefit of the latter is that “new” markets are created by those arriving. They have to eat and stay somewhere. That increases demand and decreases supply meaning prices (and profits) go up. Good for my investments, not so good for people who are not in my position.
Boys or boys,the Super Bowl people.
Pretty certain Trump is going to escalate until Canada knuckles under and becomes a state. This is not a trade war. The tariff model is actually just sanctions by another name.
I agree. If this move has an actual plan behind it, it cannot be economic but a flexing of power to achieve political goals perhaps.
Does this mean Mexico becomes as state as well?
Canada should quietly shutoff all oil exports and electricity exports then close the border to the US. It wouldn’t take a week before Trump would be removed form office.
If they were to get nasty they could place a no trade order on all medical isotopes. Canada makes them. We don’t.
Actually, you do. Without going into great detail and try to keep it short: Canada, the leading supplier, shut down supply and privatized the scaled down business of isotope production about 15 years ago; the next largest suppliers were Israel and the US; Iran’s Natanz was coming on line and could easily take up the shortage; enrichment needs to be to 30% for Technetium (medical isotopes); the JCPOA restricted Iran to 16%, meaning a shortage would continue and the main beneficiaries would be Israel and the US. Now you know the reason for the phony Iran’s nuclear program” mantra.
Pacific Gas and Electric derives a significant portion of its natural gas from Canada. I guess I should expect another big increase in my utility bill starting in Feb. or March.
Not to worry. PG&E can just build solar and wind energy plants.
Most of that Canadian gas is supplied by Tourmaline. Great company.
Yep….they would only have to do it for a week.
Our trade partners cannot afford to back down! Everyone knows that Trump is a bully and everyone knows that if you give in to a bully today, you just bring on more bullying tomorrow. The only way to deal with a bully is to stand up to them.
You really expect courageous action by government officials? How quaint…
The problem with “The tariff model is actually just sanctions by another name” is that it implies Trump has a clue what he is doing.
Canada may end up the eventual winner in all this, if they can hang in there.
For me the tariffs are a sideshow. They can be lifted in a moment when conditions are right. The real show is what is happening with DOGE. By the Treasury DOGE is finding all the waste and corruption that has been sucking the lifeblood out of the US for generations. When you see who is getting paid ridiculously high amounts of tax money your stomach turns. If DOGE can save a couple of trillion yearly then we will be in a whole new world and one better than what we have now. Everyone is looking at Trump’s hand holding the tariffs while few are looking at the hand holding what is really important.
Yeah, in less than 2 weeks, DOGE has figured out that career Treasury officials were told to always pay SS & Medicare payments, without concern if they were going to bad guys & terrorists. This is just the tip of the iceberg, but the tariffs if successful over the long run are important for reshoring strategic goods manufacturing. Lots more fireworks for sure.
It will be interesting to see how many federal employees take the buyout & how quickly they return to work. There was an article at the first of the year that showed all of the office space of these various agencies. One in particular had 4M SF but, on average, only 5 employees came into work.
US will win on Tariff war as US import much much more than export.
No country can match.
Yes, US has to pay some for that.
No pain no gain.
But what is it that the US will “win”? If you import more than export, at some point that will rectify naturally because dollars will be used to purchase from the US. Especially from Canada and Mexico, who have free floating currencies (unless I am wrong on that?)
Canada has had a floating exchange rate since 1970.
Trump isn’t breaking the deal. There was a clause in the agreement that under an “emergency” the parties could get out of the USMCA. So, it is silly to say other countries can’t trust Trump.
He declared a border emergency.
We’ve just been through the Covid nonsense where emergency declarations were made left and right.
As for prices, the currency markets have recently been moving to a much weaker Loonie and Peso, so that’s gonna take some of the sting out of the tariffs.
Things don’t happen in a vacuum.
