Quotulatiousness

July 19, 2025

Trump administration records huge increase in tariff revenues

Filed under: Government, Media, Politics, USA — Tags: , , — Nicholas @ 03:00

Oddly, most of the coverage on the US government’s surge in tariff income fail to emphasize two relevant facts: first, that the money is largely being paid by American consumers and second that it’s a surge driven by the fact that higher tariffs will kick in soon. J.D. Tuccille reports:

I have no idea where I saw this meme, but it makes me laugh

Last Friday, U.S. Treasury Secretary Scott Bessent took a victory lap as his department reported an unexpected increase in receipts from tariffs. The revenue undoubtedly came from a surge in imports to the U.S., which led to payments that filled federal coffers. It would seem to be a win for an administration that has staked an awful lot on waging a trade war with the entire planet to (take your pick) redress wrongs done to America, raise revenue for the government, and encourage domestic manufacturing and employment. But that victory lap comes too soon; the tariff windfall more likely represents efforts by U.S. firms to accumulate inventory before tariff rates rise even higher.

[…]

That mention of “higher prices on imported goods paid by US consumers and firms” deserves to be emphasized because it highlights the fact that tariffs are taxes on Americans. Ultimately, most of the burden of high rates is shouldered by companies and individuals within the U.S. As the Tax Foundation’s Alex Durante pointed out in February, “rather than hurting foreign exporters, the economic evidence shows American firms and consumers were hardest hit by the Trump tariffs”.

The Yale Budget Lab agrees, estimating in May that “the price level from all 2025 tariffs rises by 1.7% in the short-run, the equivalent of an average per household consumer loss of $2,800” in 2024 dollars. In particular, the Yale economists found “consumers facing 15% higher shoe prices and 14% higher apparel prices in the short-run”.

Even Walmart, which had vowed to absorb as much as possible of the tariff burden, conceded two months ago that prices would have to rise because of the trade war.

This week, the Federal Reserve Bank’s “beige book” noted that “in all twelve Districts, businesses reported experiencing modest to pronounced input cost pressures related to tariffs” and that “many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges”.

Penn Wharton’s concerns, mentioned above, about “lower economic growth” are shared by the Tax Foundation and by the Yale Budget Project. The Tax Foundation’s Erica York and Alex Durante forecast that the Trump administration’s tariffs would “reduce US GDP by 0.8 percent” before taking foreign retaliation into account. Yale economists see a similar GDP reduction of 0.7 percent.

If the courts issue a final ruling against Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs, that will reduce the negative effects on the economy. But it will also take a chunk out of the revenues the administration expects to collect.

So, Secretary Bessent’s victory lap on tariff revenues was a little premature. And so are hopes that the trade war won’t damage commerce and the U.S. economy.

July 1, 2025

The Food Professor explains what Trump got right in his Trade War

Filed under: Cancon, Economics, Government, Media, Politics, USA — Tags: , , , , , , — Nicholas @ 03:00

On the social media site formerly known as Twitter, Dr. Sylvain Charlebois, aka @FoodProfessor explains how Trump’s Trade War strategy is working out for US interests, in contrast to the Trudeau/Carney governments’ approach:

The Globalism Hangover: What Trump’s Trade War Got Right

“Trump’s bombastic style aside, his nationalist approach to trade and food policy is forcing global institutions to justify their existence — and that’s a conversation Canada can no longer afford to ignore.”

For the past six months, President Donald Trump’s trade policies have been widely mocked, criticized, and condemned. Some of it is certainly warranted. The Wall Street Journal, for instance, recently likened his tariff-heavy approach to global trade as a direct path toward another Great Depression. But data out of the United States tells a more nuanced story — one that challenges conventional wisdom.

Despite persistent headwinds, the U.S. economy continues to outperform expectations. The Federal Reserve Bank of Atlanta projects second-quarter GDP growth at 3.8%. In May, the U.S. economy added 139,000 jobs, outpacing forecasts, while inflation remained subdued at 0.1% month-over-month and 2.4% annually. The U.S. trade deficit has been cut nearly in half, pointing to stronger export performance and a rebalancing of trade relationships.

Canada, by contrast, is showing signs of economic strain. The national economy is shrinking, manufacturing is struggling under U.S. trade pressure, and food inflation is outpacing general inflation. In short, our economy is not keeping pace—despite our public criticism of the Trump administration.

