Canada has taken in almost $300 million from retaliatory tariffs on U.S. imports – September 11, 2018
Apparently Donald Trump is a Republican, however, the use of tariffs or a tax on foreign labor is more of Union, Liberal Leftist position. This is not an issue Canadians want to brag about, because the reality is this tariff issue may very well be embraced by the Democratic party in the United States. What Trump has done in America is opened up pandora’s box. He’s even managed to get a lot of Republicans on board and although I’m a fan of some of Trump’s policies there are consequences to the actions he’s taken.
Trump in many ways has tried to mimic Canadian style socialism, which isn’t good for Canada because what equates to is a more combative American voter, who will now want to use the power of government to make their foreign competitors kneel at their feet. Honestly this shouldn’t be a big deal to Canada, however, the new economic environment is that of higher regulations, which in turn leads to having a harder time hammering out trade deals with other countries.
It’s no secret that Canada has not only become reliant on the United States but also on China, we’re producing a lot less here in Canada because we’re sheltered from foreign competitors in many respects and this is starting to cause unforeseen problems that will only be shown if this NAFTA dispute is prolonged. The extra income the Canadian government is getting from tariff taxes is a short-lived tax. The truth is these tax will dry up when the private sector starts to see it’s dwindling bottom line.
It’s important to note that the private sector doesn’t always immediately pass the costs onto consumers, it’s typically a gradual thing to see what consumers can handle, once the private sectors hit by the tariffs can measure their bottom lines, they’ll move to make their portfolio more investor friendly, it’s at this period where it will almost seem like a uniformed attempt for the private sector to simply raise prices. At this point, the Canadian consumer will realize that their options have been limited and it’s at this point where prices will rise as there will be more demand and less supply for the same goods.
I have to add again that Justin Trudeau’s Liberals have been increasing the size of the public sector. They haven’t slowed and therefore Canada is inadvertently heading into Latin America territory as far as Public spending goes. You see what is happening in Canada is not that Trudeau’s Liberals are intentionally trying to make Canada more dependent on government, it’s the fact that the private sector is shrinking while the public sector is growing. Doug Ford recently tried to cut the size of Government in Ontario and he was denied.
This is how things happen in Latin American countries, it’s not that there haven’t been politicians in Argentina for example that tried to cut government spending, the problem is that the government got too big and the bureaucracy, plus the unions won’t allow it. I’ve been saying for years now that it’s in Canada’s best interest to crash the economy now, rather than later because if it crashes later it will be a lot harder to fix, as there will be way more people reliant on the public sector to survive.
In Argentina as an example no matter what actions the government takes, the people boycott it, the people of Argentina have to boycott it because their livelihoods depend on the government. Canada’s road to this is happening in a different way, we’re losing a private sector while our public sector is growing, our government subsidized corporations are making a lot of money and there’s no corrective mechanism in place to tell them if they’re doing right or wrong. This is the same reason why in Venezuela their economic crash happened without the government knowing how to fix it. It happened incrementally and when the crisis happened the government had gotten so bloated that corruption was inevitable.
These issues facing Canada today are no laughing matter, there are consequences. Even if Canada manages to win this trade war, the real problem is the message that it will send to Canadians. I advise the readers of this post to consider reading the article below. Pay close attention to how the author frames his arguments in comparison to how I framed mine.
Canada has taken in almost $300 million from retaliatory tariffs on U.S. imports
Interesting times ahead
