Canada - USA Trade War commencing March 2025 #3

[otto]

I've been trying to understand Trump's new world order, and how it works. His goal is to ensure that all things needed by the USA population are manufacturing and produced in the USA. Those products will presumably be cheaper than imported items. This also presumes that USA produced/manufactured goods are of superior quality to all imported items.

All imported items will have a 25% tariff, which is a tax paid by the consumer to the USA government, the newly established External Revenue Service.

What doesn't add up is that USA manufacturers will see that, for example, a t-shirt produced in the USA sells for $10, but a quality design t-shirt imported from Italy sells for $25. Won't the USA manufacturer increase the price to match the imported t-shirt, since it will be evident that buyers are willing to pay extra?

Eventually, everything produced in the USA will be the same price as imported items, even though the imported item includes a tax paid by the consumer to the USA government. It seems like a new world order that will predictably fail to reduce the cost of living. It will merely result in increased government tax for the consumer.

For far too long, we have relied on taxing our Great People using the Internal Revenue Service (IRS). Through soft and pathetically weak Trade agreements, the American Economy has delivered growth and prosperity to the world, while taxing ourselves. It is time for that to change. I am today announcing that I will create the EXTERNAL REVENUE SERVICE to collect our Tariffs, Duties, and all Revenue that come from Foreign sources. We will begin charging those that make money off of us with Trade, and they will start paying, FINALLY, their fair share. January 20, 2025, will be the birth date of the External Revenue Service. MAKE AMERICA GREAT AGAIN!

Donald J. Trump / @realDonaldTrump

[Truth Social, Jan. 14, 2025, 11:28 AM. Later reposted on X.]

Trump and the External Revenue Service: What Just Happened? | Tax Notes

In this installment of The Last Word, Goulder comments on the new federal agency to administer U.S. tariffs, and the motivations behind it.

www.taxnotes.com

 

[otto]

I didn't think there was any truth in it, until Donald and his administration started saying there were other countries interested in Greenland. Them saying that has now made it so.
It is not for Donald to assume that he has any right to take another country, just because "they need it". There are other ways to protect Greenland without Donald stomping around having a hissy fit. He doesn't want it for defense or security purposes, he wants it for it's natural resources, resources that will line his and his other sickeningly wealthy associates pockets. Donald isn't about the people, the greater good, international security and I don't believe Donald is about making America great, Donald is about Donald and what best serves Donald.

Mini rant over

(I think putting BBC breakfast on this morning and seeing Donald and JD's faces hitting my TV screen at 6.00am has made me slightly crabby )

Moo

Same problem in Canada - can't turn on the CBC news without hearing Trump go on and on about what a great guy he is robbing countries of their natural resource wealth.

 

[Lyanna]

Same problem in Canada - can't turn on the CBC news without hearing Trump go on and on about what a great guy he is robbing countries of their natural resource wealth.

Just makes the blood boil

Moo

 

[acutename]

Look at the confidence with which Vance declares Trade War victory over Canada! He is certain that Canada will lose the Trade War and ultimately be absorbed by the USA.

The USA goals are clear. Canada and Greenland represent nothing more than natural resource wealth that the USA economy needs for future/next-generation survival of the USA.

"During his Greenland visit, Vance also briefly spoke about Canada — but on the subject of tariffs the U.S. has threatened, not the separate annexation threat Trump has repeatedly raised against his country's next-door neighbour.

"There is no way that Canada can win a trade war with the United States," said Vance, when answering a question from a reporter about the impact Americans may feel from the imposition of tariffs on goods from U.S. allies.
...

A White House official has said Greenland has an ample supply of rare earth minerals that would power the next generation of the U.S. economy."

https://www.cbc.ca/news/world/vance-denmark-greenland-1.7496477

How do you actually "win" a trade war?
Is one country more bankrupt than another?

 

[otto]

How do you actually "win" a trade war?
Is one country more bankrupt than another?

Yes. The USA government has said that tariffs imposed on Canada are intended to cause economic hardship, job loss, recession, business closures, homelessness and extreme poverty such that Canadians beg the USA to annex Canada. That is the goal.

