Quote:
Originally Posted by Traum
I agree it doesn't look good to remove the retaliatory tariffs. As I have mentioned before, at this stage, I'd much rather to just bite the bullet and tough it out, while inflicting as much pain as we can on the US with retaliatory measures. It wouldn't cause massive harm to the US, and it will definitely hurt ourselves more. But it would still cause massive harm to select populations and sectors in the US -- much like how some portion of the US distilled spirits sector is going into bankruptcy.
They need our aluminum. They need our lumber. They need our potash. And they need our energy. We should use these to inflict maximum pain, even if it means we'd be hurting ourselves in the process.
At the same time, I also understand how this could be used as a gesture of good will in furthering the negotiations. So if we do end up getting a low tariff deal as a result -- somewhere in the 10 - 15% range, based on what the UK and EU has managed to get, it would still be a reluctantly acceptable compromise.
If Carney is unable to get that (and continues without any retaliatory measures), then I'd join in on the agreement that he is not a tough enough negotiator and leader.
But I'll reserve judgement for now, until things clear up a bit more.
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To some degree I'm surprised that we backed off on the retaliatory tariffs but I think the state of play has changed as well:
- Other than Canada only China went with retaliatory tariffs and China was prepared to go all out on that fight. Culturally and politically, China was willing to hurt themselves in order to hurt the US and the US has blinked. Canada has access to resources that would really hurt the US but there's no cultural appetite to endure hardship like the China.
- Without other countries playing the retaliation game it's hard to stand up to the bully. When Mexico and the EU backed off the idea it largely meant Canada was standing alone on this.
- We've seen that the US (Trump) is not in anyway logical - they only know how to escalate and extort, they don't know how to negotiate or discuss. In that game state, escalating stakes only works if you're willing to hold your breathe more and we've seen only China has the power to bring the US to its knees (it would have been pretty delicious to see though).
- The impact of tariffs on the US economy has taken a lot longer to filter through so the US wasn't experiencing enough pain to want to negotiate. We're only now starting to see the effects of tariffs on the price of goods and I suspect it'll be 2026 before we really see the pain for US companies and consumers. Bankruptcies aren't going to take off till next year.
So the retaliation card is no longer a useful card to play - it's only useful if the other side will back down and the other side isn't feeling enough pain yet AND they're just plain stupid.
At this point, a continued boycott by Canadian consumers remains the most viable strategy. Dropping US alcohol has hurt and reducing travel has hurt and neither (and others) will affect negotiations.