Tuesday, March 04, 2025

Elbows Up! Responding to the Trump tariffs


Well, here we go. 
And Canada is in it to win it:
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Trudeau tried. 
But Trump is just in love with breaking things. And I think he is tired of Musk getting all the press lately for Making America Great Again so Trump desperately wants to get some for himself.  And he seems to think that tariffs will return America to his daddy's ideal world - the 1880s. 
And besides, what could go wrong? 
Canada will show him what can go wrong. Canada's immediate need in the next few months will be to support our laid-off workers, our stressed industries, our affected manufacturers and our devastated towns. 
But NOT with knee-jerk tax cuts.

Tax Cuts (For Tariffs)
On Poilievre’s Blithe Banality
...Poilievre showed on Sunday he doesn’t have the mettle to seriously engage with real issues. And it’s horrifying. As Conservatives try and claim Mark Carney will not meet the moment, rolling out tax cuts as the solution to problems is so unserious as to be laughable.
...If you give a broad tax cut with the money raised from tariffs, you’re in effect subsidizing the managerial class, the public service, and those in white collar professions with the pain of the blue collar workers who are about to get utterly fucked by this. ...the guy making six figures at a Seven Sisters firm is not the priority now.
What we need to do with whatever money we raise from tariffs is protect two groups of people - the poor, who may face higher prices for essentials because of this, and those specifically fucked by tariffs. The moderately wealthy who already have a decent amount do not need more, but they would be big winners out of any tax cut. They have enough money to benefit from a tax cut without so much money tax rates become irrelevant. It’s a disaster of a policy.
If we have tariffs, we are going to need to shore up key industries, like lumber and steel. As much as my friends may feel worried, the imposition of tariffs on Tuesday would not lead to a round of layoffs at the Seven Sisters or in the public realm. It might in the steel industry. That fact should animate the tariff question.
What Poilievre is proposing is a massive wealth transfer from those getting fucked by Trump to those whose well being is irrelevant. The Conservatives are pitching this because they have one pitch, one answer, one solution to every problem.
Instead, I think we will need another CERB-type of program, aimed at the workers in the industries that will be devastated by the American tariffs. 
CERB turned out to be controversial in the end, in spite of its remarkable success in keeping the Canadian economy functioning through the COVID disaster. 
Here is an interesting article from 2023, by Adam King, a Labour Studies professor at University of Manitoba, reviewing how the CERB program benefited Canadians:
CERB Had Many Problems, But Also Achieved Some Remarkable Feats
We should celebrate the relative success of the CERB and the other individual support programs, and learn from them going forward.
...Employment Insurance (EI), enfeebled by years of eligibility restrictions, low wage replacement and under-funding, simply couldn’t respond to the magnitude of COVID-19’s economic devastation. Yet, even a much improved EI system would likely still have been incapable of meeting the extraordinary needs of workers during the pandemic shutdown. The COVID-19 economic contraction was simply unprecedented, whether measured by the number and pace of jobs shed or by the pace and depth of the macroeconomic downturn. Widespread income support and economic stimulus were the only rational courses of action.
We should therefore celebrate the relative success of the CERB and the other individual support programs. They got money into workers’ hands quickly. They not only staved off an economic depression but they managed to reduce poverty in the process. They also contributed to a surprisingly fast recovery — partial and tenuous as it now appears. As the AG concludes, pandemic support programs overall “quickly offered financial relief to individuals and employers, prevented a rise in poverty, mitigated income inequalities, and helped the economy to recover from the effects of the pandemic.”...
But first, the Liberals have an election to win.  And a nation to protect. Because Trump's idea isn't to "protect America" it is to absorb Canada into his American nightmare:
Donald Trump has decided it’s now Canada’s turn to get slapped around
Trump, make no mistake, is feeling emboldened to slap around any country in his line of sight, complete with the now familiar string of insults and derision.
His commerce secretary, Howard Lutnick, was out all over the U.S. media over the past few days, helping his boss dangle the tariff threat over Canada and Mexico, also underlining that Trump will be the sole judge of what’s good enough for his country.
In an interview on CNN on Tuesday morning, Lutnick presented Trump’s border complaints against Canada and Mexico as a matter of inadequate deference.
“Why are we building a wall when the most important trading partner to Mexico and Canada is America? They should be more respectful.”
That word — “respectful” — is incredibly telling. It is the same complaint that Trump and all his team were out making on the weekend about Zelenskyy — that the Ukraine president wasn’t showing enough humility to the president during that disastrous meeting on Friday.
...Canada could have warned Zelenskyy this is how things stand with Trump right now. For months now, the president has been taunting Justin Trudeau as the mere “governor” of Canada, even suggesting at one point that hockey legend Wayne Gretzky could lead the country.
Last week, in an interview with The Spectator, Trump even suggested that Chrystia Freeland, now running to be the next Liberal leader, was a “whack” and no longer in Trudeau’s cabinet because of the president’s intervention.
“Governor Trudeau understood that. And he actually fired her because of a meeting he had with me. I said, ‘She is so bad. She’s bad for the country,’” Trump was quoted as saying.
Apart from the remarkable hubris, not to mention the inaccuracy (Freeland quit her job as finance minister and deputy prime minister), Trump and his team seem to believe they have not just been given a mandate to change the United States, but to mix things up internally in other countries, too. One day it’s Canada, the next day it’s Ukraine
Let’s not forget either that Trump has his sights set on Canada and Ukraine because of their supplies of critical minerals. Again, Canada could have warned Zelenskyy before his fateful meeting that the U.S. doesn’t just want the minerals — Trump wants to control the countries that supply them, too.