To make matters worse, the Trump administration has now halted all trade negotiations with Canada, signaling that our bilateral economic relationship holds little strategic value for Washington. For the U.S., Canada is no longer a priority — especially under a Carney-led government that has visibly pivoted toward Europe, a market still heavily invested in maintaining close ties with the United States. From an agri-food standpoint, this shift is consequential: access to our largest trading partner is narrowing, while Ottawa appears more focused on diplomatic optics than on securing stable, competitive trade channels for the Canadian agrifood economy.

This is the one thing the ‘Elbows Up’ crowd never understood — and still doesn’t. We’re not in a trade war with the U.S. There’s no war to be won. For Trump, this is about a realignment of the global order, plain and simple — one centered entirely on American supremacy.

Love him or loathe him, Trump is not destroying the U.S. economy — not yet, anyway. His unapologetically nationalist agenda extends far beyond tariffs. He has withdrawn U.S. support from key global institutions such as the WHO and is threatening to sever ties with others, including NATO and several UN-affiliated agencies. Among them is the Food and Agriculture Organization (FAO), the UN’s most authoritative body on food security.

At a recent event in Brazil, a senior FAO official acknowledged that fundraising dynamics have shifted. In the Trump era, governments are asking harder questions: Why should we fund the FAO? What domestic benefit does it provide? What used to be assumed support is now conditional — and arguably, more accountable.

This shift isn’t unique to Washington. Many countries are quietly aligning with the U.S. position, scrutinizing globalist institutions with renewed skepticism. Transparency and accountability are byproducts of this anti-globalist sentiment — something not inherently negative.

For decades, globalism pushed the world to believe that trade liberalization was the only viable path to growth and prosperity. It became conventional wisdom. But globalism has made some nations — and some people — richer, while leaving others behind. In the process, domestic sectors, including agriculture, were often sidelined or sacrificed in the name of global efficiency.

The problem with globalism, particularly in agri-food policy, is its tendency to pursue uniformity over relevance. Canada, for example, adopted the carbon tax under a globalist climate agenda that often overlooks the vital role food producers play in feeding people. Instead of being supported, the sector is too often vilified as a problem. But agriculture is not a liability — it is a necessity.

Trump’s message — wrapped, of course, in provocative and often abrasive language — is that one-size-fits-all global policies rarely work. Nations have different socio-economic realities, and those should come first. While cooperation is essential, so is recognizing local and regional priorities. In this sense, his “America First” approach is not without logic — especially when it seems to be yielding short-term economic gains.

For Canada’s agri-food sector, the lesson is clear: striking a better balance between global commitments and national imperatives is overdue. We should not abandon multilateral cooperation, but we must stop anchoring policy to global agendas we have little influence over. Instead, let’s define what works for Canadians — what supports our farmers, protects our food security, and reflects our unique landscape — while keeping the broader global context in view.

We are not there yet. But if this moment of disruption sparks a more realistic and regionally attuned approach to food policy, we’ll be better for it.

June 29, 2025

Carney’s insane determination to keep the Digital Services Tax

Filed under: Cancon, Government, Media, Politics, Technology, USA — Tags: , , , , , , , , — Nicholas @ 05:00

One of the most noted features of Prime Minister Mark Carney’s attitude toward, well, everything is his unwillingness to take the concerns of his opponents into account. He seems to feel that he always knows best and therefore any opposition is therefore, by his definition, wrong. The government had been warned by pretty much every observer that the attempt to impose a protectionist digital service levy had incredibly high chances of triggering blowback … and it has:

Mark Carney’s thought process when he encounters dissent, probably

In other words, you can have many reactions to the current DST battle, but surprise should not be one of them. Canada pushed ahead despite efforts at an international agreement on the issue and later dismissed the increasing friction over the issue with the U.S., which has been signalling its opposition to the DST for many years. Donald Trump has taken action, but his views are not dissimilar from Joe Biden’s on the issue nor Members of Congress from both parties. Further, the companies directly affected by the rules have been similarly responsive. For example, Google began levying a 2.5% DST fee on Canadian advertisers last year in anticipation of the DST taking effect in 2025, thereby passing along much of the DST cost to Canadian businesses and consumers.

To be clear, Canada is free to adopt whatever tax policies it wants and tech companies should pay their fair share of taxes. Ensuring tech companies collect and remit sales taxes on digital sales and services is now well established in Canada. But the government’s policy of “making web giants pay” by going above taxes all companies pay with a percentage of revenues to support Canadian film and television, millions for the news sector, and now the DST was always going to spark a reaction.

