Liberals in America spent the last week freaking the hell out over the “trade war” with Canada and Mexico that was really more of a trade “water balloon fight”… a water balloon fight that Donald J Trump rolled up to strapped the full force of the United States economy.
The fear and panic of the economically illiterate left quickly swept the nation. But yesterday we received news that in fact both the Mexican President Claudia Shienbaum, and Prime Minister Justin Trudeau had given into the pressure Trump had placed on them.
Only 3.8% of the U.S. GDP is tied to trade with Canada. Conversely, 43% of Canada’s GDP is reliant on American trade. The United States total GDP is also a whopping 12.8 times larger than Canada’s. Mexico is in a very similar boat, a sinking boat that is.
Yesterday morning reports indicated that Trump paused the draining 25% tariffs that he imposed on the two nations. But why would he do that? Well because he got EXACTLY what he wanted.
Trudeau announced that he’d be spending $1.3 billion to reinforce the Canadian border with personnel and helicopters to stop the flow of illegal immigrants and fentanyl into America.… well look at that.. what a coincidence. Mexico did the same. Announcing that they’d reinforce their border with 10,000 members of the the Mexican National Guard.
Trump announced that he will continue negotiations with our two neighbors to further extract American interests from our friendly partners who repeatedly abuse their relationship with us.
The United States is the strongest economy in the world, it should be an absolute pleasure to do business with us. Our trade partners should be dying to maintain their relationship with us rather than stabbing us in the back. Trump made very clear what he wanted from both countries. They refused to deliver and so he moved to imposed tariffs. They both puffed their chests and tried to fight a war they never could have won. Fly meet swatter.
America has a bigger stick, more money, a larger economy, a stronger leader and more leverage. As a result the Canadian dollar and the Mexican peso dropped in value, and the U.S. dollar shot up in value. Since the agreement has been made with the two nations, their value has stabilized thanks to the gracious Donald Trump.
I’d also like to just get one thing out of the way, anyone telling you tariffs are this "ooga booga boogie man bad thing"… first of all Obama imposed tariffs on China. He imposed 35% tariffs on Chinese tires, he imposed tariffs on Chinese solar panels ranging from 30% to 250%, who placed tariffs on Chinese steel up to 500%.
Obama tariffed South Korea, one of our closest allies, India, the EU, Argentina, and Vietnam. Biden tariffed China AND MEXICO. But that’s not the point.
Why are tariffs so bad? Well they’ll tell you “it’s just like an income tax, the cost gets passed back down to the consumer” it’s true, that in the short term, it could cause the price of some goods to go up…
"But the poor people won't be able to afford food!"
Not true.. The only products who’s prices will be affected by tariffs are products built, created, assembled or grown in foreign countries. 79% of all food, beverages, and tobacco products consumed by Americans are domestic in origin according to the Department of Commerce. Your food prices will not be affected.
Furthermore, if you want a piece of let’s say.. technology, that is affected by tariffs, consider buying American rather than paying for the tariffed good. You have a CHOICE. The price hike isn’t automatic like an “income tax” which is the fundamental difference.
Tariffs can do three things things, be used as a negotiating tactic (which we just saw in action), bring production back, and alleviate the need for income taxes.
Taxes are non-consensual. You work, you earn dollars, your dollars are a physical representation of your money. If you worked 1hr and made $15 your $15 is worth 1 hr of your time and labor. If the government can force you, under threat of violence and imprisonment to relinquish your labor - effectively steal your labor - you are a slave.
If we can in any way limit this obviously unjust action, we should. If tariffs can relieve at least some of this dilemma, they should be used to do so - because at least when prices (temporarily) go up as a result of tariffs, you CHOOSE whether you buy goods at the increased price. You don’t choose to pay taxes. You go to jail if you do not. Nobody is forcing you to buy Canadian timber or Chinese steel.
Now, I say prices would temporarily go up because the goal is to incentivize American companies to produce at home rather than abroad. Tariffs make the economic climate for those corporations inhospitable. As a result they produce in America, where they are not tariffed to sell to their primary consumer base.
That’s another thing people just don’t understand about this whole debacle with Canada and Mexico… it’s not personal. Trump didn’t do this because he doesn’t like Trudeau or the Mexican President. He just had dinner with Trudeau a few weeks ago. He did it to get what was in the best interest of the American people.
