Appeal to Heaven

So Doug Ford has taken $75 million of taxpayer money, and spent it to undermine trade talks with the US.

While Carney is chumming with China.

It is as though Canadians have a death wish. We are like ungrateful, spoiled children. 

We cannot blame our leaders. We recently voted Ford and Carney right back into office to do this, to fight America instead of make a deal.

This is well calculated to kill Ontario’s auto industry, and force Alberta to separate.

It seems of a piece with our placid acceptance of multiculturalism, of mass immigration, of a prime minister who claims there is no such thing as Canadian culture, and of outrageous land claims and claims of genocide by the native peoples.

Come back, Bond Head. All is forgiven. We are not capable of self-government.

The Trade Wars

 

I cannot vouch for its accuracy, but I hear reports that, in response to Trump’s new “reciprocal” tariffs, at least seventy nations have offered to cut their own tariffs and restrictions in order to have them removed or reduced. And only two nations have responded so far with retaliatory tariffs: China and Canada.

Until now, the US has looked on Canada, if they thought of us at all, as their best friends. Cousins across the border.

I’m afraid we are revealing ourselves as secret enemies.

Shame on us.

So Long, Canada. We Hardly Knew You

 

Big Pink

The world is mad. It has always been mad, but something snapped around 2020.

Canadians are in terminal Trump Derangement. They are prepared to burn down the country out of spite.

Trump and the USA of course have every sovereign right to impose tariffs at their border. This is not a hostile act. 

Trump is not threatening to annex Canada. That is paranoid fantasy.

It is insane for Canada to impose retaliatory tariffs. We cannot win a trade war with the USA. The sane course is to negotiate 100% free trade instead. But no Canadian politician dares say this. Instead, we will just stand there and pour gasoline all over ourselves, then light a match.

Unless things change dramatically in three weeks, Canada is about to re-elect the Liberals under Carney; with a majority government. 

Right-wing commentators are as delusional as everyone else, insisting that the polls must be wrong.

With the Liberals’ environmentalist agenda blocking the development and transport of Alberta’s energy resources, Alberta is then planning to hold a referendum on secession. 

It is likely to pass, with the Liberals in power. But Easterners all still insist on voting Liberal.

If Alberta separates, Saskatchewan is likely to follow. BC will probably need to go too.

If this happens, Eastern Canada will be left an impoverished rump. 

Trump gets his best case scenario: he can admit the resource-rich West to statehood, and get full access to their resources. He need not let in all those left-leaning voters in the East.

Congratulations, Canada. Darwin would be proud.

Trump's Grand Strategy

 

A map of the contiguous 55 states.

Trump’s foreign policy moves—wanting to annex Greenland, wanting to annex Canada, wanting the Panama Canal returned, wanting to take Gaza—might seem random outbursts, back of the envelope ideas. But they all make sense on one strategic principle.

Trump is preparing for war with China or perhaps a China-Russia coalition. He is not inclined to be caught flat-footed, as Britain was in 1939.

This is just as well, since China seems to be preparing for war, and Russia has already started.

Trump needs Greenland as a source of rare earth minerals, necessary for chip production. China has the other great cache of rare earth, and the US as well as the rest of the world is currently reliant on them. Doom in case of war.

Denmark is just not big or strong enough to protect Greenland and its sea lanes if China or Russia struck first. Perhaps the US could take it back, but that’s a much more difficult proposition than defending it well in the first place. And taking it back is not enough. Mines must be developed and a supply chain set up in advance of conflict. Otherwise American will not be able to make the weapons needed to take it back.

The same applies to Canada’s North. It too is rich in minerals, including strategic oil and uranium. Like Denmark, Canada is not strong enough to defend this vast territory. And on top of oil and minerals, the Northwest Passage may soon become more navigable—if not due to global warming, due to improved icebreaking technology. This could then become a critical supply route for both the US East Coast and Europe—a shorter route than the Panama Canal. But a route vulnerable to Russia nearby.

Supply routes become critical in time of war. Britain defeated Germany in both past wars largely due to blockade; while Germany’s best hope was cutting off the North Atlantic convoy with their U-boats. Britain always pursued a similar strategy of owning the choke points for trade: Gibraltar, Suez, Singapore, Quebec, Aden, the Cape of Good Hope. America cannot rely any longer, as it once could, on a strong Britain to keep trade routes open.