Further, the Canadian DST is exceptionally complex, covering a wide range of digital revenues that occur in Canada. The baseline applicability is for companies that generate 750 million euros (about C$1.1 billion) in global revenue of which at least $20 million is digital services revenue in Canada. Digital services revenue can arise from (1) online marketplace services revenue (which would cover an Ebay, Airbnb or Uber), (2) online advertising services revenue (Google or Microsoft), (3) social media services revenue (Facebook or TikTok), and (4) user data revenue (any company that collects and sells user data). Targeting these services means there is a lot stake, estimated by the Parliamentary Budget Officer at $7.2 billion over five years.

Other countries have DSTs, but Canada was the only one to introduce one despite an agreement to institute a moratorium on new DSTs years ago at the OECD. And then it was one of the only countries to reject an extension of that moratorium. The government insisted it would move ahead without delays and indicated it was confident it could avoid retaliation.

Given the trade tensions with the U.S. since the election of Donald Trump, unilaterally dropping the DST in the midst of a trade battle did not make much sense as we needed policy certainty under a broader deal. In other words, the DST was a card we had to play as part of a negotiation. But once we played that card by announcing the tax would take effect next week, it virtually guaranteed the U.S. would respond as it did. The priority should have been a broader deal. The government could have adopted a Trump-style delay for a month to give more time for negotiations. It could have have followed the UK model of weaving it into a broader agreement and committing to a larger digital trade deal. Instead, the government continued years of dismissing the trade risks associated with the DST, potentially creating bigger economic problems in the process.

Dan Knight on how Ottawa deliberately baited Trump, despite all the warnings that this was an incredibly stupid idea:

Donald Trump has officially walked away from the negotiating table. The trigger? Canada’s ill-conceived Digital Services Tax (DST) — a reckless, retroactive grab for revenue targeting U.S. tech firms. Trump isn’t mincing words: he’s calling it a “blatant, discriminatory attack” on American innovation, and now he’s moving to punish Canada economically for it.

So what exactly is this tax?

The Digital Services Tax, passed by the Liberal government and implemented under Mark Carney’s leadership, applies a 3% levy on revenue — not profits — earned by large digital firms operating in Canada. And it’s retroactive. That means it’s being applied to earnings from as far back as January 1, 2022, with companies forced to make lump-sum payments by June 30, 2025.

This tax specifically targets companies with global revenue of at least 750 million and Canadian digital revenue of at least CAD 20 million. Translation: It’s a direct hit on American giants like Google, Amazon, Meta, Airbnb, and Uber, and it spares Canadian firms and EU-based entities from equivalent exposure. It’s not tax fairness — it’s protectionism with a smiley-face sticker.

Trump has responded in kind. As of June 27, all trade negotiations with Canada are suspended. Retaliatory tariffs — already mounting since February — are set to escalate. Trump is drawing a red line, and he’s daring Canada to cross it.

What’s at stake?

Everything. Canada sends over 75% of its exports to the United States. We’re talking about nearly a trillion dollars in annual trade. With Trump now actively leveraging tariffs and ending negotiations, entire sectors — from automotive to agriculture, energy to manufacturing — are in the crosshairs.

Already this year, Trump has slapped 25% tariffs on Canadian imports, with specific hits to steel, aluminum, vehicles, and auto parts, and 10% tariffs on Canadian oil, gas, and potash. These moves have already disrupted markets. Ending trade negotiations is a body blow to an already wobbly Canadian economy — still reeling from Trudeau-era mismanagement and Carney’s corporate globalist agenda.

So who could have seen this coming?

Almost everyone.

June 17, 2025

BC is buying ferries from China … to spite Trump!

Filed under: Cancon, China, Government, Media, Politics — Tags: , , , — Nicholas @ 03:00

After all the “buy Canadian” blather of the last federal election campaign, it was only a matter of time before the feds or one of the provinces did something astoundingly out-of-step with the mantra. Smart money was always on Quebec being the first (because that often makes sense for internal provincial political reasons), but no, this time it’s British Columbia going a long way out of their way to not buy Canadian for a huge government purchase:

BC Ferries’ MV Spirit Of Vancouver Island between Galiano Island (Bluffs Park) and Mayne Island, en route from Tsawwassen to Swartz Bay, BC on April 6, 2022.
Photo by Gordon Leggett via Wikimedia Commons.

British Columbia’s transportation minister claimed Friday that buying new ferries from European shipyards would have cost roughly $1.2 billion more than buying them from a Chinese government-owned shipyard in Weihai, Shandong province, which is a city roughly the size of Montreal that I had never heard of until this week. China knows how to build cities. They burst into existence from nothing, like popcorn. China also knows how to build ships, and highways, and high-speed rail, and just about anything else you would care to name, better and more efficiently than the Canadian public service can realistically comprehend.

