Trump’s Tariffs – 10 Insights On Their Effectiveness and the Response From Canada

Trump’s “Art of the Deal” Style of International Negotiations Not Working! Here’s Why

• Trump is utterly convinced that his experience in a closely held real estate company has prepared him to run a nation, and therefore he rejects the advice of people who spent entire careers studying the nuances of international negotiations and diplomacy.
• The leaders on the other side of the table, however, look at Trump and, given his very limited tool chest and his blindly distributive understanding of negotiation (defined in the article), they know exactly what he is going to do and exactly how to respond to it.
• From a professional negotiation point of view, Trump isn’t even bringing checkers to a chess match. He’s bringing a quarter that he insists of flipping for heads or tails, while everybody else is studying the chess board to decide whether its better to open with Najdorf or Grünfeld…..Continue reading

History Doesn’t Repeat, But It Often Rhymes and the Consequences Of These Tariffs Will Likely Echo the McKinley Era Tariffs

• More than a century ago, then-Representative William McKinley pursued an aggressive tariff strategy that sought to protect American industry and reduce reliance on foreign imports…The logic was simple: If foreign goods were more expensive, Americans would buy domestic products, fueling economic expansion but the results were not so simple.

• Instead of strengthening America’s trade position, the tariff triggered retaliation from other nations. Prices rose, particularly for middle- and lower-income Americans, and political backlash followed. In the 1890 midterm elections, voters revolted: McKinley lost his seat, and Democrats took control of the House.

• At the time, some Republicans dreamed of annexing Canada, believing that the economic pressure would push Canadians to seek statehood. Instead, the tariff had the opposite effect—Canadian nationalists rallied against what they saw as economic coercion. The country deepened its ties with the British Empire, reinforcing the very trade barriers the U.S. sought to disrupt. Sound familiar? Continue reading….

• Canada has for decades irked U.S. lawmakers with “supply management” policies that support Canadian farmers and protect its dairy, egg and poultry industries from foreign competition and function as major trade barriers above zero-tariff quota maximums to prevent the dumping of such products into the Canadian marketplace.
• So what are zero-tariff quota maximums and how do they affect trade between Canada and the U.S?…Continue reading

• Trump has imposed a 25% tariffs on imported aluminum but more than half of U.S. aluminum imports come from Canada (see specifics here) yet Trump argues that these imports aren’t needed and as the U.S. could ramp up production to offset them. Given the sheer volume we’re talking about here — the U.S. imported 75% of its domestic aluminum demand last year, according to official data — that doesn’t seem plausible.
• Unless there’s a decommissioned smelter hiding somewhere at Mar-A-Lago the U.S. needs Canadian aluminum – period!

• The Canadian tariffs of 25 per cent target $30 billion in U.S. goods designed to target products with a high impact on American stakeholders, but with impacts that can be mitigated on this side of the border,
• The tariffs impact products including food and drink, clothing, cosmetics, home wares, furniture and appliances, tobacco, lumber, paper and more. Motorcycles, car parts and precious metals also make an appearance on the full list, which identifies more than 1,250 individual tariff items. Here‘s the full list.

• Canada is the top import partner for 23 U.S. states (see list here) and these states will be the hardest hit as the increased cost of the Canadian imports will result in the imported goods going up in price to the extent that the 25% duties are not absorbed by the importer. So much for Donnie’s campaign promise that, if elected, he would reduce the price of groceries, in particular, and the cost of living for the average American, in general!
• Canadians consider themselves to be at war with the U.S. – economically speaking – and are standing up for Canada. “Buy Canadian” has become the mantra and that is just the beginning if the U.S. administration does not back down from being a bully and continues to apply unjustified tariffs on Canada.

• A new analysis by the Anderson Economic Group estimates that a 25% tariff on America’s neighbors would increase the cost of a full-size SUV assembled in North America by $9,000 and a pickup truck by $8,000. and the cost of an electric-vehicle cross-over would increase by $12,200.
• Why so? Because of the compounding effects of tariffs on auto parts that sometimes cross the border multiple times. Read full article here.

• Until Trump imposed a 25% tariff on imports Canada was the largest importer of American alcohol in the world ($271 million in distilled spirit, $507 million in wine and $83 million in beer products totally $861 million in 2022) from a total of 35 states – but not any more. In retaliation, Canada’s 10 provinces have removed all 3600 U.S. alcohol products from its store shelves and stated it will not be restocking its shelves, or replenishing its inventories in its provincially-operated stores until the U.S. withdraws its tariffs. Continue reading here.

• President Donald Trump has suggested more than once that Canada become the “51st state” and the graphic in this article (see here) compares various educational, crime, and economic statistics for each U.S. state and Canada.