Trump's Tariff Wars Will Hurt U.S. The Most
President Donald Trump seems to believe that tariffs can help to bring manufacturing back to the States.
Trump's tariffs have so far been aimed at four targets, the U.S. neighbors Canada and Mexico, China and, soon to come, the European Union.
During his first term Trump negotiated the U.S.M.C.A. with Mexico and Canada, a free trade zone covering the U.S. and its neighbors. He is now attempting to change the rules of it. But the way he does so is inconsistent.
On January 21 Trump promised tariffs on Canada and Mexico. On February 1 he announced them. Three days later he delayed the implementation of those tariffs. On February 27 he said the tariffs would go into effect on March 4. On March 5 he was again forced to pull back (archived):
President Trump said on Wednesday that he would pause tariffs on cars coming into the United States from Canada and Mexico for one month, after a 25 percent tariff that he placed on America’s closest trading partners a day earlier roiled stock markets and prompted stiff resistance from industry.Karoline Leavitt, the White House press secretary, read a statement from Mr. Trump on Wednesday saying that White House had spoken with the three largest auto makers, and that a one-month exemption would be given to cars coming in through United States-Mexico-Canada Agreement.
A one-month exemption is a joke. It takes years to move parts production from one country to another. There are hundreds of companies in Mexico, Canada and the U.S. which make the myriad parts that go into a car. It is an completely integrated industry which took years to build.
U.S. car manufacturers had trusted that U.S.M.C.A. would hold. Should the tariffs apply anytime soon they will have to increase their prices by hefty margins or halt their production.
Trump's tariffs in north America can largely be seen as pressure method for gaining some valuable concessions from neighboring countries. They are part of a negotiation scheme and unlikely to be a longer term problem.
But Trump's tariffs against China are a different animal. The Trump administration views China as a strategic enemy and would like to seriously hurt it. But China is able to hit back (archived):
Minutes after President Trump’s latest tariffs took effect, the Chinese government said on Tuesday that it was imposing its own broad tariffs on food imported from the United States and would essentially halt sales to 15 American companies.China’s Ministry of Finance put tariffs of 15 percent on imports of American chicken, wheat, corn and cotton and 10 percent tariffs on other foods, ranging from soybeans to dairy products. In addition, the Ministry of Commerce said 15 U.S. companies would no longer be allowed to buy products from China except with special permission, including Skydio, which is the largest American maker of drones and a supplier to the U.S. military and emergency services.
Lou Qinjian, a spokesman for China’s National People’s Congress, chastised the United States for violating the World Trade Organization’s free trade rules. “By imposing unilateral tariffs, the U.S. has violated W.T.O. rules and disrupted the security and stability of the global industrial and supply chains,” he said.
Trump claims that tariffs on China are necessary to stop the illegal import of Fentanyl, an addictive synthetic opioid widely used in the U.S.
China counters that it already has put strong controls on Fentanyl and its precursor chemicals. It can not be blamed for a problem that solely exists within the United States:
The reason why the fentanyl issue in the US is so serious has never been external; it has nothing to do with China, which strictly prohibits drugs. Illicit fentanyl started to enter the US market as early as the 1980s. Later, media revealed that US pharmaceutical companies concealed the addictive properties of synthetic opioids and that doctors overprescribed painkillers, leading to widespread addiction among patients. Statistics show that with 5 percent of the world's population, the US consumes 80 percent of the world's opioids, but still has not permanently scheduled fentanyl-related substances as a class. The almost abnormal demand has boosted the development of the illegal fentanyl market, fundamentally contributing to the proliferation of fentanyl in the US.
The Global Times points to the social causes of drug addiction:
[T]he lack of social governance in the US has exacerbated the drug problem. US Vice President JD Vance described a similar situation in his autobiography. Many low-income families live in chaotic community environments with a lack of education and supervision. This has led to many children living in adverse conditions of drug abuse and trafficking, forming a vicious cycle that is difficult to break.
China's government spokesperson is promising to fight back:
Intimidation does not scare us. Bullying does not work on us. Pressuring, coercion or threats are not the right way of dealing with China. Anyone using maximum pressure on China is picking the wrong guy and miscalculating. If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China by treating each other as equals.If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end.
Such language from China is far from the usual one. It therefore seems unlikely that there will soon be a compromise between the U.S. and China.
With respect to Europe the U.S. claims that it is importing more goods from Europe than it can export to it. That is true but does not cover the full width of economical relations. The U.S. is exporting way more services (think software) to Europe than Europe is exporting to the U.S. The total of goods and services exchanges is a wash. If the U.S. insist on putting tariffs on European goods the EU can counter adding a toll to all U.S. services. The results would be, in theory, a tie.
Tariffs however are dangerous. They distort markets and add significant costs to all participants. Their pain will be mostly felt by U.S. consumers:
All the planned tariffs would take the US tariff rate to above 20% in just a few weeks, the highest since pre-WWI. As Joseph Politano points out, the costs of these actions are enormous, covering $1.3trn in US imports or roughly 42% of all goods brought into the United States, or the single-largest tariff hike since the infamous Smoot-Hawley Act of nearly a century ago.
...
The total costs of these tariffs would raise $160bn from US consumers and businesses paying more for their purchases of imported goods, with more to come. Trump’s Tuesday measures are only 40% of his proposed measures. If the next batch is implemented, it would raise the cost of imports to over $600bn, or 1.6% of GDP.
...
So worried is the International Chamber of Commerce in the US, that it reckoned that the world economy could face a crash similar to the Great Depression of the 1930s unless Trump rows back on his plans. “Our deep concern is that this could be the start of a downward spiral that puts us in 1930s trade-war territory,” said Andrew Wilson, deputy secretary-general of the ICC. So Trump’s measures may go well beyond “a little disturbance”.
Posted by b on March 6, 2025 at 15:55 UTC | Permalink
next page »Let’s us wait one month b; "never interfere with an enemy while he’s in the process of destroying himself", Napoleon Bonaparte -- The Battle of Austerlitz (2 December 1805/11 Frimaire An XIV FRC), also known as the Battle of the Three Emperors.
Posted by: pepe | Mar 6 2025 16:12 utc | 2
Those tariffs are just import duties. All countries have them, I do not know what is all the fuss about it.
The fact that the US did not have import duties on Canadian and Mexican goods is quite astonishing actually.
Canada and Mexico do charge duties for American goods and is some cases even prevent the goods to enter the market.
Canada does not allow US dairy products to its market for example.
And the US federal government has to have some source of revenue. They cannot raise taxes because that is very unpopular, so duties on imported goods are good alternative I guess.
Posted by: hopehely | Mar 6 2025 16:14 utc | 3
Trump has been briefed on the real state of the US economy:
If they say they're thirty six trillion in debt it actually means one hundred thirty six trillion.
If they say Ukraine can hold out for six months the truth is ninety days.
It's always WAY worse than the powers that be admit.
Hence all the flailing at their neighbors. If all else fails push Ralph Wiggum around for a quick "win".
Posted by: Inevitabllity | Mar 6 2025 16:16 utc | 4
Trudeau's tariffs hurt Canadians too. It'll particularly affect appliances jeans and wines here. So it's bad when others do it too.
Posted by: Neofeudalfuture | Mar 6 2025 16:17 utc | 5
Watching Trump walk back his tariffs, firstly with the integrated North American auto trade and now possibly with everything covered by the USMCA is entertaining. The bully is being shown to be not that clever at understanding complex issues and pretty easy to push back against.
My take on this, as it is so relevant Tariff Mania: Let the Tariff Games Begin ...
I agree with B, Trump already renegotiated NAFTA into the USMCA and corporations have been integrating their North American supply chains for decades; it will take years and perhaps a decade to undo that and at great investment cost and write offs. With respect to Canada, the immigration and fentanyl stuff is pure BS and Canada runs a deficit in goods with the US. Its only the oil exports (heavy oil needed by the US refiners) that turns that into a surplus. Canada also runs a services deficit with the US. With respect to Mexico, the immigration is because the US keeps destroying Latin American nations causing their populations to migrate, a great case in point is Venezuela, and the US authorities could stop the drugs easily if they really wanted to (i.e. through the financial system).
Trump will damage the US economy, and is also greatly affecting US relations with its two neighbours, and seems also to be damaging his own reputation with the MAGA folks.