And so too the importance of the Panama Canal. The US needs to hold that choke point, and keep it away from China. Panama cannot defend it. It connects the American East and West coasts.

And now look at Gaza. Note how close it is to the Suez Canal. A US military base in Gaza is at least in easy striking distance—across good flat tank terrain, let alone in bomber range. The US does not need Suez for its trade—but Europe does. Thus Trump should want to control it, both to protect Europe and, if necessary, to keep Europe in line.

This is also why Trump has just declared 25% tariffs on steel and aluminum. These are strategic materials, needed for tanks, artillery, airplanes, ships, shells. America cannot import their steel from China, fostering that industry, while their own withers. And it is better not to rely on vulnerable and not entirely reliable Canada either—unless Canada joins the union, with the US armed forces to build and maintain strong defenses.

Canada not entirely reliable? No; Justin Trudeau has demonstrated that to the Americans. Canada can elect governments with Chinese and totalitarian sympathies; and Americans remember Cuba. Canada has proven vulnerable to Chinese and Indian espionage and influence over its electoral process. Canda is letting in a lot of immigrants who may not be democratic or pro-Western in their allegiances.

I used to be a firm believer in free trade. But its advantages are gone in case of war. America’s great advantage has always been its massive industrial production and self-sufficiency, protected behind oceans from sudden attack. It could always win a long war. Trump must restore that massive industrial production and security of resources to make America safe again. 

Once we see the strategy, we can perhaps predict Trump’s future moves. One can expect him to act quickly and decisively to bring chip production onshore from Taiwan and Indonesia. Expect big tariffs here. I would not be surprised if he offered Denmark statehood, during Greenland negotiations, in order to control the entrance to the Baltic Sea.

Other ideas are welcome in the comments.

Tariffs Postponed

 

The Trump tariffs on Canada and Mexico—and their counter-tariffs—have been averted for at least a month. But I am sickened now by the endless posts I see on X saying “Trump blinked,” or “Trudeau backed down,” “Trump got nothing,” “Trudeau bent the knee,” and on and on. It seems to me a display of pure human evil. These people want to dominate others. 

The proper understanding is that Trump and Trudeau have managed to reach a deal satisfactory to both. Thank God,l for both our countries.

We should not want to fight. We should not be so eager to turn on our friends.

How Canada Falls

 

I think Trump is serious about annexing Canada. He’s been harping at it, recently referring to Trudeau as “governor of the great state of Canada.” 

Trump is moving the Overton window, He’s forcing the discussion. He’s done this before. Eventually, it becomes the standard wisdom. Remember when building the border wall was a crazy idea? And it was racist to object to illegals? 

The annexation makes every kind of sense from the American perspective. It is ultimately the only way to secure the northern border. 

Trudeau, predictably, is reacting in the worst way possible, from Canada’s point of view. He always wants a fight; this is how he reacts when challenged. And he does not care what damage he does to Canada; as noted in a recent column, as a narcissist, he probably wants to burn the place down because it is no longer inclined to vote for him.  

Trudeau is idiotically threatening to raise tariffs on American products coming into Canada as retaliation; rather than trying to reach accommodation.

In any trade war, Canada is bound to lose. Canada’s economy depends far more on trade with the US than the American economy depends on trade with Canada. The trade war will probably crash the Canadian economy, and soon have Canadians begging to join the US.

As it stands, an online poll has Canadians evenly split on whether they’d rather stay independent or join the US.

Trudeau’s intransigence may be part of Trump’s calculations. He might have expected this reaction. As a skilled negotiator, he probably studies his opponents’ weaknesses. He seems to be deliberately provoking Trudeau to do something stupid. 

I can see it happening. This or that individual province votes to join the US. The US then piles forces in, forestalling any action by the federal government. If any province but Nova Scotia, PEI, BC  or Newfoundland make this move, they cut Canada in half, making it unviable. 

I’d put my money on Alberta going first.

Poilievre might yet right the ship; but I think it is going to happen. 

I Think He's Serious

 

Someone leaked Trump's comment at his recent meeting with Trudeau, suggesting Canada become the 51st state. 

Why was this in particular leaked, and nothing else from the meeting?

Actually looks like a trial balloon.

Trump has since posted this on X:

Yeah, could be a troll. 