So on the one hand you claim Trump is not breaking a deal because he has a valid reason, and on the other you justify the move because, while it may be nonsense, it’s fine to do nonsense declarations as others have done them? It can be one of them at most, they cannot be true at the same time: either he is using a valid reason or a bogus one (and yes – I believe the ’emergency’ at the border is no reason for tariffs under the existing agreements).
bullsh*t
There is no “emergency”
You are stating there is no emergency at the border?
Was that during the whole Biden Admin?
Is that now because we are enforcing our border a lot better under Trump?
The Mexican are more obese than we are, especially the young ones, bc they eat a lot of avocado with carbs and they are binge drinkers.
I eat a lot of mexican food in the US. Today I gorged on Kansas City BBQ and jazz music and just got back from a steakhouse a little while ago. Topping the day off with Maker’s Mark. Those mexicans don’t have nothin on me! If I get an drunker I might tear this PC apart to find the cookies.
You are starving. The PC Cookies are digital, so you have to imagine that good taste.
Trumps first book “The Art Of The Deal”, his second book “The Art Of The Deal Breaker”.
In less than 2 weeks Trump has destroyed America’s relationship with their 2 neighbours and largest trading partners. That’s impressive even for Trump.
I can tell you Canadians are pissed, no negotiations, unbelievably punitive and what will be economy damaging Tariffs on Canada using the excuse of Fentynal and illegal immigrants. I thought Trump and the Republicans said the illegal immigrants and Fentynal flooding across the borders was due to Joe Biden and the Democrats border policies? I guess now it’s because of Canada and Mexico? Whatever excuse they want I suppose.
You say all that like it’s bad or something.
God forbid they blame the insatiable US drug market.
I believe you over estimate the value of our ‘trading partners’. They have stabbed us in the back time and again. Sure, they smile in our faces and make hollow promises. Then they take advantage of our trade delegations and walk home with sweet deals.
Roughly 75-80% of the things Canada and Mexico make come to the USA. Only 24-28% of the things we import come from Canada/Mexico. Can you say leverage?
We lose 25% and they lose 75%
Fools label this “winning”.
Two of those things Canada exports to US are Electricity and Oil, yeah I can say leverage, can you say cold and dark?
Don’t forget natural gas.
Union strikes and crimes were ripping us apart. The federal gov was not able to solve the problems. To reduce risk we shifted our industries to China, Mexico and Canada creating risks in the flyover areas and we blame them for our drugs problems.
A strong middle class when one working family member could support the family was simply allowing the peons to live too high on the hog. The rich had to do something, they did. The rich destroyed the middle class of the 50’s and 60’s and will not be satisfied until they are exclusively the only free people and the rest are slaves.
More dollars bouncing around the US. Every dollar that stays here bounces around on average 6 times. Short term it will hurt. Long term the economy gets stronger. People become resourceful and find ways to keep the dollars bouncing around here.
well i wish they would bounce my way for a change instead of bounce off
The beginning of this is to put pressure on them to take the illegal aliens. Short term pain for long term gain. Anyone whining about this is more worried about their equities than the long term health of the country.
I’m happy to pay more for American made products. Slave labor so everyone can have a cheap iPhone is morally reprehensible
Will you be cheering when inflation jumps?
Yes, because the combination of devaluing welfare, government layoffs and reshoring jobs is how we employ all Americans at productive endeavor.
Mish, when inflation kicks off these folks will either 1) proudly accept the struggle and cheer or 2) be silent about it.
They are willing to accept pain so long as the pain comes from thier LORD. Anyone else who brings them pain is a devil.
Such is the peasant mind.
The US has experienced inflation for years, all in the name of ‘better government’. (More government, really.) So if this coming inflation is caused by putting pressure on our neighbors to stop the flow of drugs and sex slaves, I say so be it.
Pretty sure they are at the table for a few more days. It is negotiations and if they don’t get the tempo up they don’t get the deal. Everyone needs to be stressed before it’s done. It might still fail and result in tariffs on Tuesday, but we ain’t there yet. (like Stu said).
Trump doesn’t want negotiations. He wants tariffs.
