Oh yeah?

First, it was “on Day One”. The February first. Then the 4th of March. Now it’s April second. Or maybe March 12th.

Nobody knows what Donald Trump will actually do to spank Canada (and Mexico) with fat tariffs. The latest news is that a 25% shellacking will hit us the day after April Fool’s. But the boy has cried wolf three times already. And this is an irresponsible, capricious, disrespectful way for the Leader of the Free World to operate.

Of course, after the US voted with Russia, North Korea and Belarus, and against Europe and Ukraine at the UN, Trump is no longer that global leader. Just another craven, reckless politician who wishes he were a dictator, and will act like one anyway.

But what of these tariffs? What gives? What’s it mean?

Technically the 25% hit on steel and aluminum is still on the books for mid-March. Fuzzy is the timing for retaliatory tariffs the US plans to enact against every country with its own set of import duties (that includes us). And the special anti-maple and anti-Mex levies are, as suggested by the White House this week, now to arrive in April.

This has vexed governments, central banks and made it impossible for long-term business planning or investment. The tariffs are hurting us and they don’t even yet exist.

Last Friday the guy in charge of the Bank of Canada stood in a hotel ballroom in Mississauga and explained what will happen when Trump drops the hammer. Tiff Macklem is not a politician. He’s not a partisan. Not beholden to the government. And he’s backed by the most formidable economics team in the country. Besides, he’s just come off an historic accomplishment, which was to turn 8% inflation into 1.8% by jacking up rates and not causing a recession or big layoffs.

That’s called a soft landing. It is the Holy Grail of monetary policy.

But then came Tariff Man. The 51st state declaration. And the economic pressure. Now, says Tiff, “we face a crisis.”

This is not bankerly language. But it gets worse. The guys in charge of our money supply, inflation, interest rates and (largely) economic growth have the willies. It’s getting real.

“The economic consequences of a protracted trade conflict would be severe,” Macklem said. “But it would be a very different shock than the Covid shock. In the pandemic, we had a steep recession followed by a rapid recovery as the economy reopened. This time, if tariffs are long-lasting and broad-based, there won’t be a bounce-back. We may eventually regain our current rate of growth, but the level of output would be permanently lower. It’s more than a shock—it’s a structural change.”

Whoa. “Permanent”? This would cause a “structural change”?

Yup. That’s what the nation now faces. After all, Canada’s economy is dependent on us selling almost $600 billion worth of stuff outside our borders, 77% of which goes directly south. A blanket tariff on all that would be like a duet by Drake and Adele. Unbearable.

Household incomes will be cut, Macklem says. Retaliatory tariffs (which everyone agrees on, including PP and Carney), “would raise the prices of many consumer goods. As a result, consumer spending on everything from cars to entertainment and housing would slow.”

Consumption would slow. Economic expansion would turn into contraction. Canada would go into recession later this year, and all growth for years would be wiped out. Inflation would return at the same time – the result of more expensive imports, a crashed Canadian dollar and supply chain mayhem like we saw during the pandemic as production is cut.

Of course, the biggest impact of recession, a pullback in consumer spending, reduced business investment and halting production is job loss. Layoffs could be epic if Trump does what Trump says. Maybe two hundred thousand people in the car biz alone. Real estate could be hollowed out quickly. Retailers greatly affected. It’s certain the Bank of Canada has an estimate of the jobs carnage, but it ain’t saying. Too scary. Too politically-charged.

And what if these tariffs last as long as the orange guy is in office? Until 2028?

“If US tariffs play out as threatened, the economic impact would be severe,” Macklem told his audience. “A protracted trade conflict would sharply reduce exports and investment. It will cost jobs and boost inflation in the next few years and lower our standard of living in the long run. The uncertainty alone is already causing harm.”

It was never about fentanyl. Never about migrants. Nor the border. Canada – loyal friend, ally, brother-in-arms and home to hockey fans who once sang the US anthem in full when the arena sound system fritzed – has been insulted, mocked, threatened and now damaged. It’s not just unearned and unfair. It’s war.

I see the petition to strip Elon Musk of his maple citizenship now has two hundred thousand names on it.

He responded on X: “Canada is not a real country.”

Come and find out, tough guy.

About the picture: “Me and Rudi went to the bank to take out some cash one Sunday at the ATM,” writes Kim. “Rudi sat beside me, intently watching the door.  Another customer came in and said ‘I see you brought your body guard with you’.  I laughed.  We would go everywhere together, he was the kind of dog people liked, or they didn’t but he sure got a lot of compliments wherever we went.  People would stop their cars to tell me how beautiful he was… and he was inside, and out.”

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2025/02/27/oh-yeah/