Posted by: Roger Boyd | Mar 6 2025 16:21 utc | 6
thanks b
the recycled ''war on drugs'' approach by trump, under the cover of tariffs is an interesting approach.. perhaps he could consider why so many people in the usa are resorting to drugs in the first place, but i doubt he will..that would require an element of reflection which is not seen in his public persona as emperor of the usa.. 'why are your little people resorting to drugs emperor?'
i agree with @ 2 pepe... lets wait and see what this looks like in a month... the other obvious thought is the concept of a complete financial reset, which seems to have been in development especially since covid... how is this crash of the system coming along and is this the true role for the new emperor trump? lol...
Posted by: james | Mar 6 2025 16:21 utc | 7
Posted by: Inevitabllity | Mar 6 2025 16:16 utc | 4
> Trump has been briefed on the real state of the US economy:
Well Biden was briefed those stats too, so why he didn't do squat? Weak knees?
Posted by: hopehely | Mar 6 2025 16:24 utc | 8
@Posted by: Neofeudalfuture | Mar 6 2025 16:17 utc | 5
US wine can easily be replaced with the products of other nations and domestic wineries. I think that the sales of many US brands will be impacted longer term (Tesla!!) by not only the tariffs but also Trump's degrading remarks about Canada. Trudeau's tariffs are a response, without which the bully will just keep pushing. Shame that Trudeau fucked up Canada's relationship with China so badly by slavishly following the US (including Trump's first term). Its good that this may actually drive the provinces to get rid of their ridiculous inter-province trade restrictions.
Posted by: Roger Boyd | Mar 6 2025 16:27 utc | 9
I could spend a considerable amount of time on the idea that tariffs on China are less than tariffs on the EU/ Canada because President Trump actually respects China, but why bother? If someone is claiming that Canada would suffer less damage than the United States during an extended trade war, go ahead and disregard anything else that person says. They're at least as delusional as anyone in the European Commission.
Posted by: They Call Me Mister | Mar 6 2025 16:30 utc | 10
The valuation of the US stock market is largely dependant on IP protections codified in 1998 (IIRC) with the Digital Millennium Act. The key provision is the $500,000 fine and/or prison for jailbreaking apps or reverse engineering to optimize for users rather the IP holders. DMA was exported through WTO, NAFTA etc. Unilaterally nullifying those arrangements by implementing tariffs prohibited therein opens the door for scrapping erstwhile treaty partners to scrap DMA, potentially wiping out as much as a third of the rents the US stock market has come to rely on. Cory Doctorow has been going on about this for a while.
Posted by: jsn | Mar 6 2025 16:30 utc | 11
@Posted by: hopehely | Mar 6 2025 16:14 utc | 3
You understand that the US and Canada and Mexico have a free trade agreement that covers the vast majority of trade between the three countries, negotiated with and signed by Trump?
Posted by: Roger Boyd | Mar 6 2025 16:31 utc | 12
Posted before proofing: scrap "scrapping" and that second to last sentence makes sense.
Posted by: jsn | Mar 6 2025 16:33 utc | 13
Tariffs against Canada?
Certainly not for Pratt & Whitney!
https://aiac.ca/members/pratt-and-whitney-canada-corp/
Posted by: too scents | Mar 6 2025 16:34 utc | 14
@Posted by: They Call Me Mister | Mar 6 2025 16:30 utc | 10
Trump can't win a trade war with China. He could with Canada and Mexico but at significant cost to the US economy, and to the relationships between the three countries. The level of anti-US sentiment in Canada is already growing pretty rapidly.
Posted by: Roger Boyd | Mar 6 2025 16:35 utc | 15
Posted by: Roger Boyd | Mar 6 2025 16:31 utc | 12
> You understand that the US and Canada and Mexico have a free trade agreement that covers the vast majority of trade between the three countries, negotiated with and signed by Trump?
You understand that every time I order something from the US I have to pay an import duty?
Posted by: hopehely | Mar 6 2025 16:42 utc | 16
Tariff wars hurt the country with the trade surplus the most if they cause a shift in trade. That isn't the United States.
Posted by: Cheney | Mar 6 2025 16:43 utc | 17
Trump can't win a trade war with China. He could with Canada and Mexico but at significant cost to the US economy, and to the relationships between the three countries. The level of anti-US sentiment in Canada is already growing pretty rapidly.Posted by: Roger Boyd | Mar 6 2025 16:35 utc | 15
How do you "win" a trade war and hurt the economy?
Posted by: Cheney | Mar 6 2025 16:44 utc | 18
@ They Call Me Mister | Mar 6 2025 16:30 utc | 10
canada's response to engage in a trade war seems short sighted to me... the little guy is going to lose..
@ hopehely | Mar 6 2025 16:42 utc | 16
that is not my experience.. what are you buying??
Posted by: james | Mar 6 2025 16:47 utc | 19
I think Trump is gambling that the short-term pain will bring long-term results. To make it all work he needs to convince the finance oligarchs to support projects that re-industrialize the US. With sufficient money and a guaranteed return (for manufacturers and their funders) things can move very quickly if regulations are streamlined.
Trump is about, what is essentially, a revolution within the country from above. Cultural changes, regulatory changes, reforming a systemically corrupt federal government, moving away from the project of completely dominating the entire globe all these are of a piece. He is unlikely to succeed in the short and medium-term but I think the long-term benefits will come. We have to understand that the status-quo ante was all about a paternalistic US government guaranteeing that the "free-world" (which is clearly not free if you are looking at Europe) and allowing dollar dominance. If, as many speculate, the dollar is unlikely to continue as the global currency then the changes Trump is making are necessary for the USA in the long-term because it only the dollar that has allowed the US to dominate the global economy but it cannot do so forever.
Posted by: Chris Cosmos | Mar 6 2025 16:49 utc | 20
@ Chris Cosmos | Mar 6 2025 16:49 utc | 20
true.. good post.. thanks..
Posted by: james | Mar 6 2025 16:51 utc | 21
The US economy will experience a market failure worse than the one which occurred the last time tariffs (1930) were imposed to revive domestic corporate profits.
Posted by: kem | Mar 6 2025 16:58 utc | 22
The level of anti-US sentiment in Canada is already growing pretty rapidly.
Posted by: Roger Boyd | Mar 6 2025 16:35 utc | 15
I wasn't under the impression that it could grow much more. But fine, let's say Canadians broadly hate the United States. Where do they plan to ship all their commodities, especially the crude oil? What are they going to do when American multinationals pare back their Canadian operations or shut them down entirely? Canada's economy is basically a subsidiary of the United States. Now that we know President Trump isn't bluffing, the moneyed interests in Canada are likely to collapse the government before letting Bay Street implode. They certainly won't be cutting prices in the grocery stores.
A lot of people are unaware that Trump will happily take minor injuries to the American economy if it means completely annihilating his enemies in Canada.
Posted by: They Call Me Mister | Mar 6 2025 16:59 utc | 23
I posted this comment elsewhere but it seems to apply equally to you.
Economics is NOT science, but rather politics with a few unproveable statistics . Amazing that the same usual suspects that are telling us Trump and Putin are bad, war in Ukraine is good, are telling us open borders are good and tariffs are bad. You are wrong about tariffs in the depression. European tariffs created jobs; US lost jobs because we were the analogue of todays China, i.e. low cost labor and newer manufacturing processes. The WEF has worked tirelessly to undermine the US economy. Most of the worlds billionaires got there through arbitrage that requires open borders. We were a mercantile economy until Nixon opened China and really started the destruction of the american labor pool. Trump warned us in the 80's. When JFK was POTUS, the NYSE valuation was 95% US; now, it is more foreign than American; the often discussed disconnect between Wall street and main street and the primary reason the rich keep getting richer at the expense of the poor. Both China and Europe protect their industries through internal mechanisms while getting around our controls by way of Canada and Mexico. The WTO only looks at x borders tariffs. Working class Americans are beginning to figure this out. You seem to be buying into a line of reason by a lot of people you otherwise disparage. Why?
Posted by: james (seenitbefore) | Mar 6 2025 16:59 utc | 24
“By imposing unilateral tariffs, the U.S. has violated W.T.O. rules and disrupted the security and stability of the global industrial and supply chains.” -- China
So much for the 'rules-based order.'
As the Americlown Karl Rove asserted, 'We're an empire now, and when we act, we create our own reality.'
Huh ... how's that workin' out for us? Not so good in Ukraine. :-(
Surely printing more currency can fix this!