The four ships B.C. Ferries is fixing to replace, of 1960s and 1970s vintage, were built at Seaspan in North Vancouver (which is an active shipyard), at the Victoria Machinery Depot (which is no longer an active shipyard), and at the Burrard Dry Dock (which is also defunct). Canada’s shipyards, for better or worse — certainly for expensive! — are very busy building things for the navy.

B.C. Ferries has plenty of experience with foreign-built vessels. Its current fleet includes ships built in Romania, Poland, Germany and Greece. Other than the Baynes Sound cable ferry on Vancouver Island — which is not especially popular — the Crown corporation’s newest Canadian-built boat went into service in 1997. So “foreign” obviously isn’t the problem.

But China is China, and that’s legitimately another thing. China is not a Canadian ally. They try to screw with our democracy, and most other democracies by the sounds of it. And right now we are in a profoundly protectionist moment: Across the political spectrum, mostly because of President Donald Trump, “buy Canadian” is the only philosophy really on offer.

But does that make sense? We should pay over the odds for ferries … because of Trump? There wasn’t half of all this foofaraw when Marine Atlantic on the East Coast bought its newest ferry from Weihai. Since last year it has safely been shepherding Canadians between Nova Scotia and Newfoundland, without a whisper of controversy in the Rest of Canada.

I don’t quite get the Trump angle, which is perhaps why I’m more interested in Dean Broughton‘s take:

… I’m not just disappointed — I’m furious — about the NDP government’s decision to award the construction of four new BC Ferries vessels to a Chinese state-owned shipyard. This isn’t just outsourcing. It’s betrayal dressed up as budget management.

Back in 2021, the NDP government unveiled a “Made-in-B.C.” shipbuilding strategy with great fanfare. They formed a Shipbuilding Advisory Committee, posed for cameras, and promised to rebuild a long-neglected industry. It was supposed to be a turning point, a real investment in local jobs and industrial capacity.

Now, many of those same politicians have turned their backs on everything they claimed to support. Not only did they ship the contracts overseas, but, according to Eric McNeely, president of the BC Ferry and Marine Workers’ Union, they didn’t even give B.C. shipyards a fair shot. The procurement process was so rushed and restrictive that no local yard could realistically compete. They didn’t lose the bid — they were boxed out.

That’s not fiscal prudence. That’s political cowardice.

The hypocrisy is staggering. This is the same government that talks endlessly about investing in clean industry and supporting working families, and they just handed a massive public contract to a country with a well-documented record of environmental abuses and human rights violations.

They talk about reconciliation and sustainable development—and then funnel hundreds of millions to an authoritarian regime.

Worse still, they did this knowing full well that B.C.’s industrial base is already in decline.

We have so little left beyond resource extraction. Shipbuilding could have been part of our economic renewal. Instead, it’s another casualty of government optics and empty promises.

I remember my father’s outrage in 1990 when the federal government cancelled the Polar 8 icebreaker — a Canadian-built vessel meant to defend our Arctic sovereignty. That decision was dismissed as a “cost-saving measure” and today our claim to the North has never been weaker.

The BC Ferries decision reeks of the same short-sighted logic.

June 13, 2025

QotD: The Subaru BRAT

Filed under: Business, Government, History, Japan, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Imagine, if you can, a truck with factory-mounted seats in the bed — and spotlights the size of a 747’s landing lights mounted on its T-topped roof.

If you know this truck, you also know why it’s no longer available.

Such fun things are no longer allowed.

They are not saaaaaaaaaaaaaaaaafe! “Moms” are “concerned”!

But in 1977, the Safety Cult — which ended such fun things — was still a backwater aberration, like dancing with rattlesnakes — and most people still esteemed fun over fear. There were roofless Broncos and K5 Blazers — and cars with beds.

You could buy all kinds of different stuff back when America was still a fairly free country — and the Subaru BRAT was as different as it got.

BRAT — all caps — was short for Bi-Drive Recreational All-Terrain Transporter. It was superficially similar to other small import pickups of the ’70s, such as the Datsun 620 and similar models from Toyota (SR5), Mazda (B210), and Chevy (via Isuzu) Luv.

But unlike them, it was a four seater — with two of the four in the bed, facing the other way. The seats were made of all-weather plastic and far from the most comfortable — but the view was spectacular. Watching the world recede as you progressed is another one of many freedoms denied today in the name of “safety”.

