Twinkle Twinkle Little Star

Do you know what tariffs are?

I have never had so many conversations about tariffs in my life. All. Damn. Day. Tariff here, tariff there. It seems that Canadians are all clutching their pearls at the latest tariff announcement from DJT. We all knew this would happen, we all saw the campaign, we all lived through his last administration, so why do we all seem to be so fucking shocked? Seriously.

I am going to throw out some points below, and give you some things to think about that I promise you CTV, CBC, and all the other Canadian news programs won’t give you. I don’t care if you like it, love it, or hate it. These are just some points to get you thinking.

1. This was all promised in the lead up to the election. This is not new. DJT campaigned on making tariffs the chief plank of his administration. He tends to follow through on his promises. Don’t fault him because he is the first politician to follow through on a promise. Also, please don’t act surprised.

2. DJT’s job as the President of the United States is to do everything possible for the citizens of the United States. He does not give a damn ( nor should be ) about the citizens of Canada, or Mexico, or Zimbabwe for that matter. The President of the United States only answers to the citizenry that elected him or her. It is not only expected, but demanded that the President work to enrich the lives of US citizens.

3. DJT uses tariffs as a bargaining tool – always has and always will. If any of the politicians in Canada were smart enough to pick up a book called The Art of The Deal , then they would know how to handle Donald Trump. That book is a playbook on how he negotiates. You may be wise to hit up Amazon or your local book seller and read it for yourself. You will learn a lot about business, and a lot about making sales. If you don’t close at least 1 more mortgage a year from reading that book, then I will reimburse you for your purchase. Of course, most politicians already think they know everything, so why would they read a fucking book? Whenever DJT comes out swinging with his tariff talk – he wants something. He uses tariff talk to scare the living crap out of you, then goes in for the kill of what he really wants.

4. This is the important one. Media sure as hell ain’t covering it. Yes, tariffs make products more expensive, but since DJT has promised income tax cuts as part of his plan, US citizens will have more money in their pocket to use to pay the higher prices. It goes hand in hand. Yes, he knows that tariffs drive up prices, which is why he is going to use the tariff revenue to lower personal income taxes. I know that lower taxes may be a foreign concept to most Canadians, but taxes can actually go down. Seriously. So, you can stop posting on social media that the US consumer will be broker because of tariffs – they won’t, they will simply have more money due to reduced income tax to pay the tariffs. And, since this will encourage more products to be made in the USA, then more jobs will be available. More jobs equals more working people to fill said jobs, so the cost of things like social programs drop. People who are gainfully employed use less social services which will save hundreds of billions of dollars of government money.

5. Easy fix. It amazes me, actually astonishes me that people are missing the second part of the plan here….. DJT clearly indicated late last night that the tariffs would remain in place until Canada and Mexico got their border secured, and the drug problem under control. Imagine that? Imagine a secure border, and criminals and drug traffickers going to jail. It actually is embarrassing that we have all known about our immigration and crime problem in Canada and our government has done sweet dick all to fix it. It actually took a foreign country threatening us with economic ruin to get politicians to sit up and take note. That is beyond embarrassing. Well, now they have 60 days until inauguration to get it fixed or face the tariffs.

6. Personal opinion here, but I think this actually causes more problems for the governing party than it does anyone else. There is only 2 possible outcomes here: Do nothing, and have a 25% tariff put on every product that Canada exports , thereby crushing the economy. Or option 2 is to actually fix the problem. Well, if they can actually fix the problem in less than 60 days, then it leads people to wonder if it was really that simple, then why wasn’t it fixed before? Why did it take a bully like DJT to stand up and demand it? If the government can actually fix a fucking problem like crime and immigration in 60 days, then what the fuck were they doing for the last 9 years? Awkward time to be a Canadian politician. Either way, people will demand answers from elected officials, and this time the world will be watching.

7. Narcissists gone wild: The next couple of years are gonna be wild. Both DJT and Trudeau have the worst case of narcissism in the world, and JT has to realize that DJT holds all the power now. JT cannot continue doing what he was doing – it will not work against a country like the US. I imagine DJT will win the war of the ego, but that is going to be the next problem Canada will have to deal with. When DJT wins, he feels empowered and goes back for more. This tariff threat will not be the last one Canada faces in the next 4 years. There will be more.

8. If DJT can threaten tariffs on things like secure borders and drug trafficking, what stops him from threatening a tariff unless Canada cleans up its act on money laundering? Can you fucking imagine if Canada had to actually stop allowing money laundering? OMG, without runaway immigration and money laundering through the Big 5 banks there would be nothing left of the economy. For the record, Canada is now the global leader in money laundering.

9. Don’t bank on it. We all know that Canada’s big 5 banks have a massive presence in the US, specifically TD and BMO. Canadian banks have a less than stellar track record on upholding the laws – here’s looking at you TD. Don’t for 1 second think that they will be under the radar now. The time for slaps on the wrist are long gone, and I imagine any bank caught with their hand in the proverbial cookie jar will be made an example of. This matters to mortgage brokers. Banks will have to start clamping down on risk to ensure they are onside all around. Clamping down on risk is bad for brokers. Clamping down is bad for spreads, and bad for risk appetite. If, and it is still an if, but if the US Justice Department, under the new President starts looking for fights, I imagine Canadian banks operating in the US will have a target on their back.

10. The fact that the tariff announcement is such big news underscores the real problem to me. Unfortunately, and as I have mentioned multiple times, Canada has failed over the last decade to really have an economy outside of housing. Since we don’t really build anything, or invent anything, we rely on housing, and US exports. Housing is in the shitter, and now trade with the US may have a large dent placed in it. Had we focused on building world class products, and inventing world class things, perhaps we would not be in such a vulnerable spot today. Social causes are all fine and dandy, but it has really put us at a disadvantage. Imagine if Canada had really exploited our resources instead of capping emissions? Imagine if we had invented world class research labs to solve the problem of tomorrow? Imagine if the best and brightest in the world were immigrating to run world class, Fortune 500 companies headquartered out of Canadian cities? But hey, we got tampons in men’s bathrooms……

11. Drill baby drill. If I hear one more person tell me that the US “needs Canadian oil, and cannot afford to tariff it” I am going to vomit. Yes, the US imports a lot of Canadian oil. However, the US also produces a lot of oil, and is pretty close, if not already energy independent. Under the new administration, drill baby drill is the motto, and they will open up a lot of fracking and drilling to ensure the US does not need to rely on imports. Oh, and even if they did need to import, there are plenty of other options. A ) The US could import from a lot of other oil producing countries not called Canada, or B ) DJT could simply exempt Canadian oil from the tariffs if the US needed it. Again, the balance of power is not with Canada here.

So, there you go. There are some things to think about. I will summarize though with the following:

No matter what, I truly believe that cooler heads will prevail. DJT has a habit of swinging for the fences, and using that shock and awe to get attention. However, this is something that needs to be taken seriously by all parties. It is time for the grown ups to come to the table, and hammer out a deal that will work for all parties. This is not the time for name calling and taking cheap shots at each other. Now the real work begins. With a lot of work, a careful balanced approach, and tackling the hard core issues head on, I truly believe we can make Canada, the US, and Mexico stronger and safer. For far too long, Canada specifically, has allowed major problems to fester. That ends on January 20th.