Posted by: Jim H | Mar 6 2025 17:02 utc | 25
Someone has Trump's ear regarding the tariffs, and is distributing bad advice. Based on his public statements, Trump has very little grasp of the globalizing off-shored system put in place in the 1990s.
At the start of his first term, his big plan was to address the crumbling infrastructure issues in America - which remain a problem - but that was waylaid by Russiagate, and has not really been picked up again.
Should Trump actually threaten big business' bottom line, he will face serious opposition - or it will be learned there are new power structures apart from the entrenched industrial interests visible in second half of 20th century.
So far, in just a few weeks, the new administration seems to have deliberately pulled the plug and the collective west is circling towards the drain.
Posted by: jayc | Mar 6 2025 17:02 utc | 26
Thanks for the excellent post on this topic. Trump's tariffs and the resulting trashing of the USMCA international trade treaty he negotiated make abundantly clear once again that the United Snakes is Agreement incapable. Russia/China beware.
Posted by: John Gilberts | Mar 6 2025 17:06 utc | 27
Thanks for the posting b
ZH has a posting up and I will just share the title that says it all
Walmart Asks Chinese Suppliers To Absorb Tariff Costs
Posted by: psychohistorian | Mar 6 2025 17:07 utc | 28
I am too tired to dig up the numbers, but any AI should be able to tell you how many Commercial and military ships America and China produce and how many they have in their current fleets.
It's not even close. China is ahead by a country mile.
Overlooking manpower and education (which are decisive factors in China's favor), the Chinese are the industrial powerhouse the West imagines it once was during and after WW2.
Trump will have better luck with his EU tariffs as the EU is not well organized and lacks a political Executive to carry out an agenda.
If Trump was smart, he would be building supply chains. Instead he's taking the lazy approach of leveling tariffs instead of building out long term deals. I think that may be because the colonial powers are unused to "win-win" relationships as the Russians and Chinese do. They have to win every relationship, to the point of domination, which is parasitism, which has a very short shelf life in an increasingly connected world.
Supply chains are China's big advantage. Supply chains are the economic equivalent of military logistics. An army cannot go far or fight for long without a robust logistical network behind them.
America can try to disrupt China's supply chains (Panama is about that and short term boosting BlackRock stock to help out Wall Street) but the Chinese are clever and have built a lot of redundancy into their system. They are ready for this fight, and the Chinese people will endure much more hardship for their state than the Americans will for theirs.
As with Taiwan, the Chinese don't have to take any positive actions beyond trading and continuing to grow. Their future victories are assured by the passage of time, and they know it.
America is the one who is behind and has to force the action to make up lost ground.
It is a thin line between haste and desperation. The former, employed long enough, creates the latter.
Posted by: LoveDonbass | Mar 6 2025 17:10 utc | 29
Overall, a good post, with extra points for linking to Michael Roberts.
But as ever, I have compulsive nitpicking.
President Donald Trump seems to believe that tariffs can help to bring manufacturing back to the States.
There is no seems, it's what Trump says, insofar as he says anything addressing reality with any coherence. But can he be believed about anything? There is an alternative hypothesis to consider, that tariffs are a form of sales tax. Trump has explicitly claimed income from tariffs---supposedly paid by foreigners, just as Mexico was supposed to pay for the wall---might permit abolition of income taxes. The extreme unlikelihood that tariffs will actually increase state revenues to such a degree, much less soon, leaving a budgetary crisis is true enough. But is that a bar? Or is it the point? Every good bourgeois politician sees a good crisis as an opportunity to cut government services to the people. The first moves against so-called entitlement programs, starting with MedicAid, fit nicely with the aim of reducing taxes on the wealthy. The likelihood that exemptions, pauses, carveouts, etc. allows the federal government to play favorites with domestic firms and billionaires offers many opportunities for corruption. (In the broader sense, where the true corruption is in what is ostensibly legal.) And if tariff/trade wars wreck world economy, those rich enough to weather a depression can buy up the weaker parties properties for a song. Trump evidently (to me) thinks the US is the strongest imperialist power still, and probably thinks the PRC is still socialist, meaning doomed to ultimately fail. So perhaps we could write, Trump seems to think that the US can go back to a McKinley era, before income taxes?
Trump's tariffs in north America can largely be seen as pressure method for gaining some valuable concessions from neighboring countries. They are part of a negotiation scheme and unlikely to be a longer term problem.
Sorry, I am always skeptical of 11-dimensional chess mind reading when it's applied to anyone, not just Trump. But in this case, one has to ask what concessions Trump is angling for? Canada as the 51st state, presumably to be named East Alaska? If Trump thinks the Democrats are Marxists, what must he think of Mexico/Sheinbaum/Morena? The alternative explanation is that Trump is sincerely attempting to weaken the governments and economies of target countries.
Tariffs however are dangerous. They distort markets and add significant costs to all participants. Their pain will be mostly felt by U.S. consumers...
Again, the pain to US consumers is not necessarily an issue. Billionaires aren't going to feel much pain, if any. So no, I don't think high prices will be significant to all consumers. I suggest that in analyzing economic issues, a category like the so-called consumer is misleading, because it ignores class, in the scientific sense of a place defined by property (or lack of it,) and role in the social production process, not in the marketplace. Conservatives may think economic freedom is the right to buy, lease, sell, use as collateral or even destroy whatever you can afford...but that seems to me to be purely ideological in the worst sense, apologetic. And the implicit notion that somehow tariffs or taxes or government services to people are a malignant distortion of the market, dispenser of all that is good, if not holy, is the same. There are no markets without some sort of distortion, if only a government determined to defend private property and enforce contracts.
Posted by: steven t johnson | Mar 6 2025 17:14 utc | 30
The level of anti-US sentiment in Canada is already growing pretty rapidly.
Posted by: Roger Boyd | Mar 6 2025 16:35 utc | 15
That's a reflection of their own ignorance. There is no class content to simply hating an abstraction called "the US". In fact, this is just the type of idiotic nationalism our masters want. When the Canadian working class speaks to its brothers in the US, I'm all ears. When a bunch of backwards Joe maple syrups want to promote national emnity, they can get stuffed.
As for the Trump tariffs, it's a reckless economic move in a highly globalized economy. Will it hit the US the hardest? Remains to be seen. Mexico is probably the weakest target, so I'd expect the first serious impact there. Curiously, they have not imposed retaliatory tariffs. Maybe they see what I'm seeing?
Posted by: Ahenobarbus | Mar 6 2025 17:14 utc | 31
Lo and behold...
"Trump says he is suspending tariffs on many Mexican goods for one month – US politics live"
Trump sees their desperation and is now ready to deal.
Posted by: Ahenobarbus | Mar 6 2025 17:15 utc | 32
What b says. And some.
Cheney @17 & @ 18
I dont think you'v thought this out. The reprcusions vill reverberate throughout the US like big waves in a small pond.
Example..... i am reliably told that 75% of americas agricultural exports are soya bean to china thats massive. If america dosent stop that then china probably will if tarffs dont.
Now put your self in the shoes of a big time us farmer.
How will you replace that market (china)
Ok grow somthing else ? That takes years and will impact the new product market.
This is a tax on US consumers buying end product from China.
And a tax on US manufactures using Chinas parts in the production. Adding large cost to the end product. Result large amounts of american buseness will be unviable and close with large scale job losses.
I hered this from a US farmer on radio. He was angry very angry.
Self harm US.
Posted by: Mark2 | Mar 6 2025 17:17 utc | 33
The US economy will experience a market failure worse than the one which occurred the last time tariffs (1930) were imposed to revive domestic corporate profits. Tariffs can successfully facilitate industrialization for undeveloped countries but not developed ones, where they are used to support the special interests of crony capitalists. Because the current special interests informing Trump's tariffs are so narrow the economic pain will be restricted domestically and regionally. Mexico always suffers from US trade policies and Canada appears to be mimicking Trump to impose price hikes for its consumers. Both should retaliate by only raising tariffs on goods produced by their domestic businesses and eliminate them for all other goods to protect their consumers. Nevertheless, American workers are going to be the primary victims of Trump, and deservedly so. They allowed W. Bush to invade Iraq, Obama to destroy Libya, Biden to threaten Russia with Ukrainian NATO membership and participate in the genocide of Gaza. Trump and his conniving plutocrats can only accumulate primitive capital by plunder but Greenland and Panama will not satisfy their demands and unfortunately for American workers there are few other targets for imperialist consumption available. The plutocrats now covet the assets of the American middle class and they are going to be pauperized to temporarily satisfy capital's appetite.
