All you need to know is that when faced with the choice between doing what is best for Canadians and what is best for their own electoral fortunes, the Liberal Party will always pick the latter. I challenge anyone to find an example otherwise, and particularly in the party's current incarnation where the pursuit of power appears to be their only goal.
I thought this was a negotiating tactic, but it's clear they saw polling that concessions and a deal we could all live with would make the party less popular than throwing it all out and going full Elbows Up supported to an infinite degree by their cheering media insisting we are at "war".
They appear willing to burn your entire livelihood and the purchasing power of the money you sell your finite life in painful struggle to obtain, to keep a bunch of lobotomized retirees in a perpetual anti-American froth thinking Mark Carney is their defending hero. Until the polls tell them otherwise, and that could take a long, long time.
Article on economic theory? Response: the LPC are evil mean people who want to poison your puppy!!! Article on best bbq recipes? See previous response.
The Liberal Party of Canada has pitted Canadian against Canadian for decades. Now it has taken aim on the Americans. We are to ignore our better virtues, and put our faith in a Party that has led to the decay, decimation, destruction, diminishment, and decline of our once-wonderful Country.
Liberal voters wete so sure that Justin Trudeau was the way to go for an entire decade, defended him up and down while he systematically ruined everything he touched, and now nobody wants to even speak his name. There's a lesson in there somewhere.
It’s 500 words without an actual reference to economics. It’s an economists perspective on what the US Supreme Court will do. Well… there is this line: “In some respects, those arguing against retaliation are correct. Putting tariffs on American imports to Canada will hurt the Canadian economy. We will all be poorer for it. Incomes will fall, jobs will be lost and prices will rise.
That’s not an opinion, it’s an analysis informed by 250 years of academic research on free trade.”
Did you forget about Pierre Poilievre's own August 9th open letter demanding that the Carney government commit to "no more caving" to the Trump administration? Poilievre would have been first in line to smack-talk the government for being too compromising with the bad-faith Trump regime.
And Pierre was right. "Caving" isn't negotiating. It's capitulation without receiving anything in return. Carney caved on several issues without anything to show for it. Pierre's point was to incorporate those issues into a broader trade deal so we could extract something of value for them. BTW, nobody mentioned Pierre. If you haven't noticed the Conservative party are not in government.
Negotiating means the exercise of bargaining leverage to achieve a desirable outcome. Being willing to walk away is part of how you exercise bargaining leverage - yet KRM seems critical of that choice to walk away.
I was the first to mention Poilievre, but KRM was the first to bring partisanship into a non-partisan subject, so my citation of Poilievre's stance was a response to that.
Gordie Howe-style deals can only be prevented by being prepared to walk away from a bad deal when the other negotiating partner is insistent on pushing for one. Therefore, KRM's criticism of the Carney government for back-pedalling on the negotiations is still unfounded.
MC had an honorable way to deal with the Gordie Howe bridge situation: simply decline to revise the previous agreement and leave the bridge unopened for however many years were required. The fact that MC rolled over for DJT and then lied about it means that he cannot negotiate, despite what he told voters during the election campaign.
And that might have been bad for Liberal polling. And now it isn't.
A deal that's seen as too compromising is really Carney's only bad political outcome here. Of course the opposition will try to paint any deal as a bad one. No-Deal-Trade-War on the other hand pretty much means there is no opposition.
I've been voting since the early 80s. Doing what's best for Canadians and doing what's best for their own electoral fortunes is absolutely 1000000% not the exclusive domain of the Liberal party. Conservatives did the same thing when they were in power. Both parties ran Canada via the PMO. Trudeau 1.0 started government run by the PMO.
Not defending the liberal party, btw. But in politics all politicians lie and it's always about getting elected.
Politics tends to select for ruthlessness to some degree, to be sure, but there are few examples where "follow the polls and do whatever it takes" is taken as far as the Liberals do. Conservatives, Bloc, NDP, and even Democrats and Republicans are constrained by ideology and principles (whether you agree or disagree with them) and are willing to white knuckle through a polling hit hoping their 'superior ideals' will be vindicated in the long run. Liberals, I would argue, are not. Doug Ford's PC's have successfully imitated this model to some degree.
That's what got him removed. He sniffed his own farts for too long and put ego over party. I'm his case he chose what was actually worse for the country than just following the polls though. Quite a uniquely bad PM.
Liked him until he stacked the Senate for the GST. and sent CF-18 maintenance from from Winnipeg to Quebec. I remember his primary polcies that were deeply unpopular at the time and for me, that's why he had the sense to get out when he did. The reform party was the result of his government's approach. I did stand at attention in three ranks in the snow waiting for his arrival at the Miltary Museum in Calgary back in 1990 and he was on time so that was pleasant. Also, a damned fine singer.
Anyone who. endured watching some of the CBC coverage of the US trade retailiations had the opportunity to watch an interview with a Quebec dairy farmer. It was instructive and utterly dispiriting. An entirely privileged individual eager to counsel more Canadian retaliation while enjoying virtually an guaranteed income , all at the expense of the Canadian consumer.
For Carney to not end Canadian protectionism in dairy to avoid what occurred last night should have been a no brainer.
No better are the buffoon Premier so keen to preserve liquor bans of Kentucky bourbon and California Pinot must confront the devastation of Canadian liquor production that is only viable if the US market is preserved.
Ultimately this is a test of Canadian realism and its capacity to actually measure whether there is no to gain from greater economic integration versus the costs of a preserving some fatuous "freedom to act" at odds with economic and geographic reality..
Carney will only provoke more costs on Canada by further retailiation. Surely, he knows this.
One totally robust and constructive action he could take is to tell those Canadian Premiers extolling further retaliation to simply shut up.
These US trade issues transcend Trump. Carney knows that too.
So now mayors are using Trump and tariffs as their new excuse for not controlling spending and to raise taxes? What a great time to be in government at every level in Canada. Blame Trump, tariffs and avoid any accountability for anything. 👍
In international affairs, game theory recommends tit-for-tat, or "dollar-for-dollar", or fighting fire with fire, but it presupposes a rational actor pursing a clear national interest. What if Trump doesn't care about the American people, or the Republican Party, or based on recent posts, even understand the concept of money? What if retaliation - using tariffs - only acts as reinforcement learning for Trump? Maybe with someone like Trump, we should try fighting fire with water. We should be "threatening" Trump by lowering tariffs and non-tariff barriers on China and the EU. When he threatens to increase taxes on Americans we should threaten to lower taxes on Canadians.
One small quibble: game theory is about choosing your best strategy, keeping in mind that the opponent or opponents also have a strategic choice set.
So, I would respectfully disagree with the notion that game theory demands “tit-for-tat” retaliation.
A Nash Equilibrium is achieved when no player can improve his own outcome, given the fixed decisions of any other opponent.
Canada’s best choice, in my opinion, is to reject the notion of tariff escalation, and to convince the Americans that a special deal is in both of our best interests. We try to improve our lot by tariffing, and then tariffing again, and again, we end up far worse off than we would have been if we had just “accepted” the tariffs in the first place.
"Canada’s best choice, in my opinion, is to reject the notion of tariff escalation, and to convince the Americans that a special deal is in both of our best interests."
I'm wondering how you differentiate this approach from Canada's actions to date, prior to the breakdown of talks in mid August?
We have to first make assumptions about the goals of the players.
Let’s assume the Prime Minister wants the best access to the U.S. market with the least damage, cost, or transaction levies.
Let’s assume that the Trump Administration is committed to 1) charging for access to the U.S. market, and 2) reducing the size of the trade “imbalance” between the two Countries.
So, given those assumptions, what is the best response of each, also assuming that one player knows the incentives and goals of the other?
I think the Prime Minister adopted a strategy of waiting out the Trumpists. Strategic patience I think he called it. It was not a good decision given that Trump can influence the terms of trade, and the timeline. Mr. Carney’s plan was vitiated by Mr. Trump’s deadline of August 19th. So, clearly, that was not Canada’s first best option.
