Dem 47
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GOP 53
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The Trade Wars Have... Been Paused

In case you were living life on the edge, and decided not to stock up on Nanaimo bars, Timbits, banderillas or cacahuates Japones, your devil-may-care attitude has been sustained—for now. That is because the trade war against Mexico and Canada has been paused for at least 1 month.

Let's begin with a basic chronology of events. This Saturday, as he had promised, Donald Trump slapped 25% tariffs on everything coming into the U.S. from Mexico and Canada, except Canadian energy, which was supposed to be hit with a 10% tariff. China was also hit with a 10% tariff. At that point, approximately 100.0% of people who follow politics sat back, bit down on a hard piece of wood, and braced themselves for bad news from Wall Street.

Trump's knowledge of macroeconomics is not exactly Nobel Prize-level, but even he clearly understood that the markets were in for a bumpy ride, going so far as to send out a message on his unsuccessful social media platform in which he asked (rhetorically) "WILL THERE BE SOME PAIN?" He answered his own question with a "YES," but promised that it would be worth it, because in the long run, "WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID. WE ARE A COUNTRY THAT IS NOW BEING RUN WITH COMMON SENSE—AND THE RESULTS WILL BE SPECTACULAR!!!"

Late Sunday, Dow Jones futures and other predictive indices suggested a bloodbath was coming. (Z) even made a bet with a reader that the Monday drop in the DJIA would be over 800 points. When the markets opened yesterday, things proceeded as expected:

The market was down
about 500 points by 10:30, then jumped back up to a point where it was down 100 points, and then hovered at that point
for the rest of the day, ultimately closing in the red

As you can see, about an hour after the NYSE opened, the DJIA was down close to 500, and (Z)'s bet was looking very good. Then, very shortly thereafter, Trump announced that he'd reached an agreement with Mexico's Claudia Sheinbaum, and that he would pause the Mexican tariffs for 30 dyas. Thereafter, the markets bounced back. Later in the day, he announced an agreement with Canadian PM-for-now Justin Trudeau had also been reached. And so, at close, the DJIA was only down about 100 points. So, there goes $20 (Z) will never get back.

Thereafter, Trump claimed that he was not influenced by what was going on in the markets, telling reporters: "I don't know. I don't think about it." Pfft. Horse hockey. If he said, "I knew that would happen, and was determined not to set policy based on the vagaries of the stock market," that MIGHT be believable. But "I don't think about it"? Please. Every president thinks about it, with a focus that borders on obsessive. Remember back during Trump v1.0, when the DJIA kept breaking records, and Trump kept tweeting about it? OF COURSE he thinks about it.

You presumably don't need us to tell you that Trump took a victory lap yesterday, and that the MAGA crowd spent the day celebrating his "win" and laughing about how quickly Mexico and Canada surrendered to The Donald. What you might need us to tell you is exactly how reasonable this understanding of events is. The executive summary: Trump and his acolytes are full of it.

The concession that Sheinbaum gave, per Trump, is that Mexico would send 10,000 troops of the Mexican National Guard to help secure the Mexican-American border. The concessions that Trudeau gave, again per Trump, were that Canada would appoint a "fentanyl czar," set up a joint US-Canada border task force, and spend $1.3 billion on helicopters and technology to help secure the Canadian-American border. Here is a list of reasons to look askance at this "haul":

So, Trump's "win" is that he got Mexico and Canada to agree to do some things they had already agreed to do prior to the trade war, and he also secured the creation of a meaningless task force and a meaningless fentanyl czar. Winning? We don't see any way you can answer that question with "yes."

Meanwhile, whether Trump knows it or not, and whether he cares or not, there are some prices to be paid for these shenanigans. Note that the market, while not down big yesterday, was still down. And the DJIA futures, as of 2:00 a.m. PT Tuesday, suggest it will be down again today. The markets do not like tariffs, and they really don't like uncertainty. Now those folks get to spend 30 days wondering what is coming down the turnpike. It could literally be anything, from "Trump conveniently forgets about the trade war" to "Trump announces that the 25% tariffs are in full effect, re-launching the trade war." Who knows?

In addition, the leaders of the world are watching. When Trump threatens tariffs, and then backs down immediately, after he's been given meaningless concessions, then everyone takes notice. Like the boy who cried wolf, every time The Donald goes to that well, he will be taken less seriously. He is rendering impotent his very favorite weapon.

Finally, Canada is in the running for the title of "America's closest ally," and the U.S. relies on that nation to be a partner in a great many ways. The more often that Trump decides to pi** on the folks in the Great White North, the less amenable to cooperation they become. To help illustrate, we thought we would share this message we received yesterday from reader D.J.M. in Salmon Arm, BC, Canada:

So Trump has "paused" tariffs. As Electoral-Vote.com has previously noted, TCF makes outrageous claims, backs off, and then eventually claims the greatest deal ever. However, I believe in this case, he is hurting Americans more than your friendly northern neighbors and the aftereffects will be enduring,

First, trade and tariffs are a two-way street. Each country has their own interests that have always been brought to the negotiating table and, following some give and take, an agreement is made. Oblivious to diplomacy, TCF unilaterally announces changes, based upon a number of blatant falsehoods, to an agreement that he previously negotiated. Of course, it will eventually work out to be the "best deal ever."

The difference this time is the fact that TCF is repeatedly insulting to Canadians in his rhetoric. His disrespect has not been taken kindly across the country and has quickly united Canadians in a response that will be outside of any trade agreement, and long lasting. Numerous articles in mainstream media, academia, and across all of social media are educating Canadians of the origins of the products we regularly buy. Many, including myself, are making permanent changes to our purchasing habits. Canadian companies are highlighting themselves on store shelves with "made in Canada" stickers:

A made in Canada tag, with a big
maple leaf

Other reactions include booing the American national anthem at all professional games (basketball and hockey) played on the weekend, cancelling cross-border trips (Panama is looking like a nice winter getaway now), and re-directing goods and materials to alternate markets where possible.

While our cross-border trade differences will eventually work themselves out, the treatment of Canadians, and the consequences, will take much more time. Much of TCF's idiocy is hilariously illustrated by Canadian artist Michael de Adder. Sadly, many of TCF's insults will be reflected in Canadian attitudes to Americans in general. So, in true Canadian fashion, I will say I'm sorry for that, and Electoral-Vote.com will remain my primary source of rational American thought. However, we won't be invading any time soon, and we want Michael J. Fox back.

Thanks, D.J.M.! And let us point out that Canada has an election that will take place on or before October 20 of this year. In a climate like the one described above, the new party in power/the new PM could well be elected on a platform of "we will stand up to Donald Trump." So, the President could soon find that he's dealing with an even tougher opponent across the bargaining table. Not that he's ever had much luck getting anything out of Justin Trudeau, mind you.

Oh, and in case you are wondering, the trade war against China is still on. There have been no negotiations, apparently, and there has certainly been no pause announced. And the Chinese government has already announced retaliatory 15% tariffs on U.S. coal and liquified natural gas that will go into effect on Monday of next week. So, there's always that to keep the markets on edge, while we wait to see what happens with Mexico and Canada. (Z)



This item appeared on www.electoral-vote.com. Read it Monday through Friday for political and election news, Saturday for answers to reader's questions, and Sunday for letters from readers.

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