The latest tariff barrage wasn’t just another trade fight. It may become the moment Canada finally stopped treating the United States as its only economic future.
You know Fred, one of the many reasons for imposing this new round of tariffs is that the Argentinian and Spanish football players showed more respect to Claudia Sheinbaum and Mark Carney than they did to the fragile, ego sensitive leader of the US. ( I refuse to call him a President). It is just one more example of his fragile, infantile behaviour. Canada is best to leave him and his cronies in the rearview mirror. We have to remember that he is but the expression of something that has been dormant for many years. Once he is gone, there will be no magical rebirth of cooperation between out two nations. A reestablishment of cooperation and, most importantly, trust, will take years, if not decades to establish.
I can't get my head around the fact that the strumpet wants to punish us by making everything more expensive for citizens of the USA. Mathew Moron, the Ambassador Bridge guy, is opening a cement business in Canada. Good! Let's put a tariff on cement. The NHL has 25 US teams and 7 Canadian teams. Good! Let's put a tariff on hockey sticks!
And on it goes. He still hasn't figured out that the people of HIS country pay the tariffs! We may sell fewer, but for many commodities we're just selling the difference to someone else. Which leads to the big gun items.
We don't need another pipeline to sell more oil; we need oil to sell to someone else. We're electrifying Canada for development, but there might not be any left over for sale outside Canada. Today the Premiers signed off on an interprovial accord to sell alcohol to each other. We don't need U.S. booze. We're developing Churchill to sell potash from Sask overseas. A competitive market makes for better pricing. The world is hungry for critical minerals and we have them. We are developing the output ourselves and not just selling raw ore.
We may need the USA right now, but not forever, and maybe not for long!
I completely agree. Nothing about this latest tariff makes sense but Tariff Trump is still trying to figure out how to replace the huge tax cuts for his billionaire buddies. Place tariffs on consumer products so US consumers pay for his billionaire buddies tax relief.
Tariffs don't magically create money... they raise costs that are largely paid by American businesses and consumers.
Canada still feels the disruption, but that's also why we're seeing such a strong push to diversify our markets and become less dependent on one customer.
Trump's "strategy" (world-wide) is that he counts/believes that by raising the cost of an imported product, two things may happen (if not both):
- the domestic price raises so much that it becomes viable for local manufacturing -- which leads to American employment (and yes, the product is more expensive in this case, but at least there's local jobs . . . . .)
- The exporting country is 1000% dependent upon their US customer, right? So somehow, countries (like Canada) will reduce the price of the product so that once the US tariff gets added on, the new price = old price (and this is how Trump thinks "the exporting country pays the tariff" -- they eat it by lowering the price, then Trump collects it from the Americans, but they end up with the same price as before).
So while the second item is what he secretly wishes, the logic breaks down with the first assumption in it -- that the other country is 1000% dependent on USA, and there is no possible way they could sell to other countries in any meaningful way.
And, of course, that's what Canada is trying to pivot towards -- with more progress so far than I had expected at this stage, but also with considerable more to do (we're still something like 80% dependent on them - we can't just not-trade with them, as much as we would like. But every year, it will get easier and easier. This is why they are being so hard-nosed with their CUSMA-related negotiation strategies now, because next year, it will be harder for them to exert influence. And the year after, even harder still.
Anyway, this is why he's punishing his own people (and somewhat getting away with it, though I don't know for how much longer).
What I. d like a better fix on is what s in that 80% and how sacred is it? How much will chafe but not kill us? Has anyone broken down what thise ties are and what cost if we lose them? Can we redce that dependence to 60? 40? what s the point at which we re swimming fine on our own?
This gets hard to slice nicely, but here's some very sky-high level aspects, of Canada exports to USA / Canada imports from USA -- and realize that for some sectors, that's almost impossible to distinguish cleanly (automotive, for example, with Mexico thrown is a well and products crossing borders a zillion times, you just have to almost say "how big is this sector, in general" and just realize it would be significantly impacted.
If you want the cleanest “who is dependent on whom” picture, the two most useful national summary numbers are:
72% of Canadian exports go to the U.S.
62% of Canadian imports come from the U.S.
(2024 figures, at present)
Then the sector table shows where the dependence is concentrated: energy, autos, machinery, metals, and some consumer goods. This is quick 2024 information, and note that "auto" is really questionable, as it's including lots of back/forth in all cases (hard to pin down to a literal value of just raw Canadian value added)
Sector Exports_USA_C$b Imports_USA_C$b
Energy 81.5 32.0
Auto 79.9 41.0
Consumer 14.4 53.4
Metals 11.3 8.4
Forestry 10.9 8.1
Machinery 42.0 30.2
Chemicals 53.0 11.4
Services 14.6 30.2
Source: StatsCanada, according to my favourite AI tool (Perplexity, using Claude's research tools).
