Let’s discuss the reactions of Canada and Mexico to Trump’s tariffs and how they differ.
Trudeau Condemns Trump’s Tariffs
The New York Times reports Trudeau Condemns Trump’s Tariffs, Pledges to ‘Relentlessly Fight’ to Protect Canada’s Economy
Prime Minister Justin Trudeau of Canada on Tuesday harshly condemned the tariffs that President Trump imposed on Canada, as well as Mexico and China, saying in a televised address that they would hurt people on both sides of the U.S.-Canadian border and that Canada would “relentlessly fight” to protect its economy.
José de Jesús Rodríguez, president of the chamber of commerce of Mexico City, predicted economic turmoil for Mexico, including a possible recession and unemployment of as much as 15 percent, given the deep integration of supply chains between Mexico and the United States. “It is extremely disappointing and frustrating,” he said. “The United States broke their word, and it dictates the future of our commercial relationship with the U.S., meaning it’s time for us to look to other regions.”
Collection Disruption
The sweeping tariffs on Canadian, Mexican and Chinese products that President Trump imposed on Tuesday could strain the system that collects import duties and the government agencies that enforce those fees, trade and legal experts said.
Collecting import duties is usually a routine task, but the new tariffs are being imposed on Mexican and Canadian goods, many of which have been imported into the United States duty-free for many years. Adding to the challenge is the sheer volume of goods subject to the new tariffs — U.S. imports from China, Mexico and Canada totaled over $1.3 trillion last year, or about two-fifths of all imports.
Speaker Mike Johnson, at a news conference at the Capitol on Tuesday, said he supported President Trump’s initial round of tariffs, saying they were “not an adversarial thing.” [What a F’ng Suck Up Joke]
The furious reaction to Trump’s tariffs continues in Canada, and has not been limited to Prime Minister Justin Trudeau or his party. “At 12:01am, President Trump stabbed America’s best friend in the back,” Pierre Poilievre, the leader of Canada’s Conservative Party, told reporters, projecting a message of unity and pitching his plan to fight back against the tariffs. Poilievre is a favorite, according to recent polls, to become Canada’s next leader.
Doug Ford, the premier of Ontario, said that he has ordered the removal of all U.S.-made liquor from the province-controlled alcohol distributor, cancelled the province’s contract with Elon Musk’s Starlink, and said he will write to all political leaders in New York State, Michigan and Minnesota, to warn them that if the tariffs persist, he intends to put a 25 percent surcharge on electricity exported to those states from Ontario.
Starlink Contract Cancelled
CBC reports Ontario rips up Starlink deal, plans to tax electricity in response to Trump trade war
Ontario will rip up its $100-million deal with Elon Musk’s Starlink internet provider and U.S. companies will be banned from procurement contracts as part of the province’s response to President Donald Trump’s tariffs on Canadian goods.
Premier Doug Ford announced the measures Tuesday, adding he’s warning lawmakers in New York, Michigan and Minnesota that if the trade war “persists” Ontario will put a 25 per cent surcharge on electricity flowing into the states and potentially cut the flow off entirely.
Ontario supplies roughly 1.5 million customers in the border states with electricity.
“This is not the outcome anyone wanted,” Ford said at Queen’s Park in Toronto. “We could have poured our efforts into making Canada and the U.S. the two richest, most successful, safest, most secure two countries on the planet. Unfortunately, one man — President Trump — has chosen chaos instead.”
During his news conference, Ford again threatened to surcharge or cut off critical mineral exports to the U.S. should the trade war linger.
“We also need to be ready to dig in for a long fight,” Ford said. “We need to be ready to escalate using every tool in our tool kit.”
Ford spoke just after hours Ontario’s primary liquor wholesaler and retailer confirmed it will stop purchasing and selling U.S. alcohol.