25% on everything from Mexico and Canada. Except Canadian Energy. Only 10% on Canadian Energy
Maybe that’s because Canada exports 4 mbpd of oil to the US, while Mexico exports just 0.5 mbpd of oil to the US.
Now that Canada and Mexico are retaliating, lets’ see if Trump goes to 50%, or 100% tariffs.
If so, all three economies will soon be shut down.
I have a post on oil coming up.
Thanks
Wonderful. One of my favorite topics! Looking forward to it. There is always more to learn.
– We have more details from Trump regarding tariffs.
– The U.S. notified Canada that it will be imposing a 25% tariff on all imports starting Tuesday 2/4/25.
– The U.S. notified Canada that it will be imposing a lower 10% tariff on Canadian oil and gas.
– Canadian officials said?
> That doesn’t “Add Up” A 25% T on ALL Imports, starting 2/4! BUT THEN? Only A 10% T on All Imports OF OIL & Gas?
>> So is it a 25% T OR 10% T on ALL or Just SOME Imports?
– as Mexico also braced Saturday for punitive duties from President Trump.
> What For Mexico does not know, but apparently they are braced for it. Possibly T’s on something?
– Canadian Prime Minister Justin Trudeau was made aware Saturday that the Trump administration was moving ahead with the tariffs.
> Oh Good, so Much Like Mexico, they are aware of nothing at the moment?
– All eyes were on the White House on Saturday, after Trump made clear Friday he intended to follow through with them.
> Hmm… Promises Made; Promises Kept I suppose, but we really don’t know anything just yet, in regard to hardcore, actual “Details” Do We? I suppose He eluded to some possible Suggestions…
– In the short-term…
> on whether, will include, for major industries, His team has been in negotiations, how to potentially, dial back tariffs on those countries from the version the president has potentially pledged, but blah, blah, blah…
– On Friday, Trudeau reiterated that Canada would have a “forceful but reasonable” response to U.S. tariffs.
> What T’s Specifically again? Why Forceful? Is the U.S. being Aggressive? How do we know? What did you do?
– Mexican President Claudia Sheinbaum, meanwhile, said her government is ready for Trump’s tariffs and would respond in kind.
> OK, more normal and Trump Like. Let me SEE WHAT YOU GOT FIRST! OK, NOW we can and will discuss things moving forward. Measured!
– What’s Clear and What’s Not?
>> Most Everything is very unclear, but it’s the “Specific” Details Mostly.
– But one thing is clear: No nation can count on Trump to honor treaties or any commitments he makes.
> Not so just yet, as He hasn’t “Officially” Did Anything. Nothing Detailed And / Or Specifically Targeted and Dated, and Approved.
– Trump just trashed the USMCA treaty that he hailed as the “best trade deal in history.“
> Not Yet.
– How exactly is that supposed to help the US
> Nobody Knows just yet, as nothing as been firmly negotiated, written up, signed off on, sent out for Approval, and got it back Approved with Exceptions to be discussed, and some minor details changed Etc.
No “Cart before The Horse” Please, as we do not know much at all just yet.
According to the NY Times, here is where your pain is going to start….
I’m sure there will be way more pain next week. Layoffs may start as early as Monday, don’t spend that severance check all in one place unless it’s just enough to buy a bottle of booze, it’ll be greatly discounted next week.
Major partners – So One Loses, They ALL Lose? I say nobody loses in the end, if that is truly the case, as things will get worked out (I believe it’s Trumps Plan).
Canada’s response – Was quick and very detailed in supposed objectives, but how? Is Trudeau pulling a Trump Response?
The cost of Corona, Modelo and Blue moon will go up, but the cost of American beers
and Kentucky whiskey will go down.
But no one was buying American beers because they supported trans people. So Trumpers will now support trans beers? Oh the irony is delicious.
Some people (like Trump) are so stupid that they will never be able to realize that they are stupid: Dunning-Kruger.
Seems Trudeau can now choose what he wants. Stand around and admire himself in the mirror and ignore illegals and drugs across Border or work with US Authorities to curtail drugs and illegals.