Canada has a smaller population that has relied on the USA through NAFTA and CUSMA for tariff-free goods. The smaller population is key to collapsing first.

Canada's response is to seek new trade partners. The USA government response is to threaten Canada and the EU that if they establish a trade relationship, Canada and the EU will suffer greater tariffs and economic damage.

The USA wants to damage Canada's economy and to isolate Canada from having any support from all other countries.

 

[LovesPeace2]

Same problem in Canada - can't turn on the CBC news without hearing Trump go on and on about what a great guy he is robbing countries of their natural resource wealth.

Turn on any channel and it's all trump and vance. Its just all negative all the time. I know we are losing patience with them along with many other countries. I don't trust Trump's good pH call with Carney I'm pretty sure no one does, trump is just looking for a better way to stab us in the back. Im waiting for the day when trump realizes his only allies is Russia .We are slowly finding other places for trades. We have found other places to buy products and are creating other trade deals with the EU/UK/Aussie that don't include USA. We are now not doing holidays in the USA.instead of mall of America there's west Edmonton mall. We have Clearwater lake in Manitoba that's the clearest lake in North America 3 Rd clearest in the world. There's so many other attractions in every province. There's other countries to visit that have cheaper rates for holiday pkgs. . But we did have a good chuckle last night about toilet paper everyone thought the COVID issue was bad. The tariffs on softwoods will effect toilet paper in the USA because with the tariffs adding about 50% more in cost the prices will rise and supply will be down. It won't effect us as much because we boosting sales across the ocean. So we will have the sawdust and lumber from the pulp and paper mills. Jmoo

 

[Lyanna]

I think the States are in significant financial difficulty, perhaps verging on debt defaults.
They're cutting federal departments, cutting funding and increasing tariffs all things a country whose about to declare themselves as "broke" do.

Moo
Ebm

 

[Warwick1991]

I think the States are in significant financial difficulty, perhaps verging on debt defaults.
They're cutting federal departments, cutting funding and increasing tariffs all things a country whose about to declare themselves as "broke" do.

Moo
Ebm

The US economy was doing well until Trump took office. The cutting of Federal agencies and firing workers is mainly political - the purpose is to make the agencies go away. The logic of imposing tariffs seems to have no purpose - use of tariffs for revenue is an obsolete economic strategy that died well before WW2. Then again, almost all of Trump's private enterprises have gone bankrupt, so one never knows.

 

[otto]

Automaker tariff that is confusing everyone can be seen with pistons. Image is from BBC, red text added by me. Is there a tariff on the car part that is exported from Canada via the USA to Mexico?

There is a 25% tariff added to the cost of the piston when it is exported from Mexico to the USA. That 25% goes to Trump's External Revenue Service (slush fund?).

Trump said that USA vehicle prices must not increase.

How will he do that? Will he order USA automakers to deduct 25% off the cost for the piston from Mexico - failure to pay for the product? OR will the USA automaker pay fair price for the piston and suffer financial loss, thus resulting in a less profitable business?

Trump will not do what Canada is doing - he will not set aside billions of dollars to protect automakers during slowdown, and job sharing or job loss.

BBC Link

 

[LovesPeace2]

Nearly half of small businesses do not see the U.S. as a reliable partner: CFIB

TORONTO — Canadian small businesses are losing confidence in the U.S. as a reliable trading partner, and are shifting to suppliers in domestic and other international markets in the wake of President Donald Trump's tariffs.

ca.finance.yahoo.com

new report by the Canadian Federation of Independent Business says 47 per cent of members it recently surveyed do not consider Canada's southern neighbour to be a reliable trading partner anymore.

 

[Herat]

I think the States are in significant financial difficulty, perhaps verging on debt defaults.
They're cutting federal departments, cutting funding and increasing tariffs all things a country whose about to declare themselves as "broke" do.

Moo
Ebm

The idea is that all this cutting of federal expenses and "tariff" income will offset a large decreases in taxes in the upcoming House budget negotiations. You know, the simple one great beautiful bill that simpleton Trump is harping on about to reduce the US governmental debt.