Assuming Mr. Trump wants a deal that “benefits” America, Canada would have been better off, in my opinion, to have offered the Americans a chance to investigate an unexpected and intriguing offer:
1) five year phase out of Supply Management. Unconditional.
2) seven to ten year phase out of protectionism on banks, telcos, and airlines. Details to be discussed in that timeline.
3) I don’t know enough about softwood lumber to comment, but I would offer some sort of mitigation here if possible.
Finally, I would offer to make these things happen if the Americans respect the integrated North American automotive industry and exempts us from tariffs on goods and services in a matter commensurate with NAFTA and CUSMA.
If the Americans balk at that, no deal until they accept what we have offered.
I hope that answers your question, or at least shines some light on an alternate approach.
Please note; these are not concessions, because the elimination of the barriers to trade actually help us prosper as a well .
Your last sentence is particularly important. Canadian tariffs on imports into Canada hurt Canadians because they raise retail prices of those goods, so we either pay more for them or do without them, substituting what to us are inferior domestic goods. (Why do I say goods produced by patriotic hard-working Canadian salt-of-the-earth types are inferior? Because we wouldn't buy them were there no tariffs on the imported goods we would rather buy. That's all.)
Canadian industry that imports raw materials or component parts rom the US will also pay more for its inputs, which will increase its costs and incentivize it to lay off workers, or re-locate production to the US.
Because import duties are a tax, they also funnel more of our money to the government leaving us less to spend on things that produce more utility to us.
The more we tariff, the poorer we get. The smart strategy is to just ignore the American tariffs and let Canadians buy American goods without tariffs. If the Americans are determined to make us poor, we shouldn't help them by making our imported *and domestic* goods more expensive. (Why do tariffs make domestic goods more expensive? Because producers of tariff-protected domestic goods extract economic rents: they charge more or put less quality into what they make.)
Donald, I accept your concept that Canada's best strategy is to convince the US that a "... special deal is in both our best interests ..." My problem is that we seem to have / used to have / whatever such a special deal, called USMCA. DJT proclaimed that deal as "his" deal when it was signed but he now disclaims it. My point is that DJT has changed the definition of both "special deal" and "both our best interests." In particular, DJT simply denies that any deal can conceivably be a win-win because he believes only in a win-lose relationship.
That being so, I respectfully query how his "perspective" would fit within your comment?
A reasonable quibble, but I think my use of recommend versus demands allows for some variation in game theory's application to international affairs. Also, I notice when explaining game theory to friends or colleagues their eyes glaze over around the point the Nash Equilibrium is introduced, which is when I give up and tell them to just watch the movie ;)
"Viewed from abroad, the judicial branch of the U.S. government no longer appears to be a check on, or balance against, the powers of the executive branch."
Viewed by anyone paying objective attention, this is utter nonsense. To wit, the Supreme Court has struck down the use of national guard troops in Chicago, the birthright citizenship limitations, the effort to fire Lisa Cook from the Federal Reserve, and yes, even the vast majority of "Liberation Day" tariffs.
Further, while the Court has ruled in favor the Trump administration in other cases, some of those were things on emergency injunction where only temporary relief was granted until the full case could be heard.
The only way you can arrive at the conclusion Dr. Fellows makes is by assuming a certain narrative, and then either ignoring the actual cases entirely or cherry picking a limited number of cases and not looking at the entire body of work. Mind, there's been a lot of that sort of analysis on the US side of the border, too. But I thought my graduate alma mater had higher standards.
With respect, this objection substitutes a handful of Trump losses for an honest assessment of the Court’s overall record. No serious critic claims that the Supreme Court rules for Trump in every case. The claim is that, on the questions that matter most, such as presidential immunity, control of the federal government, access to emergency relief, and the availability of effective judicial remedies the Court has repeatedly altered the law in unprecedented ways that favor Trump and expand his power.
The most glaring example is Trump v. United States. The Court created absolute immunity for exercises of a president’s exclusive constitutional powers and presumptive immunity for other official acts, while restricting the evidence prosecutors may use. These protections are not expressly stated anywhere in the Constitution. They were created out of thin air for the first time when Donald Trump faced prosecution.
The Trump administration has overwhelming prevailed in decided emergency applications, frequently after losing before lower-court judges. The Supreme Court issued many of those rulings without full briefing, oral argument, or any meaningful explanation, yet they allowed the administration to fire officials and employees, cancel grants, dismantle much of the Department of Education, withdraw immigration protections, and implement other legally disputed policies. Calling that relief “temporary” is a semantic dodge. A person deported, an agency disabled, a grant terminated, or an employee fired does not magically return to the status quo years later when the litigation finally ends. In many of these cases, the supposedly temporary ruling effectively determined the practical outcome.
And the examples you cite prove far less than you suggest. The Cook decision protected the Federal Reserve by declaring it historically unique while the Court stripped comparable protections from many other independent agencies. The Court’s initial birthright-citizenship decision raised an issue that was an entirely settled rule of constitutional law, one which both the text of the 14th Amendment makes clear as does the contemporaneous accounts of its drafters. There was never any question among serious lawyers, judges, or scholars about how it should be decided, and yet 3 justices went along with a radical and ahistorical theory just to please Trump.
The tariff decisions demonstrate that even this Court has some limits, particularly where the administration runs directly into statutory language. But even then, they illustrate its radical deference to Trump. In any other situation, the well reasoned orders of lower courts would have been left in place until the Supreme Court could hear the case in regular order. Instead, the Supreme Court let Trump charge tariffs for months only to realize after the damage was done that the lower court was right all along.
It might be admirable even if not wise, to punch bullies. In my experience bullies do not respect someone who takes on what they can't come near to finishing. One might ask if, in Canada's case, we are doing ourselves more harm than good, and are we even contenders in this trade war of which we are fanning the flames? Has anyone asked the question "what will lead to prosperity and building a country less vulnerable:? That's what Carney says he wants to do, but since he can't figure out what the situation is currently, we can't trust him to figure out long term development either.
Another warning sign is the lack of transparency the Carney Liberals show all the time. There is no list of what the new trade agreements obtained. He did not come clean on the bridge. Voters have no idea what the US offered that Carney did not take. I could go on.
There is a lot of murkiness around what transpired in the failed negotiations, but both sides seem to more or less agree that the U.S. was insisting on some kind of veto over Canada's trade negotiations with other countries elsewhere.
As Lois said, CUSMA already has restrictions on entering into free trade agreements with "non-market" entities (i.e. China, Russia, Iran etc) and that likely was the case here as well. While not explicitly stated by the US, in this particular trade negotiation there is little doubt that China is a major issue. China has infiltrated Mexico and Canada and has a history of dumping steel, aluminum, auto parts, building materials (i.e. drywall/plywood) and now EVs at below cost. It's the same old cycle. We allow immigration from mainland China, some ascend to top positions in our research universities and businesses, steal the IP and send it back to the mainland. China then pours massive capital into manufacturing and supply chains for these industries and dumps the products into the West at below cost to diminish our domestic market share. The USA knows this and it knows that Canada isn't the end target for Chinese espionage. It is the backdoor access to the USA via trade deals with Canada and Mexico that is so salient to the CCP. The USA isn't going to outright state this as an irritant explicitly because at the moment they have relative trade peace with China and don't need to kick the hornet's nest. I think they view the Liberal gov't and specifically Carney to be a national security issue due to both of their longstanding ties with the CCP and utter unwillingness to take even the smallest of measures to reduce CCP influence within our borders.
The fear of a trade deal with Canada being used to dump resources into the American market is entirely speculative or imagined, rather than based on tangible evidence. The problems with the U.S. insisting on a veto on Canada's trade relations are not so speculative and imagined.