Trade volumes can get worked out in the latter and nothing can get worked out in the former.
But then again this is Justine Trudeau.
ps: Grenell appears to have worked out something with Venezuela but Canada is differwent.
Differwent as pronounced with a lisp.
My suspicion is that what we are hearing and reading in the media doesn’t scratch the surface with what is really going on. As usual, there is probably more, much more, to the story.
Canada announces $30 billion in tariffs on Tuesday, and another $125 billion in 21 days.
Cry havoc and let slip the tariffs of trade war!
https://www.nytimes.com/live/2025/02/01/us/trump-tariffs-news
The suffering will be terrible but the profits will be amazing.
Horray!!! We are saved!!! President Trump I salute you. You too President Musk.
Ain’t it great we have not one but two presidents? That means American will be great again twice as fast. I can’t wait!!!!
Technically he’s the little president… and only till he strokes out.
Watching him dance I’d say he’s stroking two dicks at once.
That’s The Double Dick Disco, an alternate dance for YMCA. It will soon be taught in elementary schools during PE.
This would not have surprised The Master: The promise given was a necessity of the past: the word broken is a necessity of the present.
Niccolo Machiavelli
The tariffs are effectively payments/contributions in support of their commitment to defense spending of 3.5% of GDP. Canada should announce that it will massively increase its defense, drug, and border security in return for a drop in tariffs. Canada gets jobs instead of making tariff payments to the US. The US gets defense spending helping our budget situation and better security. If not, Canadian jobs will shift to the US which benefits our working class while the US consumer pays a portion of the tariff (depending on the exchange rate drop). But taxing imports is better than taxing income because young working class people should not have to bear the tax for wealthy old retired people. Also just found out that Canadian Crude oil is dropping big time (basis to WTI) so tax burden falls more on Canada.
Good Lord, tariffs are a tax on US consumers.
Hurting Canada (and the US) will not help Canada spend more on anything, especially defense, if this action causes a Canadian recession.
So, think again.
The United States is desperate.
Exporting debt is a lousey product and the world knows it.
The tariffs will only increase debt and the necessity of increasing M2 to support that debt.
Got Gold?
I expect a lot of US corporations to file lawsuits within a week, claiming irreparable harm from these tariffs as their future orders dry up instantly. I doubt that many of them will be in support of this for very long.
They have to pay to play. Lets see… who made inauguration donations…
25% tariffs on Mexican Energy and 10% tariffs on Canadian Energy. Strange, since Trump said we don’t need Canadian oil, or anything else.
Maybe someone told him that all 26 Midwest refineries rely 100% on 3mbpd of Canadian oil.
Could a deal have been worked out, in advance, with Venezuela? Do they have enough of what we want and need?
Nope. Venezuela exports just 700,000 barrels of oil per day. 200,000 of that already comes to the US, after Biden eased restrictions on them. However, the US imports 6.5 million barrels per day. If US companies were allowed to go into Venezuela and ramp up their production, then probably within 5 years, we could be getting a lot more from Venezuela. But we can’t get much more right now.
Of the 6.5 mbpd that we currently import, 4.5 mbpd is from Canada. Then small amounts from Mexico, Columbia, Venezuela, Brazil, etc. And the Midwest states are stuck getting all their oil from Canada, 3 mbpd. Unless we build more pipelines from the coasts to Midwest states to eventually replace that Canadian oil. Also, Canadian oil is about $12-$20 cheaper per barrel. So you would be replacing it with more expensive imports.
Canada’s big hammer is to shutoff the oil and electricity, hits Midwestern refineries and northern cities. Trump will be gone in a week, two at the most.
I agree it is a big hammer. And it may come to that. But they probably won’t do it. It could also spark an invasion of Canada; something that Trump is probably willing to do.
“…No nation can count on Trump to honor treaties or any commitments he makes….”
This is a very sad development.
Something has changed in Trump’s demeanor compared to his 1st term in my view. It’s much darker.