It is very clear the tax reduction bill will be full of potholes and booby traps for USanians of modest to lower incomes, and will be full of baskets of tax dodges for the truly wealthy billionaires that keep Trump in office. The kind where a modest family pays about 25% of their income in tax, living paycheck to paycheck while billioniares pay nothing, just like how Trump pays nothing. Plus lots of hidden pork going to various insurance, healthcare, agriculture, tech, and manufacturing interests whose lobbyists have been smoothing the path for those industries to make up whatever they claim to be losing due to tariffs in backdoor handouts from the House republicans.

Plus all the added bonuses of shutting down all avenues of protest, of legal recourse, or of financing any opposition.

Today I'm feeling very glum about this all.

 

[otto]

Turn on any channel and it's all trump and vance. Its just all negative all the time. I know we are losing patience with them along with many other countries. I don't trust Trump's good pH call with Carney I'm pretty sure no one does, trump is just looking for a better way to stab us in the back. Im waiting for the day when trump realizes his only allies is Russia .We are slowly finding other places for trades. We have found other places to buy products and are creating other trade deals with the EU/UK/Aussie that don't include USA. We are now not doing holidays in the USA.instead of mall of America there's west Edmonton mall. We have Clearwater lake in Manitoba that's the clearest lake in North America 3 Rd clearest in the world. There's so many other attractions in every province. There's other countries to visit that have cheaper rates for holiday pkgs. . But we did have a good chuckle last night about toilet paper everyone thought the COVID issue was bad. The tariffs on softwoods will effect toilet paper in the USA because with the tariffs adding about 50% more in cost the prices will rise and supply will be down. It won't effect us as much because we boosting sales across the ocean. So we will have the sawdust and lumber from the pulp and paper mills. Jmoo

We've known for a long time that USA news includes a lot of fear-mongering - the what-if scenarios that are meant to keep the population off-balance and worried. It's such an ugly thing to see it in Canadian news, but we do have to know what ugly threats and propaganda are coming our way.

I was re-assured by Carney's statement after the phone call, where he re-stated that supply managed products are not negotiable (e.g.: dairy), Canada will secure new trade partners, the former CUSMA relationship is over, Canada will strengthen military and infrastructure, and Canada will respond in kind when the USA government imposes new tariffs on April 2.

One of the greatest secrets in Canada is that we have sandy beaches. Many people in the USA find that hard to believe.

 

[otto]

I think the States are in significant financial difficulty, perhaps verging on debt defaults.
They're cutting federal departments, cutting funding and increasing tariffs all things a country whose about to declare themselves as "broke" do.

Moo
Ebm

That's exactly what the USA government is trying to tackle with tariffs - the gigantic debt. The BIG IDEA is that foreign countries will pay that debt.

"Per-person debt has increased at an average rate of 5% per year since 2001. As of 2024 — the last year for which there is population data — the federal debt was equivalent to $106K per-person, for a total of $36.2 trillion."

How much debt does the US have? | USAFacts

About $36.9 trillion as of July 2025. The federal government borrows money when its spending and investments cannot be funded by federal revenue alone; this debt enables the government to pay for programs and services when funds aren’t immediately available.

usafacts.org

 

[otto]

Nearly half of small businesses do not see the U.S. as a reliable partner: CFIB

TORONTO — Canadian small businesses are losing confidence in the U.S. as a reliable trading partner, and are shifting to suppliers in domestic and other international markets in the wake of President Donald Trump's tariffs.

ca.finance.yahoo.com

new report by the Canadian Federation of Independent Business says 47 per cent of members it recently surveyed do not consider Canada's southern neighbour to be a reliable trading partner anymore.

It sounds like Canadians are not lacking common sense!

 

[LoveyG]

I've been trying to understand Trump's new world order, and how it works. His goal is to ensure that all things needed by the USA population are manufacturing and produced in the USA. Those products will presumably be cheaper than imported items. This also presumes that USA produced/manufactured goods are of superior quality to all imported items.