I'll make it "tangible" for you Stefan. Feel free to peruse the CBSA official website (run by the Government of Canada) for further instances. Or simply keep your head in the sand, it's much cooler down there.
CUSMA included protocols that discouraged trade deals with non market nations. Carney did a deal with China anyway. And it’s Carney’s idea that the US wanted to curtail - but in the context of the China deal. Whatever is he talking about? Why don’t voters have that info?
That would not be a show stopper if it only applied to non-market economies like China.
If the US were open to allowing all goods to trade tariff free with Canada, it would be realistic to expect both countries to have the same tariffs and trade policies applying to countries outside the trading block. I doubt this was on the table.
I wish I was seeing more humility from both sides of the "we should impose counter tariffs" debate. Trump is an unpredictable menace. Might counter tariffs "work" in the sense of getting him to "back down"? Sure, but they might also fail and make things dramatically worse for us. Nobody knows, which is the point here.
The only *certainty* is that us imposing tariffs *will* make things worse for us financially. So, given that and the impossibility of knowing whether counter tariffs will actually "work", it seems to me that the most prudent course of action is to ride this out, at least for a while, without us imposing more tariffs. As G&G have rightly (I think) pointed out, the USA populace does not have a great appetite for Trump's tariffs so that may cause him to come to his senses without us taking further actions to harm ourselves. And there is sufficient ambiguity surrounding the break down of the talks that both sides can return to the table while saving face by saying (as we are already seeing), "oh, we misunderstood what they meant about the discoverability/[insert other issue] - that changes things so let's get talking again".
Also, for the "we must retaliate" crowd, they seem to be overlooking the fact that the mere act of walking away from a deal is *in and of itself* a demonstration of backbone (we should stipulate that we have no idea whether walking away was the right decision given the lack of information about exactly what was in the deal but let's accept that it was for discussion purposes).
I fear that retaliatory tariffs are a slippery slope to reasserting Laurentian Capitalism, which would be a massive regression. Too much of the Canadian economy is already constrained by protected oligopolies.
What Mr. Fellows shares is a rather famous passage from Adam Smith’s greatest book.
I suggest, with respect and without malice, he is applying it incorrectly.
Canada is a small trading Nation that seldom can affect the terms of trade. We are price takers, for the most part.
The United States is a large trading Nation, whose actions can affect the terms of trade; they can be price influencers.
Retaliation is very harmful, especially to the small trading Nation, and that cannot be disputed.
Retaliation often leads to spiteful escalation, which, in turn, becomes even more harmful. I believe we are witnessing this in real time, in our current trade dispute.
This is, of course, why most classically trained economists despise tariffs and non-tariff barriers to trade.
Once tariffs get into the hands of Smith’s “…insidious and crafty animal vulgarly called a statesman or politician…..”, there is actually no end to the damage and carnage he can deliver.
Are you suggesting that Canada should be a doormat and not respond at all, hoping it goes away? What would make you think this will ever go away? I think this is existential now. Are we Austria in 1938?
Maybe, but you need to show how the counter-tariffs or any other retaliation Canada would have the capacity to reply with, which you seem to favour, could possibly hurt the US enough to change Trump's mind, Remember, any pain that Trump's own tariffs are inflicting on Americans through higher retail prices of imported goods he can now deflect the blame to Canada's incredibly nasty and hostile counter-tariffs. Other countries don't seem to have a problem with my tariffs, he says. What's up with Canada that it is being difficult? It has a good deal ripping us off that it doesn't want to give up, eh?
One reason the Anschluss happened in 1938 was exactly that Austria was unable or unwilling to resist Hitler's demand to annex the country and bring about a much larger pan-German state. Austria's leaders were clearly afraid of Hitler and what he would do if they didn't acquiesce. Maybe we are in the same situation. The (Sorry: "inter-")national order is like that sometimes. He doesn't need to annex us because he doesn't need us to be American citizens, the way Hitler wanted Austrians to become German citizens. If all he wants is to dictate trade terms to us, he can just vassalize us through economic intimidation. If we can't fight that intimidation with economic means, what are you suggesting, that we go to war, a real shooting war, against the US? Make rockets in Windsor basements and launch them over the river at Detroit?
I interpret your reply as you suggesting that we should just ignore it and hope it goes away...that some other shiny object will distract him. Maybe the recession his war will cause. We'll agree to disagree. There is not a single rational person on the planet who still believes him when he speaks, and I could not care less what he says anymore. It's just the noise of an idiot. We'll find out in 7 weeks if Americans are smart enough to address the problem internally. In the meantime, I hope Canada's Premiers wake up and smell the coffee and address....today, the issues of economic paralysis in the country that they are responsible for.
Armed no. Economic? Already happening. There are thousands of years of history that show that caving to a bully just gets you bullied more. We didn't start this. "Peace on our time" didn't last very long.
And since you've kept Pierre, you should best plan on it being 18 years before you might get a voice in government.
Canadians are the proverbial “slow boiled frog in a pot”. In the name of “peace, order, good government and security of the person” we have lost sight of what precedes this aspirational goal. Having economic sovereignty provides for the social and cultural sovereignty Canadians desire. Serious sacrifices were made long ago by those who understood the truth of “walk quietly and carry a big stick”. We have been led by politicians who lost our big stick and have mistaken hectoring and “clever” rhetoric for leadership.
"Retaliation has one goal and only one goal: to make the other guy re-think his actions."
All evidence shows that he is more likely to escalate than "re-think" anything. He would have needed to "think" in the first place. The "bloody nose" we are giving him is just the splash back from punching ourselves in the face. Sometimes "we have to do something" is objectively worse than doing nothing. His own actions are creating more consequences for Americans than any of our retaliations could even hope to achieve.
Trade retaliation feels good and playw well to the Boomers and public sector employees insulated from the consequences. It will not influence the outcome of the trade war as the Canadian economy needs the US market far more so than than the US economy needs Canada.
I've said in previous posts that the path forward is to demonstrate actual alternatives that go beyond speeches and agreements. It means embracing Canada as a Pacific nation and literally moving mountains to deliver energy, critical minerals, potash, agriculture and uranium to countries like Japan, Korea and India. It will require immense political capital to push through whatever it takes to build world leading export infrastructure on an expedient timeline.
I can honestly say, for the first time, that this post is complete drivel . Quoting trade policy from. 250 years ago as if markets and trade has not changed.
To be blunt, EVERY G7 nation faces punitive tariffs imposed by the Trump administration. Every other G7 nation dealt with the administration and has a trade deal. Not Canada. Why, because it politically inconvenient to get a trade deal. Is it economics, an interesting question. This is the second time the Carney administration has failed to get an agreement. This is the very item Carney campaigned on. On his being the person who can get a trade deal with the US. Might it have to do with Carney wanting his "new world order" even if it hurts Canadians? Perhaps if people stepped back and look at the past 6 years since Carney stepped into Canadian political life. His actions have been very clear, hamper the Canadian economy (doubling the debt, out of control spending, policies that further hamper Canadians) and take away Canadian's rights and freedoms (bills C-2, -8, -9, amongst others).
He is also getting into bed with a regime which has terrible human rights records.
Looking at this from a simple trade view, yes, Trump wants to bring back manufacturing and, hence, jobs to the US economy. If we were to look at past agreements with the US, has Canada benefitted more than the US and gas there been a political reason for this being allowed. Perhaps.
But, as can be seen most recently, Canada has lost 42,000 jobs, BEFORE the tariffs took affect. Recently Sapporo stated it would be leaving, how many more jobs will be lost?
Perhaps the author has lost sight of who the true bully is. This plays well to the "elbows up" crowd however, Canadians who have to rely on food banks, who are not able to afford housing and now, more then ever, concerned about holding a job, let alone finding a new will and should question a PM who is not in parliament even though we are facing a crisis.