Subaru wasn’t “unconcerned” about “safety”. Grab handles — to keep passengers from bouncing out of the bed — were included. Though holding onto them made it harder to reach for a cold one in the cooler. That was another fun thing people did in pickups back in the day — before the Safety Cult put the kibosh on that, too.

The seats were actually a dodge — of a federal fatwa known as the “chicken tax”, which was a retaliatory tariff of 25 percent applied to import-brand pickups manufactured outside the United States as tit-for-tat for tariffs applied by foreign countries to American chicken exported outside the United States.

The “chicken tax” hit trucks with just two seats — at the time almost exclusively the small import models, which didn’t offer the extended and crew cab configurations that are commonplace today.

By adding the extra seats in the bed, BRAT qualified as a passenger vehicle rather than a “light truck”, and thus Subaru evaded the chicken tax on a happy technicality — and was also able to sell the BRAT for less than two-seater rivals that had the cost of the tax folded into their MSRP.

Eric Peters, “Doomed: Subaru BRAT (1977-87)”, The American Spectator, 2020-04-26.

June 12, 2025

Why it’s economically impossible for Walmart to “eat the tariffs” as Trump demands

Filed under: Business, Economics, Government, Politics, USA — Tags: , — Nicholas @ 04:00

At FEE, Peter Jacobsen shows the clear financial reason why Walmart and other big US retailers are passing along the price increases due to Trump’s tariffs rather than “eating them”:

Recently, a post from President Trump on Truth Social went viral. An attempt to convince retail giant Walmart to keep prices down despite the tariffs, it read:

    Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, “EAT THE TARIFFS”, and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!

Trump’s demand here is, simply put, unreasonable, and it reflects a basic misunderstanding of how pricing decisions are made in a market economy. Let’s unpack why.

Walmart’s Thin Margins

The biggest problem with the President’s view is that it doesn’t pass a basic numbers test. To break it down, let’s look at Walmart’s financials.

It’s true that Walmart generates billions of dollars in revenue each year, but revenue alone doesn’t tell us how much Walmart makes.

To understand that, we need to consider profit, which accounts for the company’s costs. More specifically, we want to look at Walmart’s net profit margin, because that’s an extremely important indicator of whether Walmart could realistically “eat the tariffs”.

Depending on the source, Walmart’s net profit margin is somewhere between 2% and 3%. Let’s split the difference and say it’s 2.5%. What does that mean?

That means, if Walmart sells you $1 of goods, it only keeps 2.5 cents in profit. That’s right, 97.5 cents goes toward inventory, employee wages, store maintenance, and a variety of other operating costs.

Put another way, if you spend $100 at Walmart, they make $2.50 in profit.

Now let’s say you buy a $100 television that Walmart imports. A $20 tariff is imposed — an added cost Walmart has to pay to import the TV. Before the tariff, Walmart was making $2.50 in profits. After the tariff, it’s now taking a $17.50 loss.

The only way Walmart can still sell this TV is by raising the price.

At this point, a tariff supporter might respond: “The easy way to fix this is to buy US-made TVs instead!”

Sure — you can avoid tariffs by only buying domestic, but the problem is that domestic TVs tend to be more expensive. If they weren’t, Walmart wouldn’t be importing them in the first place. So even if Walmart pulls international TVs off the shelves and replaces them with US-made ones, the prices still increase.

Here’s the key point: “eating” the tariffs is not an option. Walmart operates on slim margins, barely making pennies on the dollar — there isn’t room to eat 20% cost increases!

May 31, 2025

“U.S. libertarians [are] the best friends Canada doesn’t know it has”

Filed under: Cancon, Economics, Government, Law, Liberty, USA — Tags: , , , , , — Nicholas @ 03:00

In the National Post, Colby Cosh sings the praises of American libertarians for their work in trying to dismantle some of Donald Trump’s dubiously Constitutional extensions of presidential power:

The James L. Watson Court of International Trade Building at 1 Federal Plaza in Lower Manhattan, New York City.
Photo by Americasroof via Wikimedia Commons.

The U.S. Court of International Trade (CIT) issued a decision Wednesday that annuls various salvos of surprise economic tariffs, including ones on Canada, that have been enacted by President Donald Trump since his inauguration in January. I won’t lie to you: I had the same initial reaction to this consequential news that you probably did, which was “Hooray!” and then “Huh, there’s a U.S. Court of International Trade?”

This court is surely unfamiliar even to most Americans, no doubt because much of its work involves settling issues like “Do hockey pants count as ‘garments’ or ‘sports equipment’