Canada responds to U.S. tariffs with its own ‘countermeasures’

In business, there’s no place for emotional reactions, I’d be lying if I said that Canada can’t win this trade war, however American’s are more entrepreneurial than are Canadians, and most Canadian companies are reliant on U.S companies to even survive, so in my opinion it’s not a wise move for the Canadian powers that be to react emotionally to Trumps Steel tariffs.

Now trust me if Canada was playing by NAFTA trade rules I would be against Trump on this one, but when it comes to economics, facts matter, customs charges matter and Canada has been in violation of NAFTA(North American FREE trade Agreement) for quite some time, so long in fact that Canada has convinced itself that we’re actually entitled to treat the North American Free Trade agreement as a subjective instrument of trade. I also think Canada forgets that Donald trumps position is that he’s willing to walk away from the NAFTA deal altogether, which in reality would do worse harm to the Canadian economy than it would the United States economy.

Here’s Canada’s major problem when it comes to economics, the thought of the government providing a social safety net is a very real reality in Canada. It’s such a reality in Canada that even the conservative party makes sure it doesn’t touch things like Universal Healthcare. In America, the thought of a social safety net depends on what political party you subscribe too. In America, everybody knows the Republican Party as the business-friendly party, In Canada, the conservatives have simply branded themselves as the party that charges you fewer taxes. I’ve said it over and over again that Conservatives when in power in Canada don’t really cut back on anything, there is no Ronald Reagan in Canada to speak of, America can now brag of 2 in the last 40 years.

A lot of the entitlements Canadians enjoy today actually have come at the expense of America. I want Canadians to think about something, even with the lower Canadian loonie in many respects a Canadian would save a lot of money if they moved to the United States, a lot of Canada’s elderly live in the U.S because it’s cheaper and they only return to Canada when it comes to their health. Now, if you were to just look at the numbers one could argue that because of the entitlements Canadians receive via the social safety net, that we Canadians are better off. Well, that’s only true for as long as Canadian politicians are able to outsmart American politicians.

So the reality is this, I’m curious to see how the Canadian government will react to American tariffs because in the short run Canada will lose, Canada will lose big time because the cost of living in Canada is already high, what tariff charges do is they make things even more expensive, this is in a time when Canadians are in record levels of debt and as the U.S Federal Reserve continues to raise rates this puts more pressure on the Bank of Canada to raise its rates. Also, don’t forget that Canadians that voted Liberal also voted for deficit spending, so higher rates equate to more debt for the government.

If this was let’s say the late 1990’s sure a tit for tat could work, but right now all I will say is… Canada we’re no longer on the higher moral ground. We are in debt, the problem with deficit spending in times like these, there’s a very good chance that Canadian dollar will have to depreciate a whole lot in order to pay for this debt, which would lead to a lot of inflation, plus being, that most Canadian businesses are dependent on the U.S to survive well, I personally think the Canadian powers that be should really reconsider their position and not react emotionally to Trumps tariffs.

Despite what’s being told by the mass media in Canada, the basis of trumps tariffs are based on Canada putting tariffs on American made goods coming into Canada. Also, if you know the history of Donald Trump it’s important to know that he considers what the Bank of Canada is doing as manipulating their currency. The BoC recently did not move their interest rates, which in Trump’s mind gives Canada an unfair economic advantage over America as it allows Canada to devalue its currency while selling into the American marketplace, this giving Canadian companies 2 advantages over the U.S.

I hope Trudeau’s Liberals know what they’re doing.

Interesting times ahead.