Prime Minister Justin Trudeau announced late Monday that Canada’s retaliatory response would include matching tariffs on $155 billion worth of U.S. goods — roughly $30 billion worth of goods right away and the remaining $125 billion in 21 days to give Canadian companies time to adjust their supply chains.
The premier said American companies will not be able to bid on the $30 billion worth of procurement contracts the province awards each year, or bid on contracts related to his $200-billion infrastructure plan to build highways, tunnels, transit, hospitals and jails.
“U.S.-based businesses will now lose out on tens of billions of dollars in revenues,” Ford said. “They only have President Trump to blame.”
As for the deal with Starlink to provide high-speed internet to northern Ontario, rural and remote First Nation communities, “it’s done, it’s gone,” he said.
“We won’t award contracts to people who enable and encourage economic attacks on our province and our country.”
Canadian premier says he will cut off electricity exports to US ‘with a smile on my face’
The Hill reports Canadian premier says he will cut off electricity exports to US ‘with a smile on my face’
Ontario Premier Doug Ford said Monday he is prepared to cut off electricity exports to the U.S. if President Trump’s 25 percent tariffs on Canadian goods go through.
“If they want to try to annihilate Ontario, I will do everything — including cut off their energy with a smile on my face,” Ford told reporters at a mining convention in downtown Toronto, the Toronto Sun reported.
The forceful statements by Ford, Premier of Ontario, in a video post on X highlights the forceful response to Trump compared to the more muted reaction by Mexico.
This Video by Ford is worth a play.
Mexico Says it Will Impose Retaliatory Tariffs on Sunday
In contrast to the immediate, forceful response by Canada, the AP reports Mexico Says it Will Impose Retaliatory Tariffs on Sunday.
Mexico will announce the targeted products and other measures Sunday at an event in Mexico City’s central plaza, a delay that suggests Mexico hopes to de-escalate the trade war set off by U.S. President Donald Trump.
President Claudia Sheinbaum said she and Trump had agreed to have a call this week, most likely Thursday, “so we are going to wait.” Mexico’s government has said since January it had a plan ready for this scenario.
“There is no motive or reason, nor justification that supports this decision that will affect our people and our nations,” Sheinbaum added.
Sheinbaum called “offensive, defamatory and without support” the White House allegations that Mexican drug traffickers persist because of “an intolerable relationship” with the Mexican government. Trump has said he’s targeting Mexico to force it to crack down on migrants and drugs entering the U.S.
She listed the achievements of her young administration against Mexico’s drug cartels, including seizing more than a ton of fentanyl and dismantling 329 methamphetamine labs. She also noted that Mexico sent the U.S. 29 drug cartel figures it requested last week.
“It’s inconceivable that they don’t think about the damage this is going to cause to United States citizens and businesses,” Sheinbaum said. “No one wins with this decision.”
Mexico’s president also noted that Trump on Monday said he respected her, and she said she respected him as well: “The thing is finding a way to collaborate, of coordinating without subordinating anyone for the benefit of our people.”
White House Threatens Even More Tariffs on Canada
In escalating Live Update stupidity, the White House Threatens Even More Tariffs on Canada
President Trump threatened to raise Canada tariffs again after Canadian Prime Minister Justin Trudeau retaliated against new U.S. levies.
“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!” Trump said Tuesday in a social media post.
[Lovely – Go for 500 percent tariffs and shut off all trade]
China Tariffs Could Weigh on Soybean Prices
The escalating trade war with China could exacerbate some of the issuers facing U.S. producers of corn and soybeans, according to Jake Hanley, managing director and senior portfolio strategist at Teucrium.
Prices for corn, wheat, and soybeans have been on a downward trend in recent days, in large part due to an Agriculture Department report last week that indicated rising supply, Hanley said. Teucrium ETFs tracking those three commodities are each on losing streaks of more than a week
China’s retaliatory tariffs on agricultural exports from the U.S. could make the oversupply issue a bigger problem for American producers, at least temporarily, Hanley said. This is particularly true for soybeans, as about 42% of the U.S. soybean crop is exported, he said, with a big portion of that going to China.