These numbers, I think, would have changed in 2025. Metals, for example, started to pivot elsewhere due to the 25% tariffs. And I'm not even sure how to guess how Auto was impacted. And with TMX ramping up big time over the past year to sell oil elsewhere . . . .
But I'm really hoping that we start to see values change by the end of 2026.
% of GDP would be nice, for all of this, but I'm still working on trying to get a nice snapshot of it from that angle.
Honestly even though I should technically worry I can’t even take this new round of tariffs seriously simply for the fact that they’re based around the premise that these idiots don’t understand how Mother Nature works
UhOh. I just commented on your more recent epistle, to the effect what if we Canadians stopped buying but of course you re ahead of me. I can see it happening. The orangeman may have jumped the shark. Or is about to do so. Then what? How fast can we muster those alternatives? How fast can we change? I bet we can do it as fast as we need to and the pols can just try to keep up.
Yes there will be carnage, it will pinch and tug and realign. We ll have to make some unpopular decisions as we already are because the threat is worse. But with luck we ll be reborn. And the guys to the south will take decades to recover what they ve thrown away. If they even can. I m betting on balkanization. The states will no longer be united. And what if we could recover some of that, oh I dont know maybe Diefenbaker and Pearson quality to our Canadianness. That sense of open possibility and we ll lean to the positive?
I was thinking as I read about NATO spending, that Canada is no spending its increase in the USA. We can safely assume that one of the reasons for the American push for more military spending was that they would receive most of the money in their military hardware. Our move to equipment from other countries runs counter to their plans. You can see this in their threats about not using their fighter jets and they’re increasing flyovers over Canada.
You know Fred, one of the many reasons for imposing this new round of tariffs is that the Argentinian and Spanish football players showed more respect to Claudia Sheinbaum and Mark Carney than they did to the fragile, ego sensitive leader of the US. ( I refuse to call him a President). It is just one more example of his fragile, infantile behaviour. Canada is best to leave him and his cronies in the rearview mirror. We have to remember that he is but the expression of something that has been dormant for many years. Once he is gone, there will be no magical rebirth of cooperation between out two nations. A reestablishment of cooperation and, most importantly, trust, will take years, if not decades to establish.
Ron, I think that's the bigger issue too.
Tariffs can be negotiated away.
Lost trust takes much longer to rebuild.
Canada isn't just reacting to one administration anymore... it's adjusting to the possibility that unpredictability has become part of the system.
That's a lesson businesses and countries don't ignore very easily.
I can't get my head around the fact that the strumpet wants to punish us by making everything more expensive for citizens of the USA. Mathew Moron, the Ambassador Bridge guy, is opening a cement business in Canada. Good! Let's put a tariff on cement. The NHL has 25 US teams and 7 Canadian teams. Good! Let's put a tariff on hockey sticks!
And on it goes. He still hasn't figured out that the people of HIS country pay the tariffs! We may sell fewer, but for many commodities we're just selling the difference to someone else. Which leads to the big gun items.
We don't need another pipeline to sell more oil; we need oil to sell to someone else. We're electrifying Canada for development, but there might not be any left over for sale outside Canada. Today the Premiers signed off on an interprovial accord to sell alcohol to each other. We don't need U.S. booze. We're developing Churchill to sell potash from Sask overseas. A competitive market makes for better pricing. The world is hungry for critical minerals and we have them. We are developing the output ourselves and not just selling raw ore.
We may need the USA right now, but not forever, and maybe not for long!
I completely agree. Nothing about this latest tariff makes sense but Tariff Trump is still trying to figure out how to replace the huge tax cuts for his billionaire buddies. Place tariffs on consumer products so US consumers pay for his billionaire buddies tax relief.
Nothing that lunatic gangster does makes sense. Absolutely nothing.
Kathleen, that's the irony.
Tariffs don't magically create money... they raise costs that are largely paid by American businesses and consumers.
Canada still feels the disruption, but that's also why we're seeing such a strong push to diversify our markets and become less dependent on one customer.
Trump's "strategy" (world-wide) is that he counts/believes that by raising the cost of an imported product, two things may happen (if not both):
- the domestic price raises so much that it becomes viable for local manufacturing -- which leads to American employment (and yes, the product is more expensive in this case, but at least there's local jobs . . . . .)
- The exporting country is 1000% dependent upon their US customer, right? So somehow, countries (like Canada) will reduce the price of the product so that once the US tariff gets added on, the new price = old price (and this is how Trump thinks "the exporting country pays the tariff" -- they eat it by lowering the price, then Trump collects it from the Americans, but they end up with the same price as before).
So while the second item is what he secretly wishes, the logic breaks down with the first assumption in it -- that the other country is 1000% dependent on USA, and there is no possible way they could sell to other countries in any meaningful way.