Bet it isn't. He's certainly forced the idea into the public discourse. Trump knows how to move the Overton window. Remember when building a border wall was a crazy idea?

Was Manifest Destiny Really Such a Bad Idea?

Report has leaked that, at their recent meeting in Mar-a-Lago, Justin Trudeau argued that Trump must not impose his proposed 25% tariff on Canada, “because it would wreck Canada’s economy.” To which Trump reputedly responded, “if the Canadian economy can’t survive without ripping the US off for $100 million a year (or whatever the figure was), maybe you should just become the 51st state. You could be governor. 

And everyone is taking this as a joke.

Is it?

And is it a bad idea?

Let’s consider it from Trump’s point of view. People, including me. have been assuming that his threat of 25% tariffs was just a gambit to open negotiations. But Trump has also said he wanted to finance the government with tariffs rather than income taxes. So the high tariffs fit in with his plan. Why would he sacrifice it for Canada’s sake? America first!

Trump is also concerned with legacy. He has already floated the idea of buying Greenland. High tariffs could indeed force Canada to plead for union. Trump would have more than doubled the land mass of the US, outdoing Thomas Jefferson’s Louisiana purchase, and surely earning him a place on Mount Rushmore.

(Much easier to do, by the way, with modern AI and 3-D modelling. They are already being used to carve stone decorations for building exteriors. Not the major undertaking it was for the president already there.)

Annexing Canada makes huge sense for America’s national security. It secures vast strategic resources and control of the Arctic, more urgent with global warming. Canada is incapable of securing the Arctic for itself. By joining forces, on the other hand, America becomes stronger and better able to defend our joint interests.

Canada has, after all, been a useless military ally in recent years, underspending on its defense and relying on the US taxpayer to defend it. Why should the US put up with this?

The argument against annexation is that Canada is politically more left-leaning than the US; so giving 40 million Canadians the franchise would be bad for Trump’s Republican Party. But this might not deter Trump personally, since he is not running again. Moreover, Trump has shown an ability to alter the electoral map, and appeal to new coalitions of voters. He has won over most of the working class; of the rust belt; he has drawn Hispanics--all formerly considered bedrock leftist constituencies. He seems to me to already be in progress of winning over Canadians. “Maple MAGA” is becoming a thing. Why not? The Republican party is being remade in Trump’s image. Trump’s agenda has really never been either clearly traditionally left or right.

One might worry that there would be much unrest among the local population if the Americans took over. It would have to be voluntary. But the tariffs could do a lot to convince Canucks of the need.

Why, given all this, would Trump back down on his tariffs? As a personal favour to Justin Trudeau?

Where's that laughing emoticon when I need it?

Now let’s look at it from the point of view of Canadians. Why not? What is the argument for Canada remaining independent? After all, the two countries share the same language (but for Quebec), the same culture, the same geography, the same history. Nova Scotians have at least as much in common with the people of Maine as they do with those of Quebec; or as Maine does with Louisiana. It has often been observed that British Columbians have more in common with, and more common interests with, the people of Washington or Alaska than with Newfoundlanders. Anywhere else on the globe we would probably be one country. 

The sole reason Canada became independent was loyalty to the British crown and the British connection. The British connection evaporated for all practical purposes in 1932 or so. Since then, there is only the sentimental attachment to the Royal Family. 

How much is that worth?

Canadians, if they joined the US, would not lose self-government. That is the beauty of the federal system. Canadians can continue to tend to their own Canadian affairs within the wider union. Rather, joining the US gives greater assurance of self-government. As we have seen recently, Canadian governments can go rogue and trample human rights. The Americans have a longer and culturally stronger tradition of democracy; with union, in such cases, the feds could step in. Just as Eisenhower sent in the national guard to desegregate Arkansas back in the day. Moreover, with greater ease of movement, Canadians could more easily escape a repressive local or regional government. One could always easily move to Florida, say, or some other given state whose policies suit you better. You can do this now to a more limited extent within Canada, but the choices are far fewer. Historically, Americans have always found it easier to move about than Canadians have.

Joining the US gives a greater measure of self-government in another sense too. It is a reality that who is in power in the US, and what policies they pursue, matters vitally to Canadians; arguably more than their own government. This is true for the entire Western world, but to Canada more than anyone. Nevertheless, as things stand, Canadians have no vote on who is in power in Washington, or what policies they pursue. We would surely be better off with representation.

