Wassup With Canada?

There is a good deal of confusion (and ignorance) about the imbroglio with Canada.  We will admit that the trade agreement with Canada, its NATO participation, and its very real economic weakness were not known to us.  So for all three of my readers, here's the quick story from the Treehouse.

 ...Following the 2024 presidential election, Prime Minister Justin Trudeau traveled to Mar-a-Lago and said if President Trump was to make the Canadian government face reciprocal tariffs, open the USMCA trade agreements to force reciprocity, and/or balance economic relations on non-tariff issues, then Canada would collapse upon itself economically and cease to exist.  In essence, in addition to the NATO defense shortfall, Canada cannot survive as a free and independent north American nation, without receiving all the one-way benefits from the U.S. economy.

...President Trump then said, if Canada cannot survive in a balanced rules environment, including putting together their own military and defenses and meeting their NATO obligations, then Canada should become the 51st U.S state....

Well, THAT we recall.  It's the only thing the MSM *spit* can talk about, likely because it's the only thing they KNOW about Canada.

Moving on...

 ...Representing Canada, Justin Trudeau was not expressing an unwillingness to comply with fairness and reciprocity in trade with the USA, what Trudeau was expressing was an inability to comply.  Quite simply, after decades of shifting priorities, Canada no longer has the internal economic capability to comply with a fair-trade agreement (FTA). ...

 ...This is where it becomes important to understand the core reason why Trump, Ross and Lighthizer (2017) did not structurally want to replace the NAFTA agreement with another trilateral trade deal. Mexico and Canada are completely different as it pertains to trade with the USA....

Inter alia, Canada has NATO obligations, where Mexico does not.

...Canada would have to spend at least another $15 billion/yr on their defense programs in order to reach 2.0%.  Justin Trudeau told President Trump that was an impossible goal given the nature of the Canadian political system, and the current size of their economy ($2.25 trillion). ...

Hmmmmm.  Moreover:

 

...Canada has deindustrialized their economy, Mexico has not.  As the progressive political ideology of their politicians took control of Canada policy, the ‘climate change’ agenda and ‘green’ economy became their focus.  The dirty industrialized systems were not compliant with the goals of the Canadian policy makers.

The dirty mining sector (coal, coking coal, ore) no longer exists at scale to support self-sufficient manufacturing....

Hmmmmm.  There are more problems, but not as significant.  So what is the upshot?  This:  a trilateral agreement like NAFTA/USMCA will not work any more.  That means two different trade agreements; one with Mexico, one with Canada.

...Because the Canadian government became so dependent on their role as an assembly economy, they enmeshed with China in a way that made them dependent.  The political issues of Chinese influence within Canada are a direct result of this dynamic. In fact, China was the big winner from the outcome of the recent election because all of their investments into Canada are grounded on retaining Liberal government dependency.

If Trump targets China with punitive tariffs, the Canadian economy will be collaterally damaged.  Canada will end up paying a tariff rate because they use cheap Chinese component parts in their finished goods.  Canada has structurally designed their economy to do this over multiple years....

Did  you have the foresight to front-load popcorn purchases??  Then get ready!

 ...If you think the multinational corporations, political leftists and UniParty Republicans in the USA are strongly opposing Trump now, just wait until later this year when the Trump administration proposes the elimination of the trilateral North American trade agreement, USMCA....

Larry Fink, Fox Murdoch/PaulRyan News, and the Libertarian Idiot crowd will be leading the REEE REEEE REEEE.  Let 'em sqeal.  What's the old saying.........Hogs get fat but pigs get slaughtered.....

Heh.