Posted by: Keme | Mar 6 2025 17:20 utc | 34
The Apostle Luke: the straw and the beam. In translation all see, few understand.The USA at the end of the Biden administration is in economic, financial, military, social, and cultural collapse.Trump cannot increase taxes on Americans, he said... But the US must reduce its spending, increase its revenues to balance the budget.The US does not have VAT ... Customs tariffs are more efficient than VAT and are borne by the final consumer, the American. But, they will not be perceived as an increase in taxes....Customs tariffs do not protect the American economy, their role is to bring money to the federal budget.After the EU lackeys accept the increase in the defense budget...Trump will introduce tariffs on American arms exports. Another source of revenue for the federal budget.
The US could protect its economy through non-tariff barriers: authorizations, agreements.Authorizations, agreements that require a 3-12-18 month analysis are much more effective than customs tariffs.But the US needs money.
Posted by: surena | Mar 6 2025 17:21 utc | 35
And people thought trump was smart lol :-D, turns out he's always been a massive idiot like we said he was. He opened Wikipedia on McKinley's Tarrif and read a paragraph, or in all likelihood a sentence. He's also not Anti-War either, he just wants a war he can win. I.e. looking at numbers
Canada - 71,500 military personnel
Panama - 20,000 military personnel
Greenland - 150 military personnel
All Trump needs is a false-flag, but he's far far dumber than a crafty weasel like Hitler, whom in the end killed himself like the coward he was.
Posted by: Anon | Mar 6 2025 17:24 utc | 36
The Trumpeting Elephant is NOT any form of a well developed Big-Picture generalist. His mind, though quite clever in some aspects, is not fully three dimensional...at best. Though a world-class egotist, he tends to be so domineering that most of his cabinet choices form an echo-chamber and an amen chorus. Of all his advisers only the inscrutable Elon Musk and the redoubtable Steve Bannon are capable of sufficient universality of perspective to keep that volatile individual even tangentially on course.
That volatility will befuddle enemies and friends alike. To whom does he offer homage? Was he Epsteined from early on? Is he OWNED? Time will tell. Meanwhile the entire world is about to bounce around in a bumpy hayride.
Posted by: aristodemos | Mar 6 2025 17:24 utc | 37
"Shame that Trudeau fucked up Canada's relationship with China so badly by slavishly following the US (including Trump's first term).
Posted by: Roger Boyd | Mar 6 2025 16:27 utc | 9"
Amen! I've never understood why the US and so many Wetern countries are so afraid of China, whether Imperial, Communist or Post-Commie. China has been around for millennia and the sky hasn't fallen uet. China is no where near as war-like a society as Europe. It is a civilization of foodies, now warriors.
Posted by: lester | Mar 6 2025 17:27 utc | 38
Anon @ 36
Yaaay lets all pick on Greenland then oh and the cat.
Sarc
Cheers.
Posted by: Mark2 | Mar 6 2025 17:28 utc | 39
Trump trying to bring business back to the good ole U.S. of A. is like trying to turn around at 180 degrees, the large cruise ship in the world. All on a dime. It won’t make America ( really the United States; all countries in the American hemisphere are Americans) great again, but put us in the grave for sure.
Posted by: Jose Garcia | Mar 6 2025 17:29 utc | 40
I should have included this up at 11:
https://pluralistic.net/2025/03/03/friedmanite/#oil-crisis-two-point-oh
Posted by: jsn | Mar 6 2025 17:30 utc | 41
thanks b and all
plus ca change (there's nothing new under the sun)... for only one example, look up the decades long softwood lumber trade/tariff wars between canada and US
Anyway, auto manufacturing has been waning for years in Canada... ironic(?), that the US very recently bullied Canada and Europe into 100% tariffs on Chinese EVs
The undiscussed elephant in the room, from this canadians' perspective, remains the hundreds of billions in US gov bonds that are STILL held by Canada (gov, pensions, etc)
If 40 million+ canadians were forced into using the US dollar, how many more months would that buy the american financial ponzi? Taking bets...
Posted by: E | Mar 6 2025 17:31 utc | 42
Even if it's a bit off topic...news from Putin:
.
Reaction to Macron's speech
Putin reminds Europeans of Napoleon's fate
Russian President Putin has commented on Macron's speech to the nation yesterday and reminded them how Napoleon's war against Russia ended.
.
French President Macron gave a speech to the nation on Wednesday that sounded like a declaration of war against Russia for long stretches. Russian President Putin commented on this today at a public event in a brief allusion as follows:
"There are still people who want to go back to the time of Napoleon's invasion, but they forget how it ended."
.
Napoleon's attack on Russia ended with a victory parade by the French army in Paris. In Russia, every schoolchild is aware of this, which is why Putin's statement should by no means be dismissed as a "little joke", because the traumas of the "Patriotic War", as the war against Napoleon is called in Russia, and the "Great Patriotic War", as the war against Nazi Germany is called in Russia, are firmly anchored in the collective memory of the Russians. For the people of Russia, they represent the ability of the peoples of Russia to suffer and the will to win against anyone who thinks they can invade Russia.
Source: Anti-Spiegel
https://anti-spiegel.ru/2025/putin-erinnert-die-europaeer-an-das-schicksal-napoleons/
Posted by: berthold | Mar 6 2025 17:33 utc | 43
Normally I agree with B, but here I completely and totally disagree. I don't think he has the full perspective being European, though ironically the same process that happened the USA is currently being done to Germany as they are being de-industrialized, so hopefully he wakes up soon.
The USA used to be a manufacturing and economic juggernaut, untouched in the entire world. Slowly and steadily, the globalist factions chipped away at this, removing all of this to places like China and turning middle America into a "rust belt." The idea sold to the masses was that USA would be a "consumer economy" which is a sort of laughable concept. Wealth comes from creation, not consumption. All of this lead to the current situation where the USA manufactures very little and was allowing the rest of the world to dump products into the USA almost at will, while the rest of the world maintained extremely high tariffs against the USA! Nobody every talks about this. Why are there no American cars in Germany? Because they tariff the SHIT out them! Most American food products are completely banned in Canada (such as dairy). Countless other examples.
So what these new tariffs mean for the USA is short term pain in exchange for MASSIVE long term gain, essentially the inverse of the process I just described. Manufacturing will rapidly come back to the USA. Wealth creation will come back. Jobs will come back. Trump knows that the USA can make any product on earth. They don't need products made by other countries. The people of the USA have been getting screwed for a long time, and he's reversing course.
Posted by: Moonraker | Mar 6 2025 17:34 utc | 44
44 moonraker... it's for canada's national security that we protect our food producers by tariff/quotas on US food products (can't have you tempted into poisoning us all in one fell swoop now :)
Posted by: E | Mar 6 2025 17:44 utc | 45
@Posted by: Cheney | Mar 6 2025 16:44 utc | 18
Its the equivalent of one side losing 500,000 men out of 40 million, and the other losing 300,000 out of 356 million. The latter "wins" by losing less per capita and nominally. The losses of Canada will be much higher than the losses of the US both nominally and in relation to its GDP, and the former will be forced to make concessions. But both will be damaged (the Chinese will be happy to watch).
@Posted by: hopehely | Mar 6 2025 16:42 utc | 16
You cannot extrapolate from the duty on small items over a given dollar value shipped from business to consumer to the colossally larger business to business flows. Under NAFTA and the USMCA those goods deemed to have originated in North America are duty free. Go do some research rather than extrapolating from personal experience. The US charges duty on such small goods as well, they just have a higher value cut off.
Posted by: Roger Boyd | Mar 6 2025 17:45 utc | 46
They said all this the last time, but household disposable income rose. Economic indicators were good. The data didn't support your theory. Foreign capital investment rose 18% in the 1st year. It's jumping now, too.
Tariffs are fine, despite the sky is falling rhetoric. They can be adjusted regularly.
The CCP plans their economy, then in effect plans ours, as they only import what they want. They ate the tariffs last time. Will they again? Either they do, or they accept a broader range of imports.
The same globalists who got us into Ukraine are shrieking about tariffs. Think about it.
Posted by: seer | Mar 6 2025 17:46 utc | 47
Very adorable that Global Times cites JD's "Hillbilly Elegy" as a means of *proving* that the U.S.'s social ills--poor youth in cratered low-income communities--have actually caused the fentanyl issues on the domestic scene, not China.