Because Canada faces a danger the other countries (aside from Mexico and Greenland) do not face. They don't face vassalization. And no, it's not "statehood", it's vassalization. The Americans don't want to buy the cow... they want the milk for free.
Do you want Canada's foreign policy, trade police and economic policy set by the USA for the benefit of the USA and to Canada's detriment? Because that was the demand.
Europe is getting abandoned by the USA despite the agreements the USA has made. That's bad for them, but it's a different problem requiring different solutions. We don't face that problem. The US is unhappy with our level of defence spending, but there is absolutely ZERO chance they'd tolerate an invasion of Canada by Russia or China and just say "oh that's fine". There's a real danger they'd just tolerate a Russian invasion of Europe. Not a massive one (yet) but real.
Lol “vassalisation”. Right. You have no idea what the demand was because no one will say. Trump is lying, Carney is lying. For all you know, and I think this is most likely, the policy had to do with China. Further, as you’ve hopefully read every trade deal sets limits on both parties trade policy… that’s the point.
The US threats are real, and it is no stretch to assess that Trump's goals are zero-sum. Which means that he means to reduce Canada's capacity to resist US pressure on most any issue.
That is, by definition, a dynamic that would lead to the diminution of our sovereignty.
My favorite part: “In some respects, those arguing against retaliation are correct. Putting tariffs on American imports to Canada will hurt the Canadian economy. We will all be poorer for it. Incomes will fall, jobs will be lost and prices will rise. That’s not an opinion, it’s an analysis informed by 250 years of academic research on free trade.” And then he goes onto completely ignore this because of his political analysis, just what you want an economist for.
I love being sandwiched between a hostile US and a hostile government at home. The way I see it they both want to impoverish me, ruin my country's economy for irrational reasons, and won't leave me the fuck alone to live my life.
We're living in a kakistocracy layer cake. It's shit all the way up and all the way down. Throw all the leaders in a volcano and the world would be a better place.
Surely the "insidious and crafty animal vulgarly called a statesman or politician" is a better description of Trump, Bessant and Lutnick?
In any case, the Trump administration has clearly signalled that it is willing to go in for full-on destruction in order to achieve the nutter's goals, which are NOT economic, but political and personal in nature.
What I do not understand are the so-called Canadian conservatives who seem to believe that it is Canada, and not Trump, who is at fault here.
Even if retaliation doesn't cause the US to change their behaviour, the best move is STILL to impose counter-tariffs. Letting our manufacturing sector melt away is a sure path to poverty and subjugation. Yes, there are economic costs to retaliation, but there is no no-cost option here. The cost of NOT retaliating is huge.
Trump is unravelling 40 years of integration, and Canada needs to decide if its going to be a sovereign nation with its own capacity to make stuff and control its own destiny, or not.
Just after Carney negotiated – caved - lied-about the deal to open the Gordie Howe Bridge I happened to be at lunch with two economists. I offered the opinion that Carney had offered up a series of concessions without receiving anything in return, and that maybe he should have just walked away from offering yet another. After all, we have been using the Ambassador Bridge, and it was still there.
The reaction was immediate. Both jumped on the idea as ridiculous and tested each other on repeating from memory a quote from Keynes that supported their claim. During the lunch I was informed that I didn’t know much, if anything about decision “theory”. At one point, one of the economists cut me off stating that we were discussing negotiation “theory” of which I didn't know anything about, but the economist talking certainly did.
I thought it odd that both were aware that I had held executive positions during my work life, but they never asked what “experience” I may have that would be relevant. I would have said that I was my firm’s sole lead on a 10-figure/year negotiation. Not in the league of what the PM is doing but not haggling over the price of a used car either.
They love Carney as he is an economist and did his PhD in decision theory. So, “he knows”. It’s nice to see that Mr. Fellows rises above that sort of one upmanship. However, he seems to still need to ground his argument in the thinking of The Great Man.
From the perspective of how public policy is conducted, I would suggest that we all pause and reflect on the approach of Mexico to these negotiations. I’m not aware that Governors of various states are childishly trying to score political points by insulting the famously thin skinned Trump (hello Wab, Doug and Dave). Maybe consider how stoic Finland would conduct itself with its history of negotiating and successfully conducting a real war with an overpowering neighbour.
We might even consider that the Federal government is engaging in emotional manipulation for its own internal political purposes and that choosing to inflame emotions by calling it a "Trade War" instead of a "trade dispute" was not an accident. However, that would require putting aside the intellectual filter that comes from relying on The Great Man as the source of legitimacy for one's position and simply looking at what is clearly before us.
"Retaliation has one goal and only one goal: to make the other guy re-think his actions."
The person who should be rethinking his actions is Carney. He ignored Trump, intentionally deceived Canadians about his 'meetings with Trump' all the while pretending to be honest while lying.
Carney ran a campaign on Elbows Up and Team Canada where he used false arguments that seemed completely plausible and deceptive language to hide his lies. Carney has manipulated the media in his favour. The bought and paid for media has colluded with his chicanery to manipulate the citizens of Canada.
Carney is not here for Canada. If he was he would have been in Washington as soon as he was elected working with Trump, not snidely condemning the man. Is Trump crazy, no doubt. Is Carney a coward and liar - no doubt.
Trump is a senile criminal lunatic. It is not feasible to make an agreement with him because he will break it the first chance he gets.
It is also not useful to lick his feet, because he kicks bootlickers too. So let's save ourselves the humiliation of surrendering like cowards and have the guts to tell him no. Carney has the guts.
While probably not an exhaustive list, Carney has caved on the following U.S. pressure:
Digital Services Tax (DST), Nato Defence Goals, Border and Security Plans, Defense Commitments, Tariff Adjustments, and we still don’t know what he gave the US to open the Gordie Howe bridge.
He told us that the US proposals were unfair but did not have the decency to tell us what they asked for.
Carney described the breakdown of trade negotiations as “uneconomic” and “unfair” demands. There is a giant bit of obfuscation.
People much smarter than me fear that Carney has complied too easily with Trump's demands, which will only cause Trump to carry on with his usual bullying tactics. They are concerned that Carney might ‘surrender other key priorities, such as environmental standards, cultural industries, and Arctic sovereignty.’
As you say, Trump kicks bootlickers too. That certainly defines Carney.
All you need to know is that when faced with the choice between doing what is best for Canadians and what is best for their own electoral fortunes, the Liberal Party will always pick the latter. I challenge anyone to find an example otherwise, and particularly in the party's current incarnation where the pursuit of power appears to be their only goal.
I thought this was a negotiating tactic, but it's clear they saw polling that concessions and a deal we could all live with would make the party less popular than throwing it all out and going full Elbows Up supported to an infinite degree by their cheering media insisting we are at "war".
They appear willing to burn your entire livelihood and the purchasing power of the money you sell your finite life in painful struggle to obtain, to keep a bunch of lobotomized retirees in a perpetual anti-American froth thinking Mark Carney is their defending hero. Until the polls tell them otherwise, and that could take a long, long time.
Article on economic theory? Response: the LPC are evil mean people who want to poison your puppy!!! Article on best bbq recipes? See previous response.
Nothing KRM said is out of line.
The Liberal Party of Canada has pitted Canadian against Canadian for decades. Now it has taken aim on the Americans. We are to ignore our better virtues, and put our faith in a Party that has led to the decay, decimation, destruction, diminishment, and decline of our once-wonderful Country.
I'm not commenting on his party preference, although the belief that disagreement = "lobotomized" is tiresome. I'm commenting on predictability.
Thank you, but I decline to align with the LPC.
Ever.
Moi, aussi.
...the country that for most of its history was governed by said party?
Damn. For a bunch who are running the place into the ground they sure did a bad job at managing it for well over a century.
Liberal voters wete so sure that Justin Trudeau was the way to go for an entire decade, defended him up and down while he systematically ruined everything he touched, and now nobody wants to even speak his name. There's a lesson in there somewhere.