Probably the two very suspect assassination attempts
We didn’t think he could win before… and most of us didn’t think he’d win this time. I went all in though, and brought in my goons early on to get things ready.
It’s not a “trade war” per se, it’s a “trade, fentanyl, border security, and money laundering” war. This thing is never going to get resolved if people like you don’t start clearly stating what the Trump administration negotiating position is, because the Canadians don’t get it, and neither does the media. It’s only a little bit about trade. Whenever Trump is asked what the Mexicans and Canadians can do, he never fails to mention boarder security and fentanyl. But everybody, including you, carries on as if it’s just a misguided economic policy. It’s only partially an economic policy. Money isn’t everything when people are dying in the streets and who knows who is coming over the boarder.
Here’s the thing, if the United States, the richest and most powerful military in the world can’t stop the flow of drugs then why do you expect Mexico or Canada to do it?
Here is a link to the 2023 budget for just the DEA (7000 positions, 4000 agents, 115 attorneys). That’s literally an army for just ONE agency and it hasn’t put a dent in the drug trade under the “War on Drugs” for 40+ years but somehow Mexico/Canada will solve the problem magically.
https://www.justice.gov/d9/2023-03/dea_bs_section_ii_chapter_omb_cleared_3-8-23.pdf
Perhaps the answer is to reduce demand? It’s a crazy theory but it may just work. Better yet, legalize it and tax it for better control.
This is not about drugs, or illegals. At least not from Canada. Those excuses are what Trump is using to bypass congress with “emergency” authority.
This is about Trump actually believing that Tariffs will make America stronger and everyone else weaker.
So let’s see how it all works out. What a great experiment! And, like you, I intend to profit from it.
SPOT ON! As long as there’s a demand, there will be a supplier. I am like any other man. All I do is supply a demand.
Al Capone
But I like drugs!
over doses have declined and are continuing to decline The death rate from drug overdoses just keeps on plummeting. Between mid-2023 and mid-2024 it’s dropped by close to half.
Because Narcan is everywhere now, not because fewer are using.
Over doses are down to narcan being more readily available to law enforcement and other agencies. Even over the counter:
https://www.nahb.org/blog/2023/09/narcan-over-the-counter
Drug use is increasing along with homeless drug addicts:
https://usafacts.org/articles/which-states-have-the-highest-and-lowest-rates-of-homelessness/?utm_source=bing&utm_medium=cpc&utm_campaign=ND-Economy&msclkid=573be6dedc8c1888f6b781402b2d3ec6&utm_term=homeless%20people%20in%20america&utm_content=Homelessness%20Stats
Careful, that was during the Biden admin you don’t want to accidentally give them credit.
also (and here is the study) fentanyl and heroin aint what they used to be “We conclude that shocks to heroin quality are a major determinant of the transition to the illicit opioid waves of the epidemic.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5114929
So why are Canada and Mexico responsible for what and who the Americans allow across their border? I mean really, how much cargo do we (America) inspect, 10%?
we know that if gas unleaded in the midwest goes even close to 5.00 a gallon let alone over 5.00 the republicans will be out at midterms I am NOT saying the alternative will be better
nonsense, trump says his cult followers understand the pain they must endure to MAGA. Gas could hit $10 and the cult will bear it. Whatever it takes to MAGA, no one cares how much you need to suffer, that’s the new paradigm.
And if your 401k, IRA and bank accounts tank then that too is the pain you need to bear to MAGA. Lose your job? Who cares, MAGA! Lose your home? Who cares, MAGA! Lose your social security & medicare? Who cares, MAGA!
It’s all MAGA all the time. The golden age is upon us under his ever watchful and glorious eye!
… and DEI is to blame for anything that goes wrong!
President Mush being an illegal immigrant weren’t you a DEI?
Absolutely not! Papa was rich, so laws don’t apply to me.
If Social Security is gone I’ll simply take my monthly payment directly from the bank using a firearm, unloaded of course, don’t want to hurt innocents.
Is it me or does it seems there are less rabid trump folks in comments since the election. We’re those post paid propogandists or bots?