All imported items will have a 25% tariff, which is a tax paid by the consumer to the USA government, the newly established External Revenue Service.

What doesn't add up is that USA manufacturers will see that, for example, a t-shirt produced in the USA sells for $10, but a quality design t-shirt imported from Italy sells for $25. Won't the USA manufacturer increase the price to match the imported t-shirt, since it will be evident that buyers are willing to pay extra?

Eventually, everything produced in the USA will be the same price as imported items, even though the imported item includes a tax paid by the consumer to the USA government. It seems like a new world order that will predictably fail to reduce the cost of living. It will merely result in increased government tax for the consumer.

Trump and the External Revenue Service: What Just Happened? | Tax Notes

In this installment of The Last Word, Goulder comments on the new federal agency to administer U.S. tariffs, and the motivations behind it.

www.taxnotes.com

You're forgetting that the US worker who makes that t-shirt will expect a wage of 15-20 dollars per hour, plus health insurance. Add that to the cost of making t-shirts in the US.

 

[Cedars]

Today I'm feeling very glum about this all.

I hear you. IMO, that's the danger of being too immersed in the news. The world is immensely complex, we can't predict what will happen or what the consequences of anything will be, over a period of time. Individuals can't control the world (including the President of the US), much less an ordinary person. Don't throw your life away in despair because we don't live in a perfect world.

One commentator (former Canadian living in the US) advised Americans to just focus on what each can do within the democratic (small d) system. Protests just bring out the extremists. Reasonable people, doing reasonable things, is IMO, what the world really needs.

 

[otto]

The billboards have gone viral, but people in the USA mostly don't believe the message. That means government propaganda in the USA is more successful than facts.

"The federal government has launched an anti-tariff billboard campaign in 12 mostly Republican-voting states and in Washington, D.C. Messages on the billboards include, "Tariffs are a tax at the gas pump" and "Tariffs are a tax on hardworking Americans."

Although the jury is still out on the campaign's effectiveness, one thing's for certain — it has gone viral.
...

The billboard campaign is up against ubiquitous messaging from Trump that imposing tariffs on goods imported from other countries will force companies to build factories in the U.S., creating more jobs and strengthening the economy."

https://www.cbc.ca/news/business/billboard-tariffs-canada-1.7496882

https://twitter.com/x/status/1904993523021005019

 

[LoveyG]

I think the States are in significant financial difficulty, perhaps verging on debt defaults.
They're cutting federal departments, cutting funding and increasing tariffs all things a country whose about to declare themselves as "broke" do.

Moo
Ebm

MOO, the cutting of federal agencies is not because of financial difficulties. It's just a decimation of the federal government a la Trump. Payback from all the law suits and felony convictions? Who knows. It's also (MOO) because First Lady Musk wants to remove the oversite departments that held his business dealings to some standards (Trump too, IMO). The inspector generals were among the first to go.

 

[iamshadow21]

You're forgetting that the US worker who makes that t-shirt will expect a wage of 15-20 dollars per hour, plus health insurance. Add that to the cost of making t-shirts in the US.

Unless it's made by prison labour.

 

[Herat]

The US economy was doing well until Trump took office. The cutting of Federal agencies and firing workers is mainly political - the purpose is to make the agencies go away. The logic of imposing tariffs seems to have no purpose - use of tariffs for revenue is an obsolete economic strategy that died well before WW2. Then again, almost all of Trump's private enterprises have gone bankrupt, so one never knows.

The US economy was hampered by the growing governmental debt that had been a political football kicked down the field by every president, not just Democratic ones. The House of Representatives, who set the budget, was failing every year to come to a significant resolution, so that every year there were precipitous "negotiations" that ended up in only extending debt talks for another 6 months.

There is a rational reason to have excrutiating examination of Federal Government spending. However it needs to be a careful, professional, and responsible review with consideration to consequences of defunding programs or firing personnel.

Trump has failed on all counts on this. Now he is covering up by disregarding the rule of law, the Constitution, and using his circus barker braggadocio to instill trade policies, tariffs, threats to soverign nations, and complete disregard for responsible law and order.