Trump 2.0

Trump backed down from his 25% tariff on Mexico, for a month, supposedly, after speaking with Claudia Sheinbaum and getting her to promise to send 10,000 national guard members to the border.  Claudia added that the US promised to “work to avoid the trafficking of high-powered weapons to Mexico.”  This will be merchandized and propagandized by his state media outlets as another application of the art of the deal, but obviously tariffs on Mexican goods would be a stupid way to raise the price of produce almost immediately.  Threaten something that’s a total lose/lose, get an apparent concession that is one that’s been given before  (15,000 national guard in 2019) under much less duress, and tee it up for another dramatic moment next month — that’s the “strategy” here, and it’s stupid and damaging to relationships with our two best allies.

Robert Farley at LGM has a good piece that reviews Mexico’s odd status as a relatively wealthy country with a big population and a tiny army, all because they’re overshadowed by the US.

Justin Trudeau is going to talk with Trump this afternoon, but unlike Claudia Sheinbaum, who had “Plan B” ready to go but didn’t really go into details, the Canadians are all in.  This piece from the CBC details all the different responses from the national government and the provincial governments.

What Trump wanted from Mexico was border security and repatriation, two things they were more-or-less doing, and that they don’t really have to bend the knee too much to provide.  Trump wants to annex Canada.  His 51st state rhetoric has clearly pissed the Canadians off, and since there’s really no concession for the Canadians to give (since the whole Fentanyl pretext was a lie), I wonder how Justin is going to play this.  There’s also the politics of the Liberals getting a huge boost in the elections by being tough on Trump, and the Tories looking like idiots for embracing Trump.

Short-term, Canada holds a big card here that hasn’t been well-reported.  Trump intentionally only put a 10% tariff on Canadian oil, and the reason is that Canada is the main supplier of the kind of oil that US refineries can refine, heavy oil.  This piece is well worth a read on that topic:  the bottom line is that we’re a huge oil producer and exporter, but our refineries can’t refine the oil that comes out of the ground here.  We’re very reliant on Canadian oil.

That all said, Trump’s weak position on tariffs gives him a huge incentive to back down and make chicken shit look like chicken salad.

Nothing By Force, Everything by Reason and RightPost + Comments (102)

Here’s the CBC video of Trudeau’s statement about tariffs last night.  I’m including Claudia Sheinbaum’s statement at the end of this post, under the break, so you don’t have to go to Twitter to read it.

We’re living in a faster, faster disaster time, so the amount of goodwill that was just destroyed between the US and our closest neighbors is hard to digest. Shortly after 9/11, I had to take a business trip to Toronto. One of the Canadian newspapers had printed a large American flag in one edition. I saw many of those flags taped to windows in Canadian houses. Canadians fought and died for US interests after 9/11. Trudeau’s sadness in the statement is genuine, and I think it reflects a non-partisan strain of Canadian pain over a betrayal that will take time to heal, if it ever does.

Still, don’t miss the hard-edged part of Trudeau’s statement, where he encourages Canadians to buy more Canadian goods, and to cancel planned vacations in the US and travel in Canada instead. These are not the words of someone expecting this to blow over quickly. Playtime is over.

Similarly, Claudia’s statement is blunt, especially when it blames the US for the fentanyl problem, which is the flimsy pretext Trump used to get around the successor of NAFTA, the USMCA. She also demands “above all, respect for sovereignty, which is not negotiable. Coordination, yes; subordination, no.”

To me, this is the root of the whole issue: sovereignty. Trump’s latest lie on Lie Social ends like this: “Canada should become our Cherished 51st State. Much lower taxes, and far better military protection for the people of Canada — AND NO TARIFFS!”

This is such basic politics that it’s astonishing that I need to write this: Most people love their country (and I would argue that Mexicans and Canadians really love their countries — there’s a lot to love!) People will eat fucking beans and rice three times a day, drive a beater wreck of a car, take a pay cut and hunker down if their country is engaged in a righteous war. A recession is, really, nothing, in the face of this kind of obvious bullying. Claudia gets it, Justin gets it, BC Premier David Eby gets it, Ontario Premier Doug Ford gets it.

The person who doesn’t get it is Trump. He and Elon are looting the place while ginning up crisis after crisis in hopes that a media-starved public won’t catch on until it’s too late. They believe that their resentful red state base will believe all the lies Fox tells them about who’s really responsible for the coming shitshow. All I can say to that is: we’ll see.

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Looking More Closely at Justin and Claudia’s StatementsPost + Comments (50)

All indicators are that Trump is going to impose 25% tariffs on Canada and Mexico today. The chaos is part of the whole experience.

Anyway, a couple of interesting reads on this. First, the Bank of Canada has an article on the impact of tariffs, including the diagram above. Key points are that both countries will take a hit to GDP, inflation will probably grow, demand for products will fall, and unemployment will grow (due to loss of jobs due to lack of demand).

Here’s Mexico’s take:

Economy Minister Marcelo Ebrard reiterated that tariffs on Mexican exports would have an adverse impact on consumers in the United States.

“You have to take into account … that Mexico is the main exporter [to the United States] of final goods such as cars, computers, televisions and refrigerators,” he told Sheinbaum’s press conference.

“… United States consumers would be affected” by the tariffs, Ebrard said.

“In first place because prices will be higher. The price of all those products will rise 25%,” he said.

Ebrard also said that a 25% tariff on Mexican exports would diminish the availability of Mexican-made (or grown) products in the United States, and that the duty could cause supply chain problems in a range of sectors including the auto industry.

The “main impact,” he stressed, is that “millions of families in the United States will have to pay 25% more” for a wide range of products including Mexican fruit, vegetables, meat and beer.

One of the reasons I bought a new truck at the end of last year was I was expecting Trump tariffs to add thousands to the cost of a vehicle. Well, here we are.

Chaos Boy and the TariffsPost + Comments (106)