Are we relying on another group of idiots not to blow up our lives to get a polling bump?
It’s 500 words without an actual reference to economics. It’s an economists perspective on what the US Supreme Court will do. Well… there is this line: “In some respects, those arguing against retaliation are correct. Putting tariffs on American imports to Canada will hurt the Canadian economy. We will all be poorer for it. Incomes will fall, jobs will be lost and prices will rise.
That’s not an opinion, it’s an analysis informed by 250 years of academic research on free trade.”
Did you forget about Pierre Poilievre's own August 9th open letter demanding that the Carney government commit to "no more caving" to the Trump administration? Poilievre would have been first in line to smack-talk the government for being too compromising with the bad-faith Trump regime.
And Pierre was right. "Caving" isn't negotiating. It's capitulation without receiving anything in return. Carney caved on several issues without anything to show for it. Pierre's point was to incorporate those issues into a broader trade deal so we could extract something of value for them. BTW, nobody mentioned Pierre. If you haven't noticed the Conservative party are not in government.
Negotiating means the exercise of bargaining leverage to achieve a desirable outcome. Being willing to walk away is part of how you exercise bargaining leverage - yet KRM seems critical of that choice to walk away.
I was the first to mention Poilievre, but KRM was the first to bring partisanship into a non-partisan subject, so my citation of Poilievre's stance was a response to that.
Actually, Stefan, I read that demand as being along the lines of "no more Gordie Howe bridge sorts of deals."
Gordie Howe-style deals can only be prevented by being prepared to walk away from a bad deal when the other negotiating partner is insistent on pushing for one. Therefore, KRM's criticism of the Carney government for back-pedalling on the negotiations is still unfounded.
MC had an honorable way to deal with the Gordie Howe bridge situation: simply decline to revise the previous agreement and leave the bridge unopened for however many years were required. The fact that MC rolled over for DJT and then lied about it means that he cannot negotiate, despite what he told voters during the election campaign.
And that might have been bad for Liberal polling. And now it isn't.
A deal that's seen as too compromising is really Carney's only bad political outcome here. Of course the opposition will try to paint any deal as a bad one. No-Deal-Trade-War on the other hand pretty much means there is no opposition.
It would have been bad for Liberal polling with a little help from Poilievre.
I've been voting since the early 80s. Doing what's best for Canadians and doing what's best for their own electoral fortunes is absolutely 1000000% not the exclusive domain of the Liberal party. Conservatives did the same thing when they were in power. Both parties ran Canada via the PMO. Trudeau 1.0 started government run by the PMO.
Not defending the liberal party, btw. But in politics all politicians lie and it's always about getting elected.
Politics tends to select for ruthlessness to some degree, to be sure, but there are few examples where "follow the polls and do whatever it takes" is taken as far as the Liberals do. Conservatives, Bloc, NDP, and even Democrats and Republicans are constrained by ideology and principles (whether you agree or disagree with them) and are willing to white knuckle through a polling hit hoping their 'superior ideals' will be vindicated in the long run. Liberals, I would argue, are not. Doug Ford's PC's have successfully imitated this model to some degree.
You're here with a straight face telling us Justin Trudeau wasn't willing to white-knuckle through a polling hit for his ideals?
That's what got him removed. He sniffed his own farts for too long and put ego over party. I'm his case he chose what was actually worse for the country than just following the polls though. Quite a uniquely bad PM.
The old PCs didnt. They brought in the GST knowing it was electoral suicide but it had to be done. That is quite rare though.
We will never again have a
Prime Minister with Brian Mulroney’s courage, vision, and willingness to expend political capital to improve his Country.
Liked him until he stacked the Senate for the GST. and sent CF-18 maintenance from from Winnipeg to Quebec. I remember his primary polcies that were deeply unpopular at the time and for me, that's why he had the sense to get out when he did. The reform party was the result of his government's approach. I did stand at attention in three ranks in the snow waiting for his arrival at the Miltary Museum in Calgary back in 1990 and he was on time so that was pleasant. Also, a damned fine singer.
Anyone who. endured watching some of the CBC coverage of the US trade retailiations had the opportunity to watch an interview with a Quebec dairy farmer. It was instructive and utterly dispiriting. An entirely privileged individual eager to counsel more Canadian retaliation while enjoying virtually an guaranteed income , all at the expense of the Canadian consumer.
For Carney to not end Canadian protectionism in dairy to avoid what occurred last night should have been a no brainer.
No better are the buffoon Premier so keen to preserve liquor bans of Kentucky bourbon and California Pinot must confront the devastation of Canadian liquor production that is only viable if the US market is preserved.
Ultimately this is a test of Canadian realism and its capacity to actually measure whether there is no to gain from greater economic integration versus the costs of a preserving some fatuous "freedom to act" at odds with economic and geographic reality..
Carney will only provoke more costs on Canada by further retailiation. Surely, he knows this.
One totally robust and constructive action he could take is to tell those Canadian Premiers extolling further retaliation to simply shut up.
These US trade issues transcend Trump. Carney knows that too.
"Carney will only provoke more costs on Canada by further retaliation.
Surely, he knows this"
Calgary mayor last night
https://x.com/JeromyYYC/status/2097686704186405119
$ 500 M added to the taxes to be paid by homeowners. Cgy is about 25 % of the AB population so about $ 2 B added to the tax bills in AB .
All levels of government spend too much.
Carney constraining Alberta hydrocarbon exports to the US will only add to that cost.
And for what? To salvage the uncompetitive and protected?
So now mayors are using Trump and tariffs as their new excuse for not controlling spending and to raise taxes? What a great time to be in government at every level in Canada. Blame Trump, tariffs and avoid any accountability for anything. 👍
Correct - Very convenient excuse for Farkas to up your taxes
The costs he refers to as Trump tariffs are actually Carney tariffs.
How is this not a huge story everywhere ? Cgy is 1.5 M pop but Ont and Que are 25 M How much will their bill be on USA procurement ?
...not clear on why we should end protectionism in our dairy for the sake of the heavily-subsidized US dairy industry.
Great post.
In international affairs, game theory recommends tit-for-tat, or "dollar-for-dollar", or fighting fire with fire, but it presupposes a rational actor pursing a clear national interest. What if Trump doesn't care about the American people, or the Republican Party, or based on recent posts, even understand the concept of money? What if retaliation - using tariffs - only acts as reinforcement learning for Trump? Maybe with someone like Trump, we should try fighting fire with water. We should be "threatening" Trump by lowering tariffs and non-tariff barriers on China and the EU. When he threatens to increase taxes on Americans we should threaten to lower taxes on Canadians.
One small quibble: game theory is about choosing your best strategy, keeping in mind that the opponent or opponents also have a strategic choice set.
So, I would respectfully disagree with the notion that game theory demands “tit-for-tat” retaliation.
A Nash Equilibrium is achieved when no player can improve his own outcome, given the fixed decisions of any other opponent.
Canada’s best choice, in my opinion, is to reject the notion of tariff escalation, and to convince the Americans that a special deal is in both of our best interests. We try to improve our lot by tariffing, and then tariffing again, and again, we end up far worse off than we would have been if we had just “accepted” the tariffs in the first place.
"Canada’s best choice, in my opinion, is to reject the notion of tariff escalation, and to convince the Americans that a special deal is in both of our best interests."
I'm wondering how you differentiate this approach from Canada's actions to date, prior to the breakdown of talks in mid August?
Okay, I will give it a try.
We have to first make assumptions about the goals of the players.
Let’s assume the Prime Minister wants the best access to the U.S. market with the least damage, cost, or transaction levies.
Let’s assume that the Trump Administration is committed to 1) charging for access to the U.S. market, and 2) reducing the size of the trade “imbalance” between the two Countries.
So, given those assumptions, what is the best response of each, also assuming that one player knows the incentives and goals of the other?
