4d chess
Identifying bad international trade partners like the infamous Canadians who make it inappropritately cheap for Americans to build houses. Everyone is complaining about the glut of housing thanks to cheap Canadian lumber
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President live now talking about retaliatory tariffs and bringing manufacturing back to USA.
The old “In Two Weeks” trick. That’s the… hundredth time I’ve fallen for that this presidential term!
Threat now up to 250% on canadian lumber and dairy.
So glad my building project is nearly done.
Eta- 250% might just be for dairy
USA is just going to cut all its trees down to meet the demand.
No need to cut trees for new housing. We’ll have hundreds of empty government buildings available and will have even more houses and buildings available from bankruptcies.
And, of course, RFK Jr will work on the demand side.
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as well as the supply
Trump making noise about the Columbia River (aka “the giant faucet in Canada”) whose flow has been jointly managed by the US and Canada since 1964 to benefit both countries. Trump doesn’t want to sign the renewal of the treaty despite its improved terms for the US: probably wants to divert the water to southern states as impracticable as that is.
I say let the Columbia River treaty lapse. The source of the Columbia River is in Canada: faucets can be turned off as well as on.
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I guess one could start a canal/tunnel south of.Castlegar where the Pend Oreille flows in. Head due west to south of kelowna to divert the okanagan and keep going west to meet the Fraser river.
can canada put a tariff on the water that flows south? how would it be calculated? I mean, it could be offset by the red river tariffs from the US.
but I suspect canada doesn’t rely on the red river flow nearly as much given how much fresh water is in that area already
dam, i wonder what Canada can do
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This seems to assume that trade only goes one way…
It’s more about the upstream use of the water. We could use more for irrigation and dams.
Interesting reading a quote this morning from a Pennsylvania wire manufacturer who was complaining about the tariffs driving up his price of his steel purchases (American steel producers have already raised prices by about 20% in anticipation of the tariffs). The executive claimed this all would have been avoidable if Canada didn’t allow thousands of terrorists to enter the USA. The Trump misinformation campaign is working.
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Part of his strategic theory is that the US could use its size to strong arm other countries on trade.
Effectively what the US is trying to do to Canada right now. Accept more of our exports or we severely damage your trade with us.
But where he fails (completely in my view) is that trade flows will diversify around the US (he doesn’t see this as a big risk given that the US is largely a closed economy vs Canada (much more open economy)) and also people can stop buying US products and services if you piss them off enough (this will damage US exports and there will be a political price to pay back home in the US).
My economic training tells me that this plan of his is not going to survive contact with reality. Its the type of thing you write for fun (like a what-if scenario analysis) when working for a hedge fund and/or think tank.
Problem for the US and the world is that Trump has used this to further cement his own biases about tariffs and trade.
Its also completely possible this was written with Trump in mind as well. They rolled something out so Trump would then be able to point to someone with expertise.
Most Americans, sadly, will believe Trump’s statements on Canada as US sources are not fact-checking him on Canadian issues. At least with internal issues, the liberal media is correcting him.
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Red River’s main function is to flood southern Manitoba each spring. We need more flood prevention cooperation from the Americans on the Red but Americans don’t care as the worst flooding happens in Canada. Not a problem with the Columbia River because of the international cooperation on it.
We have a similar problem in BC on the Nooksack River that runs just south of the Canadian border: it caused devastating floods in our Fraser River valley a few years ago. The river runs on higher ground through the US so the flooding only affects Canada. BC offered to help pay for dykes along the river but Americans just shrug their shoulders as it doesn’t affect them adversely.
One thing they will notice though.
When you have tariffs on specific goods, their price will rise by a % of the tariff (producer absorbs some of the loss while the consumer sees prices rise so there is a loss in consumer surprlus)
BUT…
What has historically happened, is that other producers (not impacted by tariffs) take advantage of these price rises to raise prices for their own goods and services.
So the inflation wave that is about to hit the US could be a lot larger than people are expecting, and could also last for years if Trump keeps this up.
The population blamed Biden for the last inflationary wave, so Trump would also be in the crosshairs as well.
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The Trump Administration is now admitting that the tariffs will cause “temporary” inflation. The implication is that prices will go up but the general level of prices will go down afterwards. I think folks here know that a blip in inflation generally just establishes a new higher threshold of prices. However Trump is now selling higher prices from tariffs as a temporary phenomenon.