And, of course, that's what Canada is trying to pivot towards -- with more progress so far than I had expected at this stage, but also with considerable more to do (we're still something like 80% dependent on them - we can't just not-trade with them, as much as we would like. But every year, it will get easier and easier. This is why they are being so hard-nosed with their CUSMA-related negotiation strategies now, because next year, it will be harder for them to exert influence. And the year after, even harder still.
Anyway, this is why he's punishing his own people (and somewhat getting away with it, though I don't know for how much longer).
Grant, I think you've nailed the assumption behind the strategy.
Tariffs have a lot more leverage when your customer has nowhere else to go.
Canada's challenge now is to keep building those alternatives.
Every new export market doesn't just create sales... it reduces someone else's leverage over us.
What I. d like a better fix on is what s in that 80% and how sacred is it? How much will chafe but not kill us? Has anyone broken down what thise ties are and what cost if we lose them? Can we redce that dependence to 60? 40? what s the point at which we re swimming fine on our own?
This gets hard to slice nicely, but here's some very sky-high level aspects, of Canada exports to USA / Canada imports from USA -- and realize that for some sectors, that's almost impossible to distinguish cleanly (automotive, for example, with Mexico thrown is a well and products crossing borders a zillion times, you just have to almost say "how big is this sector, in general" and just realize it would be significantly impacted.
If you want the cleanest “who is dependent on whom” picture, the two most useful national summary numbers are:
72% of Canadian exports go to the U.S.
62% of Canadian imports come from the U.S.
(2024 figures, at present)
Then the sector table shows where the dependence is concentrated: energy, autos, machinery, metals, and some consumer goods. This is quick 2024 information, and note that "auto" is really questionable, as it's including lots of back/forth in all cases (hard to pin down to a literal value of just raw Canadian value added)
Sector Exports_USA_C$b Imports_USA_C$b
Energy 81.5 32.0
Auto 79.9 41.0
Consumer 14.4 53.4
Metals 11.3 8.4
Forestry 10.9 8.1
Machinery 42.0 30.2
Chemicals 53.0 11.4
Services 14.6 30.2
Source: StatsCanada, according to my favourite AI tool (Perplexity, using Claude's research tools).
These numbers, I think, would have changed in 2025. Metals, for example, started to pivot elsewhere due to the 25% tariffs. And I'm not even sure how to guess how Auto was impacted. And with TMX ramping up big time over the past year to sell oil elsewhere . . . .
But I'm really hoping that we start to see values change by the end of 2026.
% of GDP would be nice, for all of this, but I'm still working on trying to get a nice snapshot of it from that angle.
Grant, thanks for digging into the numbers.
They really show both sides of the story... we're still heavily tied to the U.S., but the trend is what matters.
If those percentages keep moving lower over the next few years, Canada will be negotiating from a much stronger position than it has in decades.
Jim, I think that's exactly why Canada is moving so aggressively to diversify.
No country wants to depend on a customer whose rules can change overnight.
The more markets we develop, the more choices we have... and choices are where real leverage comes from.
Honestly even though I should technically worry I can’t even take this new round of tariffs seriously simply for the fact that they’re based around the premise that these idiots don’t understand how Mother Nature works
Kyle, that probably explains why so many people struggled to take the justification seriously.
You can negotiate trade policy.
You can't negotiate with the weather.
Meanwhile, Canada just keeps doing what it should have been doing all along... building more options.
Great explanation Fred, thank you!
UhOh. I just commented on your more recent epistle, to the effect what if we Canadians stopped buying but of course you re ahead of me. I can see it happening. The orangeman may have jumped the shark. Or is about to do so. Then what? How fast can we muster those alternatives? How fast can we change? I bet we can do it as fast as we need to and the pols can just try to keep up.
Yes there will be carnage, it will pinch and tug and realign. We ll have to make some unpopular decisions as we already are because the threat is worse. But with luck we ll be reborn. And the guys to the south will take decades to recover what they ve thrown away. If they even can. I m betting on balkanization. The states will no longer be united. And what if we could recover some of that, oh I dont know maybe Diefenbaker and Pearson quality to our Canadianness. That sense of open possibility and we ll lean to the positive?
Bev, I think that's the choice in front of us.
Change because we want to, or change because circumstances force us to.
It won't be painless, but Canada has reinvented itself before.
My hope is that when we come out the other side, we're more self-reliant, more diversified, and a little more confident in who we are.
I was thinking as I read about NATO spending, that Canada is no spending its increase in the USA. We can safely assume that one of the reasons for the American push for more military spending was that they would receive most of the money in their military hardware. Our move to equipment from other countries runs counter to their plans. You can see this in their threats about not using their fighter jets and they’re increasing flyovers over Canada.