Another win for Trump I would say.
Stock markets are going to soar tomorrow.
U.S., EU agree to trade deal framework that puts 15% tariffs on European goods
- Thread starter The Oracle
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Another win for Trump I would say.
Stock markets are going to soar tomorrow.
In other words, that is what we will end up with. Except on energy. Which we should surcharge on.
As well as oil. Might as well throw potash in too. Just to even things out.
Please don't tell me you support these sales taxes too?
It can't hurt.
I don't think I have to explain to you that a trillion dollar trade deficit was not sustainable. It would contribute to global economic instability if left unaddressed.
All this will be interesting to see how it develops in practice. I hope that chronic trade surplus countries encourage more consumption. As an American, I would like to see some manufacturers retrench to the U.S. At the margin, this should happen.
I was afraid you were also thinking of oil.
From what I understand, the U.S. is self-sufficient for oil. So essentially Canadian oil that needs refinement in the U.S. has to be competitive at a global price level to be sold abroad. It's a fungible commodity.
PS- I'm not exactly sure what sales taxes you are referring to unless you mean tariffs. As far as Canada, I have not read a good objective synopsis of U.S.-Canadian trade issues. If anyone knows of something void of bias, I would like to read it.
Economics knows no sentiment.
Canadian potash would likely be priced and taxed to a point where potash from outside North America is currently uncompetitive. Raising potash taxes would make global potash more competitive.
It more complicated than that. You have created your refinery infrastructure, both in location and type if oil processed, around Canadian oil sands crude. And it's about WHAT you are making with it. There is serious profit at your end on the petrochemicals.
So imo I have no problem with reducing or eliminating the discount. And using that money to fund infrastructure improvement on our end. You can't turn that industry on a dime.
As for electricity, feel free to build gas plants, and pay more. We are just selling discount excess anyway. We can eliminate the discount, or even reduce it, and in many cases we are still the cheaper option.
It's pretty simple. Anytime the govt collects money from the consumer, or a business, it's a tax. Call it what you want, it's a tax. It's a hiddentax, or an open tax. But it's a tax.
The USA is not going to stop buying our energy. You need it.
We can add it to where we are still competitive. And believe me, others are willing to buy. China tried to corner the market years ago and we shut that down.
China is always buying fertilizer around the world. Like many of the commodities they acquire, they are a disruptive participant in the market. They search around the world for commodities. They buy a lot for a few years and then suddenly they are out of the market.
It sounds strange but it has a lot to do with the weight of the Chinese government in business transactions and a propensity buy up more than they need.
I think you and others have made too much about fungible commodities.
So Canada is a resource based economy. It's what we have a shit ton of. Second largest lass mass nation, only 40 million residents.
4th in oil reserves, I think #1 in fresh water, tones of cheap hydro. We have huge untapped mining. Forestry products. We are never going to be a manufacturing giant.
We had a really good symbiotic relationship. It was not hurting the USA. Isolationism will. You need our raw materials
We send you 100 billion in oil, you made 300 billion in products. The self sufficiency does not include export. It's a loss for you.
We probably do need Canadian oil, but all economic transactions hit a threshold where they become uneconomic. And of course, Canadians need to move Alberta oil to refineries and ports.
There's probably a very good reason why Canada hasn't built up its refinery infrastructure. I am aware of geographic limitations. I believe the Canadian Rockies make moving oil to British Columbia's ports challenging and costly. That's not even mentioning that Alberta oil is low-grade that requires more effort to refine.
I think trying to find ways to punish the U.S. is probably limited by economics as well as U.S. retaliatory power. As I said, I would love to read an objective explanation of U.S.-Canadian issues.
We didn't do it imo because over time a long term strategic strategy was created. Former govts on both sides had an agreement on creating a free trade zone that actually did benefit both parties. And so business infrastructure was created to facilitate that. It was also about security for domestic production of core essentials. While still allowing for each dude to have small protectionism for domestic votes, and national interests.
It really started with the original auto pact that led to the original free trade agreements. Similar, but smaller to how a trucking agreement between France and Germany led to the EU(look it up). There wasn't a problem. Trump created one. The USA had far larger problems with China and other nations then us.
I truly believe it is personal, and had to do with Trump Tower failures in Canada, a very personal hatred for Trudeau, and I think more dating back to the eighties when he may have been denied business opportunities in Canada.
While pragmatism is nice, Trump wants more. He wants capitulation, not cooperation. That's not going to happen.
Or to put it simply, have you actually entertained the notion the reason you haven't seen a rational explanation for all this, is because there just isn't one?
I'm sure Americans are very happy with this and the deals he's getting. Closed up the borders, stopped trans from competing with women and more. But Not good for Canada.
You haven't seen the inflation reactions. The tourism drops. The real estate drops. The mass layoffs happening. Americans are not as happy as you think.
I'm awaiting the 2nd quarter numbers.
The big thing being his is essentially negotiating a 15% sales tax on all imported good to the USA at this point.
Imports cost americans $100 billion more last month.
Such a big win.
The 2nd quarter numbers are projected to be good. The first quarter numbers were impacted by inventory swings that tend to reverse themselves.
Now of course if you wait long enough, there will be a recession. It's just the nature of economics. This economic cycle is long in the tooth and the Fed is keeping money tight.