“Imagine now we have all of those soybeans that we thought were going to go to China, they’re staying home. They’re staying home until we can find a new market. … That supply just weighs down on U.S. soybean prices because we go from having enough to having plenty,” Hanley said.
Trump’s Tariffs Could Quickly Cut North American Auto Production by a Third
Please note Trump’s Tariffs Could Quickly Cut North American Auto Production by a Third
Roughly a third of vehicle production in North America could be cut by next week as a result of President Donald Trump’s 25% tariffs on Mexico and Canada, as automakers attempt to mitigate increased costs and buyers hold off on purchasing new cars and trucks.
That lost production would equate to roughly 20,000 units per day, according to a new analysis from prominent data and forecasting firm S&P Global Mobility.
The production impact as well as possibility of layoffs would continue to grow if the tariffs, which Trump implemented Tuesday, are not changed or lifted.
“We have a new dawn, to a degree. This is a significant move,” Stephanie Brinley, associate director in AutoIntelligence at S&P Global Mobility, said during a webinar with the Automotive Press Association.
S&P Global Mobility reports 25 automakers on average produce 63,900 light-duty passenger vehicles in North America per day. A majority of those, roughly 65%, are assembled in the U.S., followed by 27% in Mexico and 8% in Canada.
The Alliance for Automotive Innovation, a trade group representing the vast majority of automakers selling vehicles in the U.S., warned no automakers will come out unscathed, resulting in increased consumer costs.
″This isn’t hypothetical. All automakers will be impacted by these tariffs on Canada and Mexico. Most anticipate the price of some vehicle models will increase – by as much as 25 percent – and the negative impact on vehicle price and vehicle availability will be felt almost immediately,” Alliance for Automotive Innovation CEO John Bozzella said in a statement.
What About Parts?
the Ford F-150 is exclusively assembled in America but has roughly 2,700 main billable parts, which exclude many small pieces, according to Caresoft, an engineering benchmarking and consulting firm.
Those parts come from at least 24 different countries, according to Livonia, Michigan-based Caresoft.
That’s interesting. Just totally shut off delivery of a few necessary parts and watch what happens.
Whose Approach Is Better? Mexico or Canada?
My original thought was sucking up to Trump might be a great idea.
The problem is Trump will never be satisfied, he does not understand that trade benefits everyone (not just exporters), and he cannot be trusted to honor any deal he makes, even those he signed.
On the other hand, we are on the verge of escalatory madness of epic proportion in Canada.
An Issue of Trust
Trump has proven he may not honor any deal he signs. That is the unfortunate bottom line, and there will be a huge associated cost.
USMCA was up for renegotiation in June of 2026. But Trump couldn’t wait.
I am tired of nonsense about fairness or drugs or whatever. Trump personally negotiated USMCA, it was signed 89-10 by the US Senate, and now he broke the deal. So stop making excuses why.
If Trump wanted drugs to be part of the deal, then he should have put drugs in the deal.
Mish Suggested Approach to Trump
Given the total lack of trust anyone can possibly place on Trump honoring any deal, the best approach is likely along these lines:
1) Tell Trump how brilliant he is, 2) offer him something that costs little but sounds great and lets Trump brag, and then 3) he either takes it or not. 4) Respond accordingly.
It seems Mexican President Claudia Sheinbaum has figured most of this out. Congratulations!
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The short explanation is recession. The long answer is more complicated and related to tariffs.
March 2, 2024: How One Small Business Owner Is Coping With Trump’s Tariffs
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Multiply that by tens of thousands of small businesses.
February 2, 2024: Trump Claims “We Have All the Oil We Need” True or False?
By volume, we are reasonably close. But by grades of oil US refiners need, we aren’t. Here are the details.
And over 100 percent of the trade deficit with Canada is oil that the US gets at a very good price from Canada.
Yes, it’s this stupid.