I think the Prime Minister adopted a strategy of waiting out the Trumpists. Strategic patience I think he called it. It was not a good decision given that Trump can influence the terms of trade, and the timeline. Mr. Carney’s plan was vitiated by Mr. Trump’s deadline of August 19th. So, clearly, that was not Canada’s first best option.
Assuming Mr. Trump wants a deal that “benefits” America, Canada would have been better off, in my opinion, to have offered the Americans a chance to investigate an unexpected and intriguing offer:
1) five year phase out of Supply Management. Unconditional.
2) seven to ten year phase out of protectionism on banks, telcos, and airlines. Details to be discussed in that timeline.
3) I don’t know enough about softwood lumber to comment, but I would offer some sort of mitigation here if possible.
Finally, I would offer to make these things happen if the Americans respect the integrated North American automotive industry and exempts us from tariffs on goods and services in a matter commensurate with NAFTA and CUSMA.
If the Americans balk at that, no deal until they accept what we have offered.
I hope that answers your question, or at least shines some light on an alternate approach.
Please note; these are not concessions, because the elimination of the barriers to trade actually help us prosper as a well .
Your last sentence is particularly important. Canadian tariffs on imports into Canada hurt Canadians because they raise retail prices of those goods, so we either pay more for them or do without them, substituting what to us are inferior domestic goods. (Why do I say goods produced by patriotic hard-working Canadian salt-of-the-earth types are inferior? Because we wouldn't buy them were there no tariffs on the imported goods we would rather buy. That's all.)
Canadian industry that imports raw materials or component parts rom the US will also pay more for its inputs, which will increase its costs and incentivize it to lay off workers, or re-locate production to the US.
Because import duties are a tax, they also funnel more of our money to the government leaving us less to spend on things that produce more utility to us.
The more we tariff, the poorer we get. The smart strategy is to just ignore the American tariffs and let Canadians buy American goods without tariffs. If the Americans are determined to make us poor, we shouldn't help them by making our imported *and domestic* goods more expensive. (Why do tariffs make domestic goods more expensive? Because producers of tariff-protected domestic goods extract economic rents: they charge more or put less quality into what they make.)
Donald, I accept your concept that Canada's best strategy is to convince the US that a "... special deal is in both our best interests ..." My problem is that we seem to have / used to have / whatever such a special deal, called USMCA. DJT proclaimed that deal as "his" deal when it was signed but he now disclaims it. My point is that DJT has changed the definition of both "special deal" and "both our best interests." In particular, DJT simply denies that any deal can conceivably be a win-win because he believes only in a win-lose relationship.
That being so, I respectfully query how his "perspective" would fit within your comment?
I wasn’t saying you were wrong, exactly.
I had a small quibble and that is all. Actually, I just wanted to see if I could still present this stuff!
Great chat, friend.
A reasonable quibble, but I think my use of recommend versus demands allows for some variation in game theory's application to international affairs. Also, I notice when explaining game theory to friends or colleagues their eyes glaze over around the point the Nash Equilibrium is introduced, which is when I give up and tell them to just watch the movie ;)
I take umbrage with this line:
"Viewed from abroad, the judicial branch of the U.S. government no longer appears to be a check on, or balance against, the powers of the executive branch."
Viewed by anyone paying objective attention, this is utter nonsense. To wit, the Supreme Court has struck down the use of national guard troops in Chicago, the birthright citizenship limitations, the effort to fire Lisa Cook from the Federal Reserve, and yes, even the vast majority of "Liberation Day" tariffs.
Further, while the Court has ruled in favor the Trump administration in other cases, some of those were things on emergency injunction where only temporary relief was granted until the full case could be heard.
The only way you can arrive at the conclusion Dr. Fellows makes is by assuming a certain narrative, and then either ignoring the actual cases entirely or cherry picking a limited number of cases and not looking at the entire body of work. Mind, there's been a lot of that sort of analysis on the US side of the border, too. But I thought my graduate alma mater had higher standards.
With respect, this objection substitutes a handful of Trump losses for an honest assessment of the Court’s overall record. No serious critic claims that the Supreme Court rules for Trump in every case. The claim is that, on the questions that matter most, such as presidential immunity, control of the federal government, access to emergency relief, and the availability of effective judicial remedies the Court has repeatedly altered the law in unprecedented ways that favor Trump and expand his power.
The most glaring example is Trump v. United States. The Court created absolute immunity for exercises of a president’s exclusive constitutional powers and presumptive immunity for other official acts, while restricting the evidence prosecutors may use. These protections are not expressly stated anywhere in the Constitution. They were created out of thin air for the first time when Donald Trump faced prosecution.
The Trump administration has overwhelming prevailed in decided emergency applications, frequently after losing before lower-court judges. The Supreme Court issued many of those rulings without full briefing, oral argument, or any meaningful explanation, yet they allowed the administration to fire officials and employees, cancel grants, dismantle much of the Department of Education, withdraw immigration protections, and implement other legally disputed policies. Calling that relief “temporary” is a semantic dodge. A person deported, an agency disabled, a grant terminated, or an employee fired does not magically return to the status quo years later when the litigation finally ends. In many of these cases, the supposedly temporary ruling effectively determined the practical outcome.
And the examples you cite prove far less than you suggest. The Cook decision protected the Federal Reserve by declaring it historically unique while the Court stripped comparable protections from many other independent agencies. The Court’s initial birthright-citizenship decision raised an issue that was an entirely settled rule of constitutional law, one which both the text of the 14th Amendment makes clear as does the contemporaneous accounts of its drafters. There was never any question among serious lawyers, judges, or scholars about how it should be decided, and yet 3 justices went along with a radical and ahistorical theory just to please Trump.
The tariff decisions demonstrate that even this Court has some limits, particularly where the administration runs directly into statutory language. But even then, they illustrate its radical deference to Trump. In any other situation, the well reasoned orders of lower courts would have been left in place until the Supreme Court could hear the case in regular order. Instead, the Supreme Court let Trump charge tariffs for months only to realize after the damage was done that the lower court was right all along.
It might be admirable even if not wise, to punch bullies. In my experience bullies do not respect someone who takes on what they can't come near to finishing. One might ask if, in Canada's case, we are doing ourselves more harm than good, and are we even contenders in this trade war of which we are fanning the flames? Has anyone asked the question "what will lead to prosperity and building a country less vulnerable:? That's what Carney says he wants to do, but since he can't figure out what the situation is currently, we can't trust him to figure out long term development either.
Another warning sign is the lack of transparency the Carney Liberals show all the time. There is no list of what the new trade agreements obtained. He did not come clean on the bridge. Voters have no idea what the US offered that Carney did not take. I could go on.
There is a lot of murkiness around what transpired in the failed negotiations, but both sides seem to more or less agree that the U.S. was insisting on some kind of veto over Canada's trade negotiations with other countries elsewhere.
As Lois said, CUSMA already has restrictions on entering into free trade agreements with "non-market" entities (i.e. China, Russia, Iran etc) and that likely was the case here as well. While not explicitly stated by the US, in this particular trade negotiation there is little doubt that China is a major issue. China has infiltrated Mexico and Canada and has a history of dumping steel, aluminum, auto parts, building materials (i.e. drywall/plywood) and now EVs at below cost. It's the same old cycle. We allow immigration from mainland China, some ascend to top positions in our research universities and businesses, steal the IP and send it back to the mainland. China then pours massive capital into manufacturing and supply chains for these industries and dumps the products into the West at below cost to diminish our domestic market share. The USA knows this and it knows that Canada isn't the end target for Chinese espionage. It is the backdoor access to the USA via trade deals with Canada and Mexico that is so salient to the CCP. The USA isn't going to outright state this as an irritant explicitly because at the moment they have relative trade peace with China and don't need to kick the hornet's nest. I think they view the Liberal gov't and specifically Carney to be a national security issue due to both of their longstanding ties with the CCP and utter unwillingness to take even the smallest of measures to reduce CCP influence within our borders.
