https://www.bbc.com/news/articles/c8975dx1pe3o
Don't mess with Canada - that's the private message to the US from the very top of Ottawa's political system. Just like nearly a century ago with the infamous American Smoot-Hawley tariffs, Canada got its retaliation in to Donald Trump's import taxes very quickly.
While the White House is claiming Canada's pledge to spend $1.3bn (£1bn) on a border protection plan has given it diplomatic victory in its battle over fentanyl traffic, there was very little conceded that was not already planned by America's northern neighbour.
Crucially, both Mexico and Canada were undeterred by a clear threat in Trump's executive orders that any retaliation would lead to higher tariffs on imports into the US.
After consulting each other, Canada and Mexico instead both negotiated a month's pause with Trump.
Here's what's actually happening.
ReplyDeleteRemember that Canada mistakes saying you're going to do something for actually doing it. Yes, a few weeks ago the government announced it would beef up border security. Guess what? They did nothing. As far as they were concerned, the announcement was all that was needed. And the Americans noticed.
Second, don't mess with Canada? Canada is that annoying friend that you have to hang around with because mom told you too. The Americans are our army since our actual army is small and useless. They defend our borders but we know they can't withdraw from doing that because Russia and China would probably take most of the Arctic from us and the Americans would see that as a threat. So yes, the US is stuck defending us while we respond with ingratitude and threats.
Bottom line - yes, US GDP would drop 1% in a tariff war. Canadian GDP would drop 10% and there would be a massive economic collapse. Don't mess with us!