Well here we are ladies and gentlemen. T-Day minus one. What does that mean? It means exactly what it means. It is January 31, 2025, one day before our new overlords to the South will be implementing their dreaded tariffs on the backs of unsuspecting Canadians and the media and political frenzy is AMPED UP!!! Time to fight back as only Canadians know how!
Maybe. Maybe tomorrow. Sheesh. Try to settle down people. Maybe we need a saviour? London, where are you when we need you?
Instead…
On the one hand we have the Trudeau government cobbling together a host of retaliatory tariffs designed to in a single blow be the fly to the American elephant while also further crippling Canadians accompanied by proposed massive bailouts for “Canadian workers” (the Trudeau Liberals have never met a crisis they couldn’t exploit with spending), otherwise known as the road to ruin.
On the other we have to watch as Jagmeet Singh yet again shows that he has absolutely zero spine as he muses about maybe not voting against the Liberal government in a confidence motion because there may be spending and he doesn’t want to block money to workers, otherwise known as he looked at the polls and sees that front-runner Mark Carney is stealing votes from him and his party is broke and directionless.
Speaking of which, we have the two leadership hopefuls for the Liberal party going toe to toe in an insanely boring race. Mark Carney has yet to articulate a tariff strategy, instead relying on proxies to remind us incessantly that he was a central banker. Chrystia Freeland on the other hand seems to be relying on the “Donald Trump hates me, so I’m the answer” strategy. Questionable, but at least she is outlining how tough she is and what mean steps she is going to take.
Doug Ford is so worried that he has called a completely self-serving and unnecessary election which, to be honest, is more likely to harm Pierre Poilievre than anything else if Ontarians decide to vote strategically in an as yet to be called Federal showdown between Carney Liberals (he’s a carny!) and Poilievre and the Conservatives.
Speaking of whom, Pierre finally sat down for a relatively mature and substantive discussion with the media on tariffs, Trump and streategy. Surprisingly devoid of rhyming couplets, his strategy laid out a rational approach of targeted retaliatory tariffs accompanied by a string emphasis of fixing domestic issues such as inter-provincial trade, infrastructure inertia and attracting investment and “bringing it home” (can’t avoid the slogans forever).
Danielle Smith for her part is consolidating her position, getting Scott Moe of Saskatchewan on her side, while David Eby is using the tariffs as a partisan way to make himself seem tough.
In Quebec, Francois Legault is stuck between a rock and hard place. He is probably supportive of Smith’s position while being massively concerned about how all of this tariff stuff is going to affect Quebec. On the other hand, he is way behind in the polls and may be considering the positive impact being tough AND collecting a whole pile of redistributed moola from Alberta and debt-financed federal spending for his working population might shore up his electoral chances.
Meanwhile, the technocrats and big brains over at the Bank of Canada have looked at the tea leaves and determined that tariffs or no tariffs, things don’t look good at the mother ship Canada so they pre-emptively cut another 25 basis points of their lending rate and half-a-cent off the dollar. Not really leaving a lot of policy room for tariffs but hey, all that proposed new federal borrowing will be a bit cheaper. Not that anyone will really want to load up on Canadian bonds when the yields for US treasuries are a full 1-2% higher.
Look, we are far too reliant on the United States and because everyone is relatively peaceful, we take them for granted. As a result, our political class has been able to skew spending into priorities that don’t reflect a passionate defense of our sovereignty, an unabated thirst for economic growth or a recognition of the fragility of our “independence”. Canada is blessed with best natural resources bounty of pretty much any country in the world aside – on par with Russia. Everyone wants what we have and we just assumed that with the monster to the South we could work from home on modified hours, set prices where we wanted, not invest in upgrades and treat ourselves to the equivalent of avocado toast, triple macchiato lattes and a leased luxury EV and second home in the Muskokas. This isn’t a way to run a business or, metaphorically, a country.
If you choose to stand on the train tracks every day without moving, eventually you are going to get hit by a train. It’s not the train’s fault.
Ugh. Where’s the Pepto?