The fear of a trade deal with Canada being used to dump resources into the American market is entirely speculative or imagined, rather than based on tangible evidence. The problems with the U.S. insisting on a veto on Canada's trade relations are not so speculative and imagined.
I'll make it "tangible" for you Stefan. Feel free to peruse the CBSA official website (run by the Government of Canada) for further instances. Or simply keep your head in the sand, it's much cooler down there.
https://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/donp22026/donp22026-in-eng.html
https://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/ad1405/ad1405-i14-fd-eng.html
https://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/wr2024/wr2024-nf-eng.html
https://www.cbsa-asfc.gc.ca/sima-lmsi/mif-mev/rb1-eng.html
https://www.cbsa-asfc.gc.ca/sima-lmsi/i-e/sw2025/sw2025-fd-eng.html
https://www.canada.ca/en/border-services-agency/news/2026/04/the-cbsa-launches-investigations-into-the-alleged-dumping-and-subsidizing-of-steel-racks-from-china.html
CUSMA included protocols that discouraged trade deals with non market nations. Carney did a deal with China anyway. And it’s Carney’s idea that the US wanted to curtail - but in the context of the China deal. Whatever is he talking about? Why don’t voters have that info?
That would not be a show stopper if it only applied to non-market economies like China.
If the US were open to allowing all goods to trade tariff free with Canada, it would be realistic to expect both countries to have the same tariffs and trade policies applying to countries outside the trading block. I doubt this was on the table.
I wish I was seeing more humility from both sides of the "we should impose counter tariffs" debate. Trump is an unpredictable menace. Might counter tariffs "work" in the sense of getting him to "back down"? Sure, but they might also fail and make things dramatically worse for us. Nobody knows, which is the point here.
The only *certainty* is that us imposing tariffs *will* make things worse for us financially. So, given that and the impossibility of knowing whether counter tariffs will actually "work", it seems to me that the most prudent course of action is to ride this out, at least for a while, without us imposing more tariffs. As G&G have rightly (I think) pointed out, the USA populace does not have a great appetite for Trump's tariffs so that may cause him to come to his senses without us taking further actions to harm ourselves. And there is sufficient ambiguity surrounding the break down of the talks that both sides can return to the table while saving face by saying (as we are already seeing), "oh, we misunderstood what they meant about the discoverability/[insert other issue] - that changes things so let's get talking again".
Also, for the "we must retaliate" crowd, they seem to be overlooking the fact that the mere act of walking away from a deal is *in and of itself* a demonstration of backbone (we should stipulate that we have no idea whether walking away was the right decision given the lack of information about exactly what was in the deal but let's accept that it was for discussion purposes).
I fear that retaliatory tariffs are a slippery slope to reasserting Laurentian Capitalism, which would be a massive regression. Too much of the Canadian economy is already constrained by protected oligopolies.
Not retaliating also carries a cost. That’s just letting Donald Trump decide our industrial policy.
What Mr. Fellows shares is a rather famous passage from Adam Smith’s greatest book.
I suggest, with respect and without malice, he is applying it incorrectly.
Canada is a small trading Nation that seldom can affect the terms of trade. We are price takers, for the most part.
The United States is a large trading Nation, whose actions can affect the terms of trade; they can be price influencers.
Retaliation is very harmful, especially to the small trading Nation, and that cannot be disputed.
Retaliation often leads to spiteful escalation, which, in turn, becomes even more harmful. I believe we are witnessing this in real time, in our current trade dispute.
This is, of course, why most classically trained economists despise tariffs and non-tariff barriers to trade.
Once tariffs get into the hands of Smith’s “…insidious and crafty animal vulgarly called a statesman or politician…..”, there is actually no end to the damage and carnage he can deliver.
Are you suggesting that Canada should be a doormat and not respond at all, hoping it goes away? What would make you think this will ever go away? I think this is existential now. Are we Austria in 1938?
Maybe, but you need to show how the counter-tariffs or any other retaliation Canada would have the capacity to reply with, which you seem to favour, could possibly hurt the US enough to change Trump's mind, Remember, any pain that Trump's own tariffs are inflicting on Americans through higher retail prices of imported goods he can now deflect the blame to Canada's incredibly nasty and hostile counter-tariffs. Other countries don't seem to have a problem with my tariffs, he says. What's up with Canada that it is being difficult? It has a good deal ripping us off that it doesn't want to give up, eh?
One reason the Anschluss happened in 1938 was exactly that Austria was unable or unwilling to resist Hitler's demand to annex the country and bring about a much larger pan-German state. Austria's leaders were clearly afraid of Hitler and what he would do if they didn't acquiesce. Maybe we are in the same situation. The (Sorry: "inter-")national order is like that sometimes. He doesn't need to annex us because he doesn't need us to be American citizens, the way Hitler wanted Austrians to become German citizens. If all he wants is to dictate trade terms to us, he can just vassalize us through economic intimidation. If we can't fight that intimidation with economic means, what are you suggesting, that we go to war, a real shooting war, against the US? Make rockets in Windsor basements and launch them over the river at Detroit?
I interpret your reply as you suggesting that we should just ignore it and hope it goes away...that some other shiny object will distract him. Maybe the recession his war will cause. We'll agree to disagree. There is not a single rational person on the planet who still believes him when he speaks, and I could not care less what he says anymore. It's just the noise of an idiot. We'll find out in 7 weeks if Americans are smart enough to address the problem internally. In the meantime, I hope Canada's Premiers wake up and smell the coffee and address....today, the issues of economic paralysis in the country that they are responsible for.
Are you anticipating an armed invasion?
Then the answer is no, we are not Austria 1938.
There is 250 years of economic theory and econometric evidence to support the notion that placing barriers to trade is a bad idea.
Should you choose to avail yourself to that evidence, you would find yourself better off as a result.
What I think, just as in every election, of the last eleven years, is irrelevant.
Armed no. Economic? Already happening. There are thousands of years of history that show that caving to a bully just gets you bullied more. We didn't start this. "Peace on our time" didn't last very long.
And since you've kept Pierre, you should best plan on it being 18 years before you might get a voice in government.
I have no expectation of Canada ever electing a conservative Conservative government.
Canadians are the proverbial “slow boiled frog in a pot”. In the name of “peace, order, good government and security of the person” we have lost sight of what precedes this aspirational goal. Having economic sovereignty provides for the social and cultural sovereignty Canadians desire. Serious sacrifices were made long ago by those who understood the truth of “walk quietly and carry a big stick”. We have been led by politicians who lost our big stick and have mistaken hectoring and “clever” rhetoric for leadership.
"Retaliation has one goal and only one goal: to make the other guy re-think his actions."
All evidence shows that he is more likely to escalate than "re-think" anything. He would have needed to "think" in the first place. The "bloody nose" we are giving him is just the splash back from punching ourselves in the face. Sometimes "we have to do something" is objectively worse than doing nothing. His own actions are creating more consequences for Americans than any of our retaliations could even hope to achieve.
Calgary mayor last night
https://x.com/JeromyYYC/status/2097686704186405119
$ 500 M added to the taxes to be paid by homeowners. Cgy is about 25 % of the AB population so about $ 2 B added to the tax bills in AB .
Trade retaliation feels good and playw well to the Boomers and public sector employees insulated from the consequences. It will not influence the outcome of the trade war as the Canadian economy needs the US market far more so than than the US economy needs Canada.
I've said in previous posts that the path forward is to demonstrate actual alternatives that go beyond speeches and agreements. It means embracing Canada as a Pacific nation and literally moving mountains to deliver energy, critical minerals, potash, agriculture and uranium to countries like Japan, Korea and India. It will require immense political capital to push through whatever it takes to build world leading export infrastructure on an expedient timeline.
I can honestly say, for the first time, that this post is complete drivel . Quoting trade policy from. 250 years ago as if markets and trade has not changed.