And what are we paying for independence? Canadians have almost always made less than Americans on average, and everything costs more. Opportunities are much fewer for those hoping to rise to the top of their profession or business, without full access to the vastly larger US consumer and job market. We are paying a huge premium merely for a sentimental attachment to the British monarchy.

And if Trump imposes a 25% tariff across the board, that premium becomes dramatically greater. We already seem skidding into Third World status under current government policies; this would cast the die.

Let's see: Canadians, how about better pay, more opportunities, lower taxes, cheaper food and housing, and easy escapes from winters in Florida?

Canada is surely too large to be admitted as one state. Granted, the population is about the same as California, the biggest current state. But with its land area, Canada could soon have a much larger population. Besides, you really must recognize the distinctiveness of Quebec.

Ten states might be too generous. Five makes the most sense: BC, the Prairies, Ontario, Quebec, and the Atlantic Provinces.

The assimilation of Canada might start a trend: for many of the same arguments apply for the rest of the English-speaking world. Once, it might have made sense to have separate governments, because of distances and poor communications. Today, everyone in Australia knows everything that is going on in Canada, instantly, and everyone in the US knows and cares about everything that is going on in Britain. Separation is increasingly artificial and undesirable.

Prices Will Go Up!

 

Since the call came down early this morning, I have encountered three leftists lamenting their loss to Trump. What most concerns them surprises me.

“Prices will go up,” one says. 

“Don’t those stupid people realize it is not China that pays the tariffs? It’s the consumer!” another says.

So they don’t fear some Trump Nazi dictatorship, or the supposed loss of abortion rights. Those were just a cover story for the rubes, I guess. Of course they were: those were absurd on their face.

It is tariffs.

But then, how can their concern really be that prices will go up? After all, prices held steady through Trump’s first term; they went up dramatically under Biden. Their guy.

It is not prices. It is tariffs.

And not just any tariffs either.

After all, not long ago, it was the left that was opposed to free trade. The Canadian Liberal Pary lost my support over just that issue. 

The only way I can see this making sense is that they fear tariffs will hurt China, and they are secretly rooting for China to defeat the evil capitalists to show that the Marxist system is best.

To be fair, not just China. They of course also want tariffs and trade barriers on Cuba dropped as well.

Trump does says he wants to impose more tariffs. It does seem common sense that this will raise prices. I have always been a free trader myself. But I am open to Trump’s arguments.

If it will raise prices, it will do other things as well. I was convinced by Trump’s argument for tariffs on steel: it is strategically important not to rely on some foreign source for essential materials. This makes you vulnerable to blockade in time of war. Or, as we have seen recently, times of epidemic.

It will further encourage more manufacturing, and more economic activity, at home. This is Trump’s current  argument. Things may cost more money, but more of the money stays in the USA, instead of being drained away to China or some other nation. When you look at it in those terms, of the economy as a whole, might tariffs actually conserve, i.e., save, money? Don’t you save money by keeping it in the household, making your own things, darning your own socks, growing your own garden, instead of spending it at the store?

And Trump has raised another issue. The extra money from tariffs goes to fund our government. Trump suggested this might even replace income tax.

The argument that tariffs are being paid by the consumer, not by China, is being made by the same people who keep selling or buying the idea that taxes on “big corporations,” or a raised minimum wage, is money taken from the corporation, and not the consumer. Same to same.

So the real question is whether it is better to pay your taxes as tariffs, or as income tax. The foreign goods actually remain the same price. 

Paying taxes on consumption rather than income  is more voluntary, and that seems a good thing. Taxing income naturally serves to suppress initiative or hard work, and takes money the individual might have better use for—such as investing it to improve their business, hence the economy. With a tax on consumption, you can reduce your tax burden by reducing your consumption of foreign goods. It encourages saving and investing rather than spending.

Granted, an economy needs consumers as well as producers. But on balance, surely someone who overproduces is more valuable to the economy and to the rest of us than someone who overconsumes. And if producers can be found abroad, as now, surely consumers can be too.

The idea is worth a look, and perhaps a trial.

The Growing Security Threat of Canada

Made in China?

What is the deal on the US tariffs on Canadian steel and aluminum? Since when is Canada a security concern for the Americans?