It’s not you, the zerohedge trolls have their tails between their legs because reality is about to hit them right in the pocketbook. It’s one thing to constantly criticize an administration you don’t like but then have the one you liked act like total fools will do that to the narrative.
Those F150 pick up trucks use a lot of fuel and even a 10% tariff is gonna hurt. Just watch the stock market crash and wipe out their 401k’s and retirement dreams. I smell massive job layoffs in the near future and the only people to blame are the ones in 100% total control and power.
You reap what you sow.
Im with you but is not all that you write what Trump has been saying he is going to do? Is that Trump tapped into peoples fears and prejudices and the promise of a better USA just for them that they fell for his rhetoric ?
Happens all the time, look around the world and history. The most famous example is Germany in 1930 of where it can go so wrong. Many people think it can’t happen again but it happens on a regular basis. Smart people know when to exit, the not so smart don’t.
Seig Heil me, bro!
The hopeful and optimistic (stupid?) people get burned.
Don’t worry guys, the “transitory” inflation pain you’re going to feel the next 4 years is just short-term and necessary to fix the worlds problems to get to the land of milk and honey and a new golden age of 80m geezers lounging around collecting social security and medicare.
Speaking of SS and medicare, if Trump isn’t keeping his word on bringing the cost of food down then he may as well back track on no taxes for SS and keeping it solvent. I hear a certain Adolf admirer is rummaging through SS records over at Treasury. Gee, wonder what they’re going to do with all that data?
I suspect we’ll be hearing howls to the moon from screaming boomers about their COLAs in a quarter or two when inflation eats up their SS checks but you reap what you sow.
Next up, tariffs on the EU.
“It’s tariff turtles all the way down and inflation all the way up!”
Boomer, scmoomer, they’re at death’s door knocking loudly… A temporary annoyance, and infertile to boot. Their story is over.
The future belongs to my followers!
With Trump, what you see is what you get, or don’t?
Lol! Welcome to the show!
Looking forward to the retaliation announcements from Canada and Mexico. Followed by more tariffs by Trump! This “could” escalate very quickly. And “if” it escalates quickly, the entire North American economy could be shut down in a few weeks.
Still a chance to head this off. New deadline is Tuesday.
Always looking for the opportunities that arise from these situations.
Cost of new construction will explode We get a large amount of the lumber we use from Canada! Plan on Canada adding a big tariff on that resource And what ethnic group do you see on most construction sites??
We will have to wait and see what Canada does. My guess is they will start small with tariffs on finished goods that they import from the US. Unlike the US, where Trump is in complete control, Canada has a lame duck Prime Minister who is stepping down, and a few provincial premiers who are out of step with others. It will take some time to build a “consensus” on a more significant response from the entire country.
I don’t think they will start with export taxes on their own natural resources, since Trump is already putting tariffs on them. And the provincial premiers are not all on board with that.
They (Canada) can end this if they move fast and stop all oil and electricity exports immediately.
I agree and have said the same myself. But that is much harder to do than you think. Some of the oil and gas that moves from western Canada to the US, ends up back in eastern Canada. So they don’t want to stop those pipeline flows. Plus, once wells are pumping and pipelines are flowing, there are a lot of issues with trying to stop them, and then restart them.
Of course, if Trump keeps escalating this trade war, Canada may have no choice but to cut all energy exports off, regardless of how difficult that is.
Well I know there’s only ever been one Jewish carpenter.
We won’t need the lumber there will be no construction workers anyway.
Trump will need to be removed.
Probably. We live in interesting times. I am enjoying the show.
great lesson to explain tariffs The Journey of an automobile crankshaft https://imgur.com/a/2gsUu8s
The fun is just beginning. Russia & China now see there is no reason to even answer the phone call from the potus. We on Main Street will feel the pain.
This hurts cars made in Amerika but parts are made in Canada & Mexico.
He gripes that it’s because I was using the red phone to prank call them, but it’s really just because they don’t like him.