To be blunt, EVERY G7 nation faces punitive tariffs imposed by the Trump administration. Every other G7 nation dealt with the administration and has a trade deal. Not Canada. Why, because it politically inconvenient to get a trade deal. Is it economics, an interesting question. This is the second time the Carney administration has failed to get an agreement. This is the very item Carney campaigned on. On his being the person who can get a trade deal with the US. Might it have to do with Carney wanting his "new world order" even if it hurts Canadians? Perhaps if people stepped back and look at the past 6 years since Carney stepped into Canadian political life. His actions have been very clear, hamper the Canadian economy (doubling the debt, out of control spending, policies that further hamper Canadians) and take away Canadian's rights and freedoms (bills C-2, -8, -9, amongst others).
He is also getting into bed with a regime which has terrible human rights records.
Looking at this from a simple trade view, yes, Trump wants to bring back manufacturing and, hence, jobs to the US economy. If we were to look at past agreements with the US, has Canada benefitted more than the US and gas there been a political reason for this being allowed. Perhaps.
But, as can be seen most recently, Canada has lost 42,000 jobs, BEFORE the tariffs took affect. Recently Sapporo stated it would be leaving, how many more jobs will be lost?
Perhaps the author has lost sight of who the true bully is. This plays well to the "elbows up" crowd however, Canadians who have to rely on food banks, who are not able to afford housing and now, more then ever, concerned about holding a job, let alone finding a new will and should question a PM who is not in parliament even though we are facing a crisis.
> Not Canada. Why,
Because Canada faces a danger the other countries (aside from Mexico and Greenland) do not face. They don't face vassalization. And no, it's not "statehood", it's vassalization. The Americans don't want to buy the cow... they want the milk for free.
Do you want Canada's foreign policy, trade police and economic policy set by the USA for the benefit of the USA and to Canada's detriment? Because that was the demand.
Europe is getting abandoned by the USA despite the agreements the USA has made. That's bad for them, but it's a different problem requiring different solutions. We don't face that problem. The US is unhappy with our level of defence spending, but there is absolutely ZERO chance they'd tolerate an invasion of Canada by Russia or China and just say "oh that's fine". There's a real danger they'd just tolerate a Russian invasion of Europe. Not a massive one (yet) but real.
Lol “vassalisation”. Right. You have no idea what the demand was because no one will say. Trump is lying, Carney is lying. For all you know, and I think this is most likely, the policy had to do with China. Further, as you’ve hopefully read every trade deal sets limits on both parties trade policy… that’s the point.
The US threats are real, and it is no stretch to assess that Trump's goals are zero-sum. Which means that he means to reduce Canada's capacity to resist US pressure on most any issue.
That is, by definition, a dynamic that would lead to the diminution of our sovereignty.
My favorite part: “In some respects, those arguing against retaliation are correct. Putting tariffs on American imports to Canada will hurt the Canadian economy. We will all be poorer for it. Incomes will fall, jobs will be lost and prices will rise. That’s not an opinion, it’s an analysis informed by 250 years of academic research on free trade.” And then he goes onto completely ignore this because of his political analysis, just what you want an economist for.
I love being sandwiched between a hostile US and a hostile government at home. The way I see it they both want to impoverish me, ruin my country's economy for irrational reasons, and won't leave me the fuck alone to live my life.
We're living in a kakistocracy layer cake. It's shit all the way up and all the way down. Throw all the leaders in a volcano and the world would be a better place.
Surely the "insidious and crafty animal vulgarly called a statesman or politician" is a better description of Trump, Bessant and Lutnick?
In any case, the Trump administration has clearly signalled that it is willing to go in for full-on destruction in order to achieve the nutter's goals, which are NOT economic, but political and personal in nature.
What I do not understand are the so-called Canadian conservatives who seem to believe that it is Canada, and not Trump, who is at fault here.
Even if retaliation doesn't cause the US to change their behaviour, the best move is STILL to impose counter-tariffs. Letting our manufacturing sector melt away is a sure path to poverty and subjugation. Yes, there are economic costs to retaliation, but there is no no-cost option here. The cost of NOT retaliating is huge.
Trump is unravelling 40 years of integration, and Canada needs to decide if its going to be a sovereign nation with its own capacity to make stuff and control its own destiny, or not.
WENT TO LUNCH WITH TWO ECONOMISTS (TRUE STORY):
Just after Carney negotiated – caved - lied-about the deal to open the Gordie Howe Bridge I happened to be at lunch with two economists. I offered the opinion that Carney had offered up a series of concessions without receiving anything in return, and that maybe he should have just walked away from offering yet another. After all, we have been using the Ambassador Bridge, and it was still there.
The reaction was immediate. Both jumped on the idea as ridiculous and tested each other on repeating from memory a quote from Keynes that supported their claim. During the lunch I was informed that I didn’t know much, if anything about decision “theory”. At one point, one of the economists cut me off stating that we were discussing negotiation “theory” of which I didn't know anything about, but the economist talking certainly did.
I thought it odd that both were aware that I had held executive positions during my work life, but they never asked what “experience” I may have that would be relevant. I would have said that I was my firm’s sole lead on a 10-figure/year negotiation. Not in the league of what the PM is doing but not haggling over the price of a used car either.
They love Carney as he is an economist and did his PhD in decision theory. So, “he knows”. It’s nice to see that Mr. Fellows rises above that sort of one upmanship. However, he seems to still need to ground his argument in the thinking of The Great Man.
From the perspective of how public policy is conducted, I would suggest that we all pause and reflect on the approach of Mexico to these negotiations. I’m not aware that Governors of various states are childishly trying to score political points by insulting the famously thin skinned Trump (hello Wab, Doug and Dave). Maybe consider how stoic Finland would conduct itself with its history of negotiating and successfully conducting a real war with an overpowering neighbour.
We might even consider that the Federal government is engaging in emotional manipulation for its own internal political purposes and that choosing to inflame emotions by calling it a "Trade War" instead of a "trade dispute" was not an accident. However, that would require putting aside the intellectual filter that comes from relying on The Great Man as the source of legitimacy for one's position and simply looking at what is clearly before us.
Beauty.
"Retaliation has one goal and only one goal: to make the other guy re-think his actions."
The person who should be rethinking his actions is Carney. He ignored Trump, intentionally deceived Canadians about his 'meetings with Trump' all the while pretending to be honest while lying.
Carney ran a campaign on Elbows Up and Team Canada where he used false arguments that seemed completely plausible and deceptive language to hide his lies. Carney has manipulated the media in his favour. The bought and paid for media has colluded with his chicanery to manipulate the citizens of Canada.
Carney is not here for Canada. If he was he would have been in Washington as soon as he was elected working with Trump, not snidely condemning the man. Is Trump crazy, no doubt. Is Carney a coward and liar - no doubt.
Trump is a senile criminal lunatic. It is not feasible to make an agreement with him because he will break it the first chance he gets.
It is also not useful to lick his feet, because he kicks bootlickers too. So let's save ourselves the humiliation of surrendering like cowards and have the guts to tell him no. Carney has the guts.
While probably not an exhaustive list, Carney has caved on the following U.S. pressure:
Digital Services Tax (DST), Nato Defence Goals, Border and Security Plans, Defense Commitments, Tariff Adjustments, and we still don’t know what he gave the US to open the Gordie Howe bridge.
He told us that the US proposals were unfair but did not have the decency to tell us what they asked for.
Carney described the breakdown of trade negotiations as “uneconomic” and “unfair” demands. There is a giant bit of obfuscation.
People much smarter than me fear that Carney has complied too easily with Trump's demands, which will only cause Trump to carry on with his usual bullying tactics. They are concerned that Carney might ‘surrender other key priorities, such as environmental standards, cultural industries, and Arctic sovereignty.’
As you say, Trump kicks bootlickers too. That certainly defines Carney.