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“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

DEVON KRUGGEL: This is what economic war looks like


We, in Canada have been lucky for years with American governments. Our trade disputes have been relatively tiny, small, and minimally harmful over all. To those that did get harmed, it felt like the world was ending. But if you weren't one of those people you probably never thought about it.

Today, we are on notice that almost every Canadian working is now a potential casualty in a trade war started by Donald Trump. About 78% of all our trade goes to the United States. That's about $2 billion a day, every day.

Yes, tariffs will hurt American consumers. No one with a brain is going to dispute that.

They will hurt Canadian workers that rely on trade for their jobs a lot worse in the short and medium term.

A 10% tariff as Trump initially proposed would hurt our economy. A 25% tariff as Trump is now boasting will devastate our economy from coast to coast to coast, all sectors, all professions.

A recession is guaranteed in this scenario and it will likely be long and deep.

How does Canada respond? Well, we can put tariffs on American goods but that would hurt us even more. Our trading relationship with the USA is not symmetrical. We rely on them far more than they rely on us. They have a huge advantage in a trade war.

It is like this. Canada is a small snail on the ground. America is a guy wearing very large boots. We can't beat the US or even bring them to heel in a trade war.

Trump is demanding Canada secure its border with the USA. Note that he's not demanding that America secure its border. He wants us to shoulder the cost. He also wants Canada to crack down on Chinese imports that then go into the US market via our ports. Doug Ford first brought this up in Canada a couple of weeks ago vis a vis Mexico. Mexican authorities are already forcing companies to "buy local" parts instead of using Chinese imports, for example.

If we do what Trump demands will that fix things? Of course not. Trump will never be satisfied. Canada and Mexico will always be enemies in his mind.

Conservatives might say that Pierre Poilievre will better speak to Trump. Yes, that is a possibility. Trump does not like Justin Trudeau at all. That's pretty clear. Hate might be the more appropriate word. But I don't think Poilievre will have much luck with Trump either.

This boils down to the simple fact that fascists always need external and internal enemies to prop up their regimes. Trump cannot make nice with an enemy unless he has a good replacement. He needs the enemy, closer the better, to keep his base in a state of agitation.

What about CUSMA? Don't we have a trade agreement? As the CBC article shows, Trump is all but tearing up an agreement he signed with us. The treaty will be null and void and there's nothing we can do about that.

What about the World Trade Organization or WTO? Can they intervene? The UN and the WTO is a UN body operates through agreements and negotiation. When you have an irrational fascist in one country tearing up agreements it should be clear he won't care what WTO or anyone else says.

Okay, is there any good news? Well, there is a good chance what Trump said yesterday may never happen or not as extreme. Cooler heads in his administration, and there are a few, might get him to scale this stuff back. Congress may intervene as much as they can because they have a lot of members that are in states relying on that stable trade relationship.

I think the best bet on mitigating this impending disaster are American consumer groups. They have huge voice in the US. Americans don't like paying more for the things in life they both need and want. When prices go up, and inflation spikes, Trump and his administration will be facing an epic backlash.

Of course, that might take time.

One thing is certain, 2025 is going to be off to a very bad start

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