As I said last week, there is way too much hand waving and what feels like a complete lack of strategy happening as it regards the upcoming imposition of tariffs (which may or may not happen) and to the extent there is, much of it revolves around trying to act tough to try and spook the Americans while also gaining political points at home, while simultaneously crushing the domestic economy and priming the money spigot (a real spigot, not like the fantasy water one Mr. Trump talks about).
At any rate, far be it from me to rehash last week’s thoughts on approach, although I will summarize it:
- Calm down
- Have a plan
- Don’t talk about the plan
- Don’t shoot yourself in the face
- Implement the plan when least expected for maximum impact
- Try to understand what is really happening and what the Americans really want*
- Start USMCA negotiations ASAP
- An. Election.
- Calm down
- Stop flapping
- Don’t call people traitors
*For the record, this seems to change, but it is safe to say that if you were to align certain non-trade policies more closely with their current desires, you are, no matter what, in a better position to make the case you are a valued partner and should escape the full Monty. So, the border and the military. Do it. I know steps are being taken. But do more. Talk about it. There was a hearing yesterday for Commerce Secretary where nominee Howard Lutnick explicitly said that the tariffs are a commercial lever to get the border fixed. This guy is one of Trump’s besties. Listen to him.
Also, as if this needs to be restated. These are not normal negotiations. Canada is a fly. The US is an elephant. The fly is hard pressed to set terms with the elephant. Now factor in that the elephant likely has mad cow disease. See where I’m going here?
And now, as is my wont, or habit, or style, or need, I will share with you, my dear readers, the Top 10 directed tariff and trade actions that I think would have the most impact in this upcoming tariff war that may or may not happen.
True to the fly vs elephant analogy, most of these are of the irritant variety, designed to get those people that Trump listens to speaking up, or at least whispering in his ear. Remember, Trump is volatile. That’s not always a bad thing. He changes his mind a lot. You don’t need to plead directly to him if, for example, you can get someone in his inner circle really annoyed. But he ain’t gonna listen to a Canadian, unless it’s Celine Dion (apparently he has a thing for big diva opuses), our secret, secret weapon.
The Elon Play
Canada should be prepared to apply matching tariffs on all products that Elon Musk’s assorted companies export into Canada. This includes Tesla, Star-Link, The Boring Company and NeuraLink. Sure Elon is rich and it won’t affect him that much, but he is also greedy AF and won’t like being targeted. These tariffs should be the same amount as whatever tariffs are imposed on Canadian goods and should be implemented on the same day Tesla announces earnings. Starlink users should also be made to pay a surcharge to support Canadian telecoms. Amount TBD.
The Social Media Smackdown
I know we already have stupid new bills that have impacted our social media experience here in Canada, with Facebook pulling its reposting of news in an angry huff. But in a trade war, the gloves need to come off at some point, so I would propose a digital services tax on X, Facebook, Instagram and others of $1 a month per user, rising to a dollar a week then a day as an escalation. Sure it’s a money grab, but what isn’t? We would provide special exemptions for TikTok (because we don’t want to piss off the Chinese) and dispensation for any social media site that agrees to adjust its algorithm to say nice things about Rush and Gordon Lightfoot. If they decide to freeze us out, would it be so bad?
Tariff on Red Ties
I have noticed a lot of people wearing red ties as an “homage” to Trump. I propose 100% tariffs on any red ties imported from the United States with a second layer of taxes applied to boxy, ill-fitting navy blue suits with padded shoulders.
Export Tax on Canadian Talent
No more free rides. If you want to book Canadian talent for your show, you need to pay the Canadian government. This includes country stars, pop stars, actors and actresses, directors, producers, hangers-on – you name it. The kicker is that we will also apply this export tax on residuals so that any movie, song or printed word made by a Canadian will be subject to a tax. I don’t know about you, but I feel like this one is a winner.