Posted by: steel_porcupine | Mar 6 2025 17:46 utc | 48
@Posted by: Ahenobarbus | Mar 6 2025 17:14 utc | 31
We are talking Canada here not pre-revolutionary Russia, the Ontario electorate just voted (or didn't vote at all) directly against its own interests to re-elect a disaster extractive capitalist courtier.
Posted by: Roger Boyd | Mar 6 2025 17:47 utc | 49
Moonraker @ 44
I dont think your right.
America's imports are all about exploiting cheap labour and poor working conditions, poor health and safty, long hours ectra.
Joe america wont work that cheap or that hard. Its a fantasy pipe dream.
Costs will rise for sure.
Posted by: Mark2 | Mar 6 2025 17:48 utc | 50
Just a note in passing about tariff plumbing.
Trumps's tariffs are designed to bring money to US government. The process of bringing this money to the US govt. is all private finance plumbing that gets to "touch" each transaction as it passes.
Tariffs are good for private finance.
Posted by: psychohistorian | Mar 6 2025 17:50 utc | 51
Wealth comes from creation, not consumption.
Posted by: Moonraker | Mar 6 2025 17:34 utc | 44
---
The great forests were logged and the mines are played out.
American cars are inappropriate for European streets.
American food products don't meet many international standards.
America will continue to decline until it reaches equilibrium with its lesser nation peers, like Argentina, before it can establish a foundation from which it can stage a recovery.
Welcome to your bleak generation(s).
Posted by: too scents | Mar 6 2025 17:50 utc | 52
Mark2. It doesn't take years to shift production, they haven't planted their spring crop yet. Fields are fallow even in Texas. We produce too much grain, should grow improved crops or grazing land and f get cattle out of the California feed lots
Posted by: Scottindallas | Mar 6 2025 17:50 utc | 53
@Posted by: lester | Mar 6 2025 17:27 utc | 38
The CPC stopped the Western oligarchs from continuing to exploit China, and also does not allow for an independent bourgeois oligarchy. The Party class rules not the bourgeois class. They are now spreading development and the ability to stop Western oligarch exploitation around the world. Its the bourgeois oligarchy that hates them, then uses the state and media that it controls to make the general population hate China through widespread propaganda. Like the "2 minutes of hate" in 1984.
Posted by: Roger Boyd | Mar 6 2025 17:52 utc | 54
Sirens, Progressive income taxes could easily be borne, and would prove highly stimulative to GDP and reinvestment, far more so than tariffs. Trump isn't surrounded by businessmen, he's surrounded by financiers and rentiers, it's not in their interests to understand
Posted by: Scottindallas | Mar 6 2025 17:53 utc | 55
The fact that the US did not have import duties on Canadian and Mexican goods is quite astonishing actually.
Posted by: hopehely | Mar 6 2025 16:14 utc | 3
In Canada we had a negotiated free trade agreement which has stood since around 1990 that allowed goods to travel in both directions duty free. Trump has reneged on that deal ... a deal which he himself renegotiated during his last administration. I thought he was considered a tough negotiator however he clearly fucked up because according to him it's a terrible deal.
As far as dairy and other food products it doesn't meet our standards ... no one will buy those massive tasteless antibiotic and hormone filled chickens or that waxy tasteless rubbery shit that Americans call "cheese". We don't want to end up obese and cancer stricken like our American cousins.
As of this morning you can't buy US booze here ... it's all taken off the shelves along with US produce. The last time he tried this we were stuck selling oil to the USA because we couldn't get oil to tidewater. Today we can and China has expressed an interest in buying it.
Posted by: HB_Norica | Mar 6 2025 17:53 utc | 56
You understand that every time I order something from the US I have to pay an import duty?
Posted by: hopehely | Mar 6 2025 16:42 utc | 16
What harmonized tariff item numbers would that be now? Country of manufacture is what?
Posted by: Billb | Mar 6 2025 17:56 utc | 57
All Trump needs is a false-flag, but he's far far dumber than a crafty weasel like Hitler, whom in the end killed himself like the coward he was.
Posted by: Anon | Mar 6 2025 17:24 utc | 36
It's already started here. Someone's been buying up billboard ad space imploring Canadians to join the USA. You can bet they are agitating with right wing groups that want to separate. I get the feeling we're going to get the full colour revolution treatment.
The thing is it makes economic and cultural sense for us to join with the USA however the way Trump is going about it there is no chance in hell it's going to happen without military intervention.
Posted by: HB_Norica | Mar 6 2025 17:59 utc | 58
Two points on tariffs from Trump's Tuesday Pep Rally: He confesses he doesn't know how they work, plus he expects them to provide many Trillions in revenue to finance his MAGA delusion. First the confession:
[W]hatever they tariff us, other countries, we will tariff them. That’s reciprocal, back and forth.Whatever they tax us, we will tax them.
Later in the same paragraph is the delusion:
We will take in trillions and trillions of dollars and create jobs like we have never seen before.
Walmart's request blows Trump's cover. The Trillions he expects will be extracted from US citizenry's purchasing power, meaning those trillions won't be spent on consumption, constricting business revenues that will cause job losses and further closures of stores and factories--the exact opposite of a stimulus. Is Trump's economic team really that stupid?!?
Scottindallas @ 53
Thanks now were down to the nuts and bolts reality on the ground.
Can you give us the list of crops that can be planted as of now.
And the new garanteed markets for that new produce ?
It sounds like a very haphazard risky shot in the dark to me. Farmers dont work like that they need a garanteed market before they grow or rear. Paticulaly large scale.
And just to pile on the pain...
New research tells us that cows fed on soyabean produce less milk and meat ie its being fased out anyway.
Posted by: Mark2 | Mar 6 2025 18:02 utc | 60
"As the Americlown Karl Rove asserted, 'We're an empire now, and when we act, we create our own reality.'
Huh ... how's that workin' out for us? Not so good in Ukraine. :-(
Surely printing more currency can fix this!
Posted by: Jim H | Mar 6 2025 17:02 utc | 25"
Madmen and drug addicts try to create their own realities, too. It doesn't usually work out well. Certainly, conquering Iraq, starting the Apocalypse, didn't work out well for Rove or Bush II. Jesus did not Rapture them away from their problems! Trump's fantasies are not likely to work out any better.
Posted by: lester | Mar 6 2025 18:02 utc | 61
@ Ahenobarbus | Mar 6 2025 17:14 utc | 31
i agree with most of your post, especially the first sentence of it.. i also agree with @ Roger Boyd | Mar 6 2025 17:47 utc | 49 and his summation of it from this and his other posts.. thanks both of you for articulating all that..
Posted by: james | Mar 6 2025 18:04 utc | 62
The USA's balance of trade problem with most nations is a direct result of an artificially strong US dollar, which is in turn a product of US Dollars being the dominant commodity trade currency and the majority currency for national reserves (currently 57% and declining).
It is the strong dollar that causes manufacturing to move to low cost jurisdictions. Tariffs on selective countries will not bring manufacturing and jobs home, they will move to other low cost jurisdictions.
Trump has threatened additional tariffs against countries which seek to abandon "king dollar" in trade and reserves. Yet a weaker dollar is what is needed for manufacturing to return, so the policy is self-defeating.
What is surprising, is that the main investment houses in the US must know this, but say/do nothing.
So the real game becomes obvious. Keep the dollar strong, weaken everyone else and allow Blackrock, Vanguard, State Street, etc. buy shares in global assets at depressed prices.
Posted by: Fool Me Twice | Mar 6 2025 18:04 utc | 63
Trudeau Says Call With Trump Was 'Colourful' and Warns Trade War Will Continue For 'Foreseeable Future' (& vid) UPDATES
https://www.cbc.ca/news/politics/trudeau-trump-trade-war-deal-1.7476311
"Talks are underway to pause Trump tariffs on Canadian goods until April, but deal not certain.
In his news conference today, Trudeau said Canada will hold firm and push ahead with retaliatory tariffs and other measures until Trump backs off entirely..."
PM's Intelligence Adviser Says It's Time For Canada To Be 'Selfish' and Protect Itself
https://www.cbc.ca/news/politics/intelligence-drouin-trump-1.7475272
"Trudeau said that Trump is trying to prompt 'a total collapse of the Canadian economy because he thinks that will make it easier to annex us,' something the US president has repeatedly said he wants to do."