Most Canadians were already angry at the prospect of tariffs and are bound to be even angrier as they hit this country’s economy in serious ways in the days and weeks ahead.
But the fact that they come after that extraordinary meeting with Zelenskyy on Friday underlines the belligerence with which Trump is conducting his America-first policies. For Trump to win, everyone else has to lose. This isn’t a president who is dealing in win-win propositions, at least not now. That’s why the fight against the tariffs was already heavily weighted against Canada....
On the longer view, here are some more great pieces:
On the issue of making Canada more independent militarily, here's a great article from Black Cloud Six about the challenges the Canadian military will be facing -- and hint, they aren't financial...
From Ally to Adversary - Canada’s Military in the Shadow of U.S. Ambitions
...Ideally, disentangling from the United States would have started with the first threats against Canadian sovereignty. This is highly unlikely to be the case, even in the intelligence realm, where it should have been pursued with urgency. The history is too long, and the ties are very, very deep. The natural reaction of Canadian leaders will have been to downplay or even disregard the threat.
But there is a threat—an existential one. We need to begin making very urgent moves to improve our sovereign defence capability. Again, I listed a number of steps over a month ago - Disentangling from America. While my position has been that the F-35 purchase is too far along to cancel, we need to examine any future purchases through the lens of sovereignty. We need an independent defence policy with diverse purchases, a broader alliance, larger (in some cases, much larger) numbers, and a sense of urgency that the government has yet to display. Defence is—and should be—becoming an issue. It must be an issue in the next election.
Here's a good thread today from X: Here's another long-term investment for Canadian ingenuity:
Ideas Lying Around: Trumpism is our oil crisis.
....This is our [1980s] oil crisis, in other worlds: a moment in which a belligerent superpower's ill-considered monkeying with the underpinnings of global production will cause chaos...
..There's a much better alternative [than retaliatory tariffs], one that strikes at the very roots of American oligarchy, whose extreme wealth and corrosive political influence comes from its holdings in rent-extracting monopolies, especially Big Tech monopolies.
Tech giants are the major factor in US economic health. Take Big Tech stocks out of the S & P 500 and you've got a stagnant market punctuated by periods of decline. Superficially, US tech companies have different sources of extraordinary profit, but a closer look reveals that they all share the same foundation: Big Tech makes the bulk of its money in the form of monopoly rents, backstopped by global IP treaties.
Apple and Google take a 30% cut of every dollar spent in an app, and it's a felony to jailbreak a phone to make a new app store with the industry standard 1-3% transaction fees. Google and Meta take 51% out of every ad dollar, and publishers and advertisers are locked into their ecosystems by abusive contracts and technological countermeasures. HP charges $10,000/gallon for the colored water you put in your printer, and third-party ink and refills violate the anti-circumvention laws the US has crammed down the throats of every country's legislature. Tesla makes its fattest margins by renting you features that are installed in your car at the factory, from autopilot to the ability to use your battery's whole charge, raking in monthly fees from you and anyone you sell your car to – and the reason your mechanic can't just permanently unlock all that DLC for $50 is the IP laws that your country agreed to enforce in order to trade with the USA. Mechanics pay $10k/year per manufacturer for the tools to interpret the error codes generated by your car, and the only reason no one is selling a $50/month universal diagnostic service is – once again – US-originated IP laws that came in a parcel with trade agreements that gave your country's exporters access to US markets. Farmers pay John Deere $200 every time they fix their own tractors, because the repairs won't work until a technician comes out and types an unlock code into the tractor's keyboard – and bypassing that unlock code is a crime under the laws passed to comply with international treaties.
These aren't profits – they're rents. It's money Big Tech gets from owning a factor of production, not money it gets from actually making something. ...
...But foreigners don't have to tolerate this nonsense. Governments around the world signed up to protect giant American companies from small domestic competitors (from local app stores – for phones, games consoles, and IoT gadgets – to local printer cartridge remanufacturers) on the promise of tariff-free access to US markets. With Trump imposing tariffs will-ye or nill-ye on America's trading partners large and small, there is no reason to go on delivering rents to US Big Tech.
The first country or bloc (hi there, EU!) to do this will have a giant first-mover advantage, and could become a global export powerhouse,
...It's time for a global race to the top – for countries to compete with one another to see who will capture US Big Tech's margins the fastest and most aggressively. Not only will this make things cheaper for everyone else in the world – it'll also make things cheaper for Americans, because once there is a global, profitable trade in software that jailbreaks your Big Tech devices and services, it will surely leak across the US border. Canada doesn't have to confine itself to selling reasonably priced pharmaceuticals to beleaguered Americans – it can also set up a brisk trade in the tools of technological self-determination and liberation from Big Tech bondage.
Taking the margins for Big Tech's most profitable enterprises to zero, globally, will strike at the very heart of American oligarchy, and the hundreds of millions tech giants flushed into the political system to put Trump into office again. A race to the top for technological liberation benefits everyone – including Americans.
Truly, it would be a rising tide that lifted all boats (except for oligarchs' superyachts – those, it will swamp and sink).
Until we can get organized and put some of these ideas into effect, it's going to be a shitshow:
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