Canadian Invention Tax and Duty
This is for when the gloves really need to come off. America has for too long been the beneficiary of some incredible Canadian inventions and has never given us credit or monetary compensation. In the words of the President, we are being ripped off, big time, and not treated fairly. That changes now. The following products invented in Canada are now subject to taxes and duties: the zipper, peanut butter, snowmobiles, paint rollers, garbage bags, ROAD LINES, the Wonderbra, IMAX, the Pacemaker, Pablum, Insulin, Java, the electric wheelchair, the Abdominizer, Hydrofoil boats, Odometers, railway brakes, newsprint, the gramophone, STANDARD TIME, canola, plexiglass, insta mashed potatoes, jolly jumpers, lawn sprinklers, rubber shoe heels, the TUCKAWAY-HANDLE BEER CARTON and, the piece de resistance – Basketball and “American” football, first played at McGill.
If the taxes aren’t paid, the right to use these products is hereby revoked. Implementation of the football ban to be Sunday February 9, during the Super Bowl pregame show – hour 2, just before the Travis Kelce-Taylor Swift season retrospective.
Export Tax and/or Supply Restrictions
Again. No. Not on the table. We will explain to the Americans the error of their ways putting a tariff on our energy imports to them while avoiding the abject stupidity spiral of escalating energy tariffs. We won’t even tariff our imports of crude and finished energy products.
WWE Surcharge
We will apply a punitive tariff on any WWE tours travelling across our fair country. This will be applied to each ticket sold and will be called the “this is Linda McMahon’s fault” surcharge. In BOLD.
Washed up Politician Repatriation
The Canadian government on behalf of taxpayers is going to purchase a single life-time membership in Donald Trmp’s Mar-a-Lago property as well as memberships at ALL of his golf courses and bequeath them to Justin Trudeau on the condition that he has to move there. He will have a permanent seat next to Melania and will be restricted to only talking about himself, global warming and bursting into the occasional Quebecois folk song. In French of course.
Joe Rogan Ransom
Canadian Special Forces have already infiltrated the United States and are currently on standby outside of Austin with instructions to kidnap Joe Rogan and bring him back to Canada where he will be held ransom until such time as we receive $100 billion or the tariffs come off. He will still be allowed to broadcast occasionally, but only from CBC studios and approved Cancon (Canadian content) such that the longer the kidnapping lasts, the more “woke” and Canadianized he will become – taking his followers with him.
Journalist expulsion
We are going to expel every American journalist from Canada and send them back to Washington DC. Come to think of it, we will send our Canadian ones there as well. After all, we will have Joe Rogan.
Liquidation – the Nuclear Option
In Canada, just like in the United States, we have a lot of private equity funds and we also have a number of extremely powerful pension plans, representing all Canadians, teachers, hospital workers, Quebeckers and pretty much everyone in between. A cursory glance shows that the top 7 funds that I chose to look at own $800 billion of US-domiciled assets including public and private equity, venture capital, fixed income, real estate and infrastructure investments. This retaliation proposal suggests that all these investments be sold en bloc to China. Once these sales are done, the rest of the Canadian investment class will be asked to dispose of all their US holdings to a find managed by Iran. If the US isn’t interested in having us as a free-market trading partner then we can go ahead and dump our US stocks. Since most of this is publicly traded, the run will be something to behold. And don’t even think to retaliate – Americans don’t hold a lot of Canadian equity anymore. This should serve to depress the US dollar significantly, making imports that much more expensive. Not to mention the geopolitical implications of Iran and China owning so much of the US capital stock. Hate to do it. But… merp?
The only export leverage we really have.
These tariffs come in, we will implement a 100% reduction in maple syrup exports. No. More. Syrup.
Suckers.
Well, there you have it. The genius plan. I do have a few things we might put on the table to sweeten the pot for the USMCA renegotiation, but I’ll keep those up my sleeve for some future blog. But it may involve cheese from Wisconsin and Washington; deregulating the airline industry and allowing competition in … telecoms.
But if the tariffs come tomorrow which seems likely based on all the best intel, my magic eight ball and the fact that Trump only implements tariffs on odd-numbered days, then clearly my plan is ready.
Are our politicians?
Bring it on!
I’ve got the Littlest Hobo on my side.