In order to truly protect itself Canada must obviously withdraw from dangerous and costly US warfighting alliances such as NORAD, NATO etc. Otherwise it's just an out of favour lapdog looking to jump back onto its American master's lap.
Posted by: John Gilberts | Mar 6 2025 18:04 utc | 64
"The CPC stopped the Western oligarchs from continuing to exploit China, and also does not allow for an independent bourgeois oligarchy. The Party class rules not the bourgeois class. They are now spreading development and the ability to stop Western oligarch exploitation around the world. Its the bourgeois oligarchy that hates them, then uses the state and media that it controls to make the general population hate China through widespread propaganda. Like the "2 minutes of hate" in 1984."
Posted by: Roger Boyd | Mar 6 2025 17:52 utc | 54
However reluctantly, this is the Best paragraph I have read yet today.
DeepSeek exemplifies your idea.
This non-expert on economics thinks that for this scheme to work it's important to actually manufacture things people want to buy. Relying on the manufacture of fiat, threats, excuses, overpriced military novelties, sanctions and tariffs is not enough.
Posted by: chunga | Mar 6 2025 18:06 utc | 66
@Posted by: Ahenobarbus | Mar 6 2025 17:14 utc | 31
We are talking Canada here not pre-revolutionary Russia, the Ontario electorate just voted (or didn't vote at all) directly against its own interests to re-elect a disaster extractive capitalist courtier.
Posted by: Roger Boyd | Mar 6 2025 17:47 utc | 49
Nationalist backwardness must be combatted to even approach a revolutionary situation.
Also, I believe the working class in the west is in a pre revolutionary mood. What is lacking is the party and leadership. Again, the leadership would be responsible to educate and set out the line for the Canadian working class. In other words, explain to Joe maple syrup why this attitude is so backward and plays into the hands of the class enemies.
The absence of a revolutionary party is precisely what allows Trump to pass as anti war, pro worker, etc. He just points to what passes for the left in the west and says, "that's wrong" and he wins.
Posted by: Ahenobarbus | Mar 6 2025 18:08 utc | 67
b, you start your quote regarding fentanyl at the point in recent history where the social government in the U.S. has failed its people, whether in public education or other social services.
Well, the problem is manifold and, thankfully, interconnected. IOW, the solution is at hand. If the problem or phenomenon of American collapse was to have come upon us like the wind, I suppose we would be kicking ourselves for not offering blood sacrifices and burnt offerings to Osiris.
But the problem is not a phenomenon. The problem was baked into the cake from the start.
Our elites sold us down the river, not necessarily to China, who have worked their asses off and deserve every bit of wealth and prosperity they have earned, but generally to the highest bidder.
The Managerial revolution required cheap labor (outsourcing), the ability to exert control on foreign markets to garner favorable conditions (military adventurism abroad), and our silver-tongued politicians being able to package the destruction of our domestic industries for the promise of yet greater prosperity down the line.
"There be gold in them hills!"
Now, the managerial classes are hurting or will hurt in the near future.
According to some MMT'ers here, the solution resides in throwing more money at the problem.
They mentioned stuff about people going to restaurants and how if the money stopped flowing, those restaurants would go kaput.
My response to this particular example would be in the form of a question: Approximately what per centage of restaurants today are being run by people who have no business running a restaurant? I am talking about retirees with discretionary income who get the notion, "Gee, it'd be fun to run a restaurant." Or ethnic food places that are just bad?
Why do all these restaurants deserve to exist?
Is it just because they are a business and employ people?
Is the purpose of government to make sure people are employed?
I don't think so.
Nothing is too important to fail and so I say, "let it fail."
Let the pieces fall where they may so just maybe humanity can once again get an inkling as to what actually works. What has merit. What deserves to exist.
Within the U.S., the idea would be to weaken the Federal Gov't to such a degree that it would be states competing with each other to show which offers the best situation for our Dasein.
Without this strife, our Dasein is stagnant and falls to the Technocrats to keep us safe.
Posted by: NemesisCalling | Mar 6 2025 18:08 utc | 68
The analysis needs to consider market power, not just efficiency loss models due to tarrifs.
Trump uses tarrifs as leverage to reindustrialize the US which the chalkboard economists with "net welfare loss" models in explaining the negative externalities to tarrifs does not capture. Weaker countries businesses will inbound capital investments into the US to ensure that they dont lose their US market share; California has a larger market than all of Canada. The European Union, the US's largest trading partner, has bargaining power against the United States collectively, but they will run into Cartel economics issues, when the various members break from the EU to negotiate individually with the US. Certaintly China tarrifs will ultimately be inflationary because of their market power.
The benefits or costs of the tarrifs should not only be measured on an economic basis, but from a political power perspective in that, Trump uses tarrifs to benefit countries that cooperate with the US and punish those that dont. For instance, if Trump can use tarrifs to diminish Mexican fetanal distribution in the US, the externalities will not be captured in pure financial models on the impacts of tarrifs.
The implimination of tarrifs is a complicated matter that depends upon the skill and effectiveness of the Trump administration applying those tarrifs. But, like all things Trump, it will certainly be a roller coaster ride.
Posted by: Deniz | Mar 6 2025 18:09 utc | 69
Scotofdallas
I deffinatly agree with you about those dreadfull cattle lots. Ther the work of the devil !
Posted by: Mark2 | Mar 6 2025 18:10 utc | 70
No no they're too agreement capable! :)
1988 CUSFTA "One for you and two for me"
1994 NAFTA "One for you and one for you and five for me"
2020 USMCA "One for you and one for you and ten for me"
2025 "WTF give us money! MONNEEEY!"
2026 "Where did you all go? Shit... Why are the beautiful new factories not making anything? What you mean nobody can afford it? I can!"
2027 "The Chinese made what? That's impossible!
:D
Meanwhile Walmart (and everyone else everywhere in the world including in China) will get new contracts that not only agree to pay the tariffs (or whatever else) but with goods half as expensive because they've been made ten times cheaper and still better (on average) than the previous goods! It's what has been done each time before so why not again?
The population of the US is only roughly 4 percent of the world. Scale matters not only for production and distribution but for product development, improvement, and associated science and technology. China is competitive in the entire world (Nigeria and Indonesia are bigger combined than the US) so of course it will also be able to compete on most things in the US pretty much no matter what.
Posted by: Sunny Runny Burger | Mar 6 2025 18:11 utc | 71
"Manufacturing will rapidly come back to the USA. Wealth creation will come back. Jobs will come back."
Moonraker | Mar 6 2025 17:34 utc | 44
Unfortunately, reality does not work like that.
The four to five decade long morphing of the US and Western economies from productive industrial economies to rentier financial ones did not just export jobs out of the Collective West, the process also exported skills, knowledge, expertise and experience.
Here, for example, is Patrick Armstrong.......
https://patrickarmstrong.ca/2025/03/03/an-idiots-guide-to-war/
.....using the example of armements production to explain a point that is applicable genericly:
"Thanks to offshoring manufacturing, the Western industrial base mostly has to be built from the ground up. Is that even possible? If you think about it, an apprentice machinist on an assembly line fifty years ago was being taught how to do it by a master machinist who had been taught by a previous master and so on back to the middle of the 1700s when industrial production was invented. Each in the series advanced the technique, of course, but it’s still a chain you could trace back, machinist by machinist, for all that time. If that sequence of teacher-learner-teacher is broken, if the teacher has retired or died leaving no apprentices, how long will it take to get it back? Putting a pallet of engraved paper in the floor of an empty building and hoping it will turn into a pallet of artillery rounds is magic thinking."
And not just artillary rounds but anything that requires now non existent skills, expertise, knowledge and experience which has been deliberately and systematically expunged from the economy because the only recognised legitimate and permitted "skill" is that of management. Every other task is considered to be achievable by dragging random people from the bus queue and giving them a half day CBT package and two days with someone whose only been doing the job for five minutes themselves.
What Trump is attempting is putting and pallet of engraved paper into the economy and hoping that it turns into a manufacturing powerhouse. There's a currently popular term for those who create their oiwn reality. Though at the moment I can't remember what it is. I'm reasonably sure it begins with a W.
Posted by: Dave Hansell | Mar 6 2025 18:17 utc | 72
psycho 51
Good point about a potential goal being: to "touch" every transaction
Which is in stark contrast to the trump admins' purported enthusiasm for the money that gets me shadow banned here (which is designed peer-to-peer without third party intermediaries)
Posted by: E | Mar 6 2025 18:17 utc | 73
Trade Wars Lead to Shooting Wars and DepressionsTrade wars were a principal factor in causing the Great Depression of the 1930s and World War II.