Wilbur Ross, US Commerce Secretary, recently explained to a US Senate hearing.

To begin with, let us concede the strategic importance of maintaining a healthy domestic steel and aluminum industry for the US. In case of war, if any country does not have a secure domestic supply of these materials, they will soon be unable to manufacture armaments. American strategy is always to count on a long war, and to win through America’s vast production capacity. A lack of raw materials, therefore, makes the US a sitting Norwegian duck.

Now, granted, relying on Canadian sources for aluminum and steel is still secure. Nobody other than the US is likely to be able to invade Canada, Canada is unlikely ever to be on the other side in a war, if they were they could be conquered by the US in a week or two, and the roads and rails from Canada to the US are secure.

The problem is, the US cannot be certain Canadian steel is Canadian steel. Canada is letting Chinese steel in at low prices. This can then be transshipped to the US as Canadian steel, bypassing any tariff against China. At the same time, of course, by allowing this, Canada is letting its own steel and aluminum industries decline, so that they will not be available to the US in time of crisis.

Accordingly, if the security concerns are valid, which they seem to be, the US had no choice but to include Canada in the tariffs.

Ross further claimed that the Canadian government was apprised of this issue, and given the opportunity to impose their own harmonized tariffs on Chinese steel, over a year ago. That would have let Canadian aluminum and steel preserve its US market. The Canadian government had their choice, and they chose trade war with the US, presumably for the sake of preserving their trade relations with China. Understandable, perhaps, but you can’t blame the Americans.

One might imagine an alternative system which could clearly and indelibly identify Chinese steel as Chinese steel on entering Canada, so that it could not be re-shipped without hitting the US tariff protection. But it is hard to imagine how that could be done with a material. It would almost need to be coded into every molecule.

So there is no solution but this: either Canada enters a trade war with the US with devastating effects, in particular for Canada, or Canada makes the concession here. And the Canadian government and media stops playing political games.

Canada - US Trade War

Now Donald Trump has harsh words for Justin Trudeau. Harsher than the words he is prepared currently to use about Kim Jong-Un. Trump has called Trudeau “dishonest and weak.”

I can sympathize with Trudeau. His actual remarks, which set off the Twitter storm, were pretty much business as usual; they sounded familiar to any Canadian. Canada has been “insulted.” Canada would be “firm.” The US was being “unjust.” Trudeau as Canadian prime minister thought he had free license to poke the US in the eye whenever it seemed to be to his domestic political advantage, and the US, an indulgent big brother, would ignore it, swallow the insult, and look the other way.

The problem is, Trump has never been prepared to simply accept business as usual. As the US media has found out. Trump’s whole appeal is that there is going to be no more “business as usual.”

Canada’s advantage has always been doing a good job of keeping tabs on happenings down in the USA. If Trudeau’s government was really caught by surprise here, it is a stunning bit of incompetence.

It is not just Trump. His advisors Larry Kudlow and Peter Navarro were ready to immediately go on the US networks and use extremely undiplomatic language: “a special place in hell.” “Stabbed us in the back.”

Sure, they had license from above to talk that way. They were instructed to talk that way. But I don’t think they would have been so dramatic, public, and vocal if they did not themselves believe it. Americans are fed up with this sort of stuff. That’s why they elected Trump.

Time for Canada and everyone else to wake up and realize the game is over.

In a press conference, Trump has laid out his case: he is no protectionist. He is for free trade. He wants all tariffs and subsidies gone.

But what we have now is everyone else milking the US, getting free access to the US market, but then getting to set their own tariffs and subsidies. Trump cited a 260% (or something like that) tariff on US milk and dairy products entering Canada.

We all know about that, don’t we? Maxime Bernier ran against those tariffs. Yet Trudeau never mentioned them in his public comments.

If that is the position Trump presented to Trudeau during the talks—and I think we can assume that it was—you can understand his anger. Trudeau is falsifying the issue, and falsifying Trump’s position. It does indeed seem like “bad faith.”

Trudeau’s government can go two ways here: it can get involved in a trade war, with ever higher tariffs. Wrecking the Canadian economy, while possibly also somewhat inconveniencing the US. Or it can agree to cut existing tariffs. To the benefit of both sides, including all Canadian consumers.

Unfortunately, it has officially chosen the worse path.