Can he legally break the greatest trade deal in history with Canada and Mexico?
He can do whatever he wants. There is no one to stop him. He has the courts and congress in his back pockets. Apparently he is admitting his “greatest deal in history” was actually a crappy deal.
A federal judge in Rhode Island is resisting.
Federal judge temporarily blocks Trump administration’s funding freezehttps://www.cbsnews.com/news/federal-judge-blocks-trump-funding-freeze/
Don’t care. What judge is blocking the tariffs?
It’s this how Trump operates in his private business dealings?
He can’t do whatever he wants, I believe , even his supporters in the justice system will adhere to the rule of law. I am cynical of the whole system in general but believe there is a vestigial amount of law abiding people in the legal system that will do what’s right, The real question though is are his actions legal if the trade agreement was passed by congress?
It’s Trump vs Trump. The greatest trade deal ever made being destroyed by the greatest deal maker ever. Ironically, the same person.
“He who troubles his own house will inherit wind, And the ignorant fool will be a slave to the wise of heart.”
Canada could put 25% tariff on US EVs and drop tariffs on Chinese EVs. Soon, BYDs would wipe out Teslas.
The EU can open Nordstream, and put 25% tariff on US LNG.
Let the trade wars begin…because the financial crisis is completely behind us, right?
NO. NO EV tariffs. Not happening.
They could but they won’t because that would also wipe out the Canadian Auto Industry. There’s zero chance they would do that.
Why? The Canadian auto industry is already about to pay the 25% tariff.
The Europeons don’t have the balls to cross the US. I wish they did, but they don’t.
Great start, President Trump & hold your ground. Then make the case to the American people & corporations:
It’s time to start moving strategic goods production back to US shores.
For now, though, expect to pay more for your avocado toast & a whole more.
The expected TDS Type II view
Wait! YOU’RE ON RECORD saying the US needs to manufacture more strategic goods, right?
Well, you might have a better way than tariffs, but your TDS type I isn’t going to make your theories of how to do this better.
From what I can remember though, you don’t really have a coherent strategy for accomplishing this.
But feel free to keep bashing Trump & his tariffs. Each month that passes will review who’s right & who’s wrong.
Don’t want to speak for Mish but in many ways he has already answered this, the FREE MARKET should solve all of these problems. That’s the ONLY strategy that works. Socialism, communism and all the other central planning systems always fail.
Trump is the new central planner and it’s doomed to fail. YOU will be proven wrong. It’s a mathematical certainty.
THERE IS NO GLOBAL FREE MARKET & NEVER WILL BE. IT’S A JOKE FOR MISH, YOU OR ANYONE TO POINT TO SUCH AN ABSTRACT POSSIBILITY.
And certainly, a pie in the sky concepts isn’t going to bring production of strategic goods back to America, so it’s NOT a real plan. It’s cheap talk & posturing.
PHARMA is the #1 product(s) that we need to 100% as rapidly as possible get away from buying from China. The answers, of course, are very complex and tariffs are just the beginning.
Now, Trump talked about the importance of Pharma in the last year of his first term. My biggest disappointment with Trump will be IF he doesn’t present to America soon a grand plan. As I’ve said, he needs to put resources into recruiting American’s into replacing illegals in residential construction. This like most things will take years to accomplish without tanking that industry. I’ll certainly watch the State of Union speech, since this is where the case will be made on 3/4.
I have my doubts, but the US has been behind the 8 ball ever since 2001, when China was admitted into the WTO.
Bring production back to America? ..easy to do it…just tax 100% all WOKE driven corporations producing in Mexico, Canada and China…and voila, problem solved !
“Woke woke woke” sings my little wokebird! Sing for me!
Even if, after your depression, you were able to bring back all the manufacturing to the US, where would you find the labor force. It could take a generation to rebuild the skills and (frankly) desire for those jobs. Especially since immigration is off the table.
Time to watch Ferris Bueller’s Day Off again.
https://www.youtube.com/watch?v=uhiCFdWeQfA