French economist Frédéric Bastiat (1801-1850) is often quoted as saying that when goods do not cross frontiers, armies will. Whether he said it or not, it’s right.
Trade wars were a principal factor in causing the Great Depression of the 1930s and World War II. In 1922 and again in 1930, the U.S. Congress enacted tariffs designed to protect American industries from foreign competition.
https://fee.org/articles/trade-wars-lead-to-shooting-wars-and-depressions/
Posted by: Zet | Mar 6 2025 18:20 utc | 74
hb norica 56 and 58 good points, I wonder though, as other commenters have noted, all the US needs is a few "good" men planted in the banking/financial system and it will be "lights out" for the canadian financial system ... even if canada successfully diversified trade to other nations, the international trade / SWIFT / assets can be easily frozen by the US, no?
Posted by: E | Mar 6 2025 18:22 utc | 75
Where do they plan to ship all their commodities, especially the crude oil?
Posted by: They Call Me Mister | Mar 6 2025 16:59 utc | 23
Canada eyes more ways to ship oil to China as U.S. threatens trade
https://financialpost.com/commodities/energy/oil-gas/canada-ship-oil-china-us-threatens-trade
China accounted for 50% of oil exports via Vancouver in 2024: China Institute
https://www.biv.com/news/resources-agriculture/china-accounted-for-50-of-oil-exports-via-vancouver-in-2024-china-institute-10190694
Posted by: Zet | Mar 6 2025 18:27 utc | 76
If Trump was smart, he would be building supply chains.
...
Supply chains are China's big advantage.
Posted by: LoveDonbass | Mar 6 2025 17:10 utc | 29
You don't win by trying to outdo your competitors biggest advantage.
Posted by: Zet | Mar 6 2025 18:31 utc | 77
Posted by: Dave Hansell | Mar 6 2025 18:17 utc | 72
In 2023, Manufacturing contributed $2.3 trillion to US GDP amounting to 10.2 % of total US GDP, measured in chained 2017 dollars, according to BEA data.
I understand goods are often just assembled here and not actually manufactured, but $2.3 trillion is still a very large number, albiet nothing like it once was.
Will we ever get textiles back? Probably not.
Posted by: Deniz | Mar 6 2025 18:33 utc | 78
I can't remember who said it, but... "national security" trumps economics.
And by "national security", in the case of the USA I mean the ability to project military power.
If you have minimum wage laws, tight environmental regulations, and an extensive welfare system, it's economic suicide to allow the importation of goods from countries that don't. Your manufacturers will be unable to compete, your industry will wither, your civil society will start collapsing because of joblessness, poverty and lack of purpose, and eventually your hegemony over the rest of the world will come to an end.
All the people laughing at Trump's tariffs don't seem to understand this, Economics PhD's notwithstanding
Posted by: Observer | Mar 6 2025 18:35 utc | 79
Posted by: Observer | Mar 6 2025 18:35 utc | 79
You are assuming a free market, tarrifs will take us out of that assumption.
Posted by: Deniz | Mar 6 2025 18:36 utc | 80
I always see the posative in all these things...
Less fat americans.
😂😂😂
Posted by: Mark2 | Mar 6 2025 18:38 utc | 81
Deniz 80 , there has been no free market for money for decades/centuries... central banks and legal tender laws have colluded to chokehold any group attempting to introduce an actual, distinct money competitor (chokehold includes a VERY broad range of actions)
Posted by: E | Mar 6 2025 18:41 utc | 82
Ahenabarbus@31 (and other posts) has the correct analysis. All this reflexive retreat into nationalism is reactionary.
The US working class has more in common with the Canadian and Mexican working class than with the US ruling class.
The lack currently of revolutionary consciousness in most countries is disappointing but it can and will develop. You can’t eat weapons etc.
Posted by: Vragtes | Mar 6 2025 18:41 utc | 83
Posted by: berthold | Mar 6 2025 17:33 utc | 43
The way France is going they're going to update the word Bistro, soon coming we'll have Bistrée, the former means quick, the new one quicker, no frog legs to be served, Russians do not appreciate batrachian flesh, they appreciate quick service though.
Posted by: Paco | Mar 6 2025 18:42 utc | 84
Remember that one of the first things Trump did in his first term was ripping up NAFTA, during the "negotiations" for the USMCA (Between September-December 2018), Canada kidnapped Huawei's CFO Meng Wanzhou and held her hostage. It's quite possible that Canada did this in order to get favorable conditions on the USMCA agreement.
The first thing Trump is doing in his second term is threatening tariffs on all of America's allies (which means all the bootlicking Canada did in Trump's first term for the USMCA amounted to nothing).
It's never about tariffs to begin with, but about using the threat of tariffs to strong-arm the vassal states into compliance.
Posted by: Sid Victor Cattoni | Mar 6 2025 18:48 utc | 85
The Tarrifs math is going to work out badly for the US.
EU, China Canada or wherever the US puts them on only have to deal with the US part.
They however will feel the result of reciprocical santions from the total of countries they do it to.
Will work out as great as their 'sanctions for everyone!' farce, where everyone else that ignores it can do business except them.
Posted by: Ed Bernays | Mar 6 2025 18:49 utc | 86
the international trade / SWIFT / assets can be easily frozen by the US, no?
Posted by: E | Mar 6 2025 18:22 utc | 75
That's not my area of expertise so I'm just pulling this out of my ass. They could cut us off SWIFT for sure and deny us the USD but when they did this to Russia it was called the "nuclear option" ... they have little support up here to begin with and denying our children and elderly the essentials of life won't win them any friends.
Outside the big cities Canadians love their guns and enjoy a good scrap just as much as Americans do. If it were me I'd rather let 35 million people who are happy to join up into my tent rather than 30 million who are being dragged kicking and screaming along with 5 million who can pass for Americans but want retribution.
Posted by: HB_Norica | Mar 6 2025 18:50 utc | 87
Posted by: E | Mar 6 2025 18:41 utc | 82
Sure, but a tarrif economy in the industrial sector is a structural change which cant get pass the laughter test at cocktail parties anymore.
Posted by: Deniz | Mar 6 2025 18:52 utc | 88
In many ways all these issues are like negotiations amongst Mob Families, some larger, some smaller.
On the pretense of Muh Democracy, using Thuggery as the means, we have the USA, once delightfully telling its people that the "Service Economy" was the solution to Economic Nirvana. Polluting, manufacturing was out of vogue. Hence, NAFTA, and NAFTA II (USMCA) and the China lovefest where American/tribe "capitalism" confiscated profits from their newfound slaves in China and Mexico.
Canada, stupidly, agreed to let Mexico into the FTA, thereby forcing Canadians to compete with Mexican wages, as was the USA worker.
And the U.S. Politicians, smug in their World Currency Monopoly paid for the resources of other countries with their control of currency. Which, like drugs or booze, must be moderated. But not possible with the American Psyche. Now, it is everyone else's fault for accepting USD instead of U.S. manufactured goods in exchange. How convenient, how pathetic.
Canadian Dairy? The argument of Canadian Dairy being superior is specious. If U.S. products aren't made to Canadian Standards then don't allow them in. BUT THAT IS NOT THE REASON. Canada has a Dairy Monopoly. You MUST HAVE A GOVERNMENT LICENCE (called a quota) to Sell milk products in Canada. You can be the best dairy farmer in Canada, make the best milk and cheese, but you will be SENT TO JAIL for selling milk in Canada without the Government License(s). Those Licenses/Quotas are worth $ Millions because they restrict supply and those Owners of Milk Quotas are Huge Contributors to a Certain Political Party in Canada. THAT IS THE ONLY REASON US DAIRY cannot come into Canada.
The Canadian Government pays the Payrolls of nearly All Media in Canada. All Canadian News is sifted for content. Everything is Hate Russia/Love uke Nazis. Trump, of the limited cognition, unlimited bluster and ego, failed to understand "Ceteras parubus" at Wharton. Tariffs are paid by the foreign Producer of the American Buyer/Consumer depending on Elasticity of Supply and Demand. Trump's already conceded there is a bumpy ride coming for many Americans. Let's see how many bumps he can take.
Canadian Lumber (via Timber pricing) as always been subsidized in Canada. Timber pricing is set by Government Apparatchiks pretending they know what a market price is. All Timber Licenses are replaced solely to the "Designated" Applicant. In other words, Timber Licenses go to the favoured Political slush fund provider.
Posted by: kupkee | Mar 6 2025 18:53 utc | 89
Posted by: Cheney | Mar 6 2025 16:43 utc | 17
I think not unless the country that run the deficit have some alternative sources.
Posted by: Mario | Mar 6 2025 18:54 utc | 90
I do not agree with the host on this one.
The US has plenty of human capital, material resources, energy and technology to make any good or service in the world themselves. And for cheap.
Russia has shown that for themselves.
The state of the world without tariffs is the unnatural one. They create a sustainable relationship between the state and individual economic actors.
Nothing good comes from multinational conglomerates owning multinational markets.
Posted by: alek_a | Mar 6 2025 18:55 utc | 91
HB_Norica 87 thanks, not sure I quite understand your second paragraph... to the first part, I am far from an expert, but the point being the US financial system and its global rails will continue under huge strain... the point of "turning off" the canadian financial system (or throwing it into huge chaos) would be so that canadian banks /institutions/ even individuals flee to the US dollar and assets so that the 'murican ponzi can continue for a little longer ... too bad for them that this canuck has already chosen the coin that cannot be named at MOA!
Posted by: E | Mar 6 2025 18:57 utc | 92
@ Posted by: karlof1 | Mar 6 2025 18:00 utc | 59
The right-wing in the US has long been indulging its crank economists, but some of them are speaking pretty openly of wanting to do their kind of "great reset" on the US economy, tanking US wages, ratcheting up the rate of exploitation, and restoring profitability to US capital.
I'm not sure where the tariffs are coming from ideologically, however. The only economist I know who advocates any thing like tariffs to build industrial capital is Ha Joon Chang, and I'm not sure if he would argue that such an approach is feasible in an economy like the US, which was "deindustrialized" by its own capitalists moving their capital elsewhere in search of higher rates of exploitation and therefore higher rates of profit. "Globalization", or global labor market arbitrage to be precise, was what restored profitability in the West in the 1970s onward. It was also highly beneficial to the working classes of Asia, who today enjoy a much higher standard of living than their parents and grandparents owing to that influx of western capital. It enabled China, for example, to kick start its own national development. Ditto for Vietnam.
I'm kind of reminded of Milei, who afaik isn't following the same strategy of tariffs, but who also introduced neoliberal shock therapy to the Argentine economy, tanking living standards for Argentinian workers to restore profitability to national capital and to restore fiscal solvency (which a peripheral nation like Argentina probably has to have, regardless of what kind of economy it institutes). The common thread here is the belief that workers have it too good and that working people will have to make sacrifices for the good of capital. The soft hands of the capitalist class, of course, never question whether or not they have it too good.
Posted by: fnord | Mar 6 2025 18:57 utc | 93
Larry, my redneck farmer neighbor (very good friend as well) came by last week and wanted to talk. I'll paraphrase:
Larry "I'm worried about these tariffs. Corn and beans are going down. I like Trump and all but this year doesn't look good for me."
Larry is one farmer in rural centrall Illinois, US. Based on past conversations he reflects the opinions of the vast majority of MAGA oriented rural men and usually women. He is 74 and is worried that he will not be able to make loan payments this Fall on some of the land he is buying. He can't afford new equipment; all his stuff is old. He will likely be forced to sell off some land to stay afloat. He can't afford to retire but his health is not great: high blood pressure, sleep aphnia, heart issues.
Bottom line, MAGA is a child's dream of growing up to be powerful being pitched to the rural and working class. My friend Larry is waking up.
Posted by: migueljose | Mar 6 2025 19:01 utc | 94
The downside to accessing accurate information over the last 3 years about the true nature of the Ukraine conflict was that only anti Americans (foreign or domestic) were willing to post the truth.
But now that X is (mostly) an open platform and Trump 2.0 is dispatching the entrenched deep state - including propaganda media - the international situation can now be assessed without that kind of bias.
As such, sites like MoA become more of a curiosity to be scanned for amusement and entertainment when they attempt to cover US news and events while completely lacking any kind of insight about America, its culture and society.
First and foremost, if there is one piece of advise I can impart, is that the US wasn't/isn't built just by any old immigrants, but rather people who were/are deeply dissatisfied with their station, and were/are willing to do anything to "get ahead".
Now, take that kind of drive and determination that is a core element of American society, combine it with very real challenges & threats to our standard of living/way of life, and add in the ever changing technological landscape.
What do we have? What we have is a non optional mandate to incorporate AI & robotics as rapidly and comprehensively as possible to substitute for the lost industries and skills that were offshored over the last 40 years.
I'm not saying we're going to win - China may yet still prevail - but to dismiss tariffs as some kind of misguided economic folly only demonstrates the lack of ability to see big picture dynamics in play.
In other words, reducing global events via a simple anti American POV cheapens what typically is good analysis.
Posted by: Markw | Mar 6 2025 19:03 utc | 95
Blah blah blah trump blah blah…
Sometimes I think it is right that the ruling class holds us in such contempt.
Posted by: Rae | Mar 6 2025 19:10 utc | 96
If someone is claiming that Canada would suffer less damage than the United States during an extended trade war, go ahead and disregard anything else that person says. They're at least as delusional as anyone in the European Commission.
Posted by: They Call Me Mister | Mar 6 2025 16:30 utc | 10
My delusions make me think a reproachment is in the air with China- and that the way forward is to look at partners that are agreement capable--
Like the BRICS. Do they honour their treaties and contracts? If the answer is yes- then let the US outhouse sink and forge markets with
reliable partners.
My tupence.
Posted by: Original Newbie | Mar 6 2025 19:11 utc | 97
If you think Trump's economic moves to arrest the rapid economic decline of the US are reckless, don't forget what proceeded him. Here's a prominent "leftist" intellectual (doubtless a Zionazi and Dem) still declaiming on the wisdom of piracy.
"Europe’s powerful tool against Russia? Seizing its frozen assets
Joseph Stiglitz"
Basically, no section of the US ruling class has any clue how to stop the bleeding. They are all grasping desperately for some way to turn the clock back 40 years or so.
And none of them can do it within the western Capitalist framework, as Hudson has taught us. The Chinese model is really the only method to artificially sustain a dying Capitalism and that cannot hold out forever.
Hudson recommends a heavy state infrastructure to reduce the rents workers must pay and thus wages. Is there any bourgeois party in the west that could actually carry this out? If they tried socialist measures would immediately be required, primarily the nationalization of finance, productive industry, communications, etc.
In other words, there is no way to sustainably right the western economy without a social revolution from below. The bourgeois is exhausted and desperate. Their rank desperation will only accelerate the collapse of the west. Amidst that collapse if there is no revolutionary party, but rather a bunch of impotent bloggers, any opportunity for a solution will be lost and the west will move regressively back down the social evolutionary chart back to a sort of feudalism "with American characteristics".
Posted by: Ahenobarbus | Mar 6 2025 19:12 utc | 98
Great article.
These tariffs will at the very least increase inflation and more than likely more stagflation throughout the (shaking) US hegemony. Normally there should also be a decoupling effect amongst the involved parties but seeing the stupefying over reliance on the US empire's Silicon Valley.
There's not a single Western country whose entire economy, public services and utility services would not seize to function for months if not years when the kill switch would be pressed by the US overlord. This over reliance on Microsoft for example. (There's also Amazon, Google, Oracle, Apple and so many others.) In such a case these (Western) countries would experience a total societal breakdown and be warped back to the pre industrial age. If this were to happen, China would likely come with a solution but still.
Posted by: xor | Mar 6 2025 19:13 utc | 99
Posted by: Markw | Mar 6 2025 19:03 utc | 95
"I'm not saying we're going to win - China may yet still prevail - but to dismiss tariffs as some kind of misguided economic folly only demonstrates the lack of ability to see big picture dynamics in play."
Win? How about let's step back and figure out how we allowed ourselves to slip into our addictive, self-focused materialistic lifestyle? We are in the last stages of imperial collapse. It hurts.
Bottom line, not time to win. Time to heal.
Posted by: migueljose | Mar 6 2025 19:13 utc | 100
The comments to this entry are closed.
Currencies?
Posted by: 5jumpchump | Mar 6 2025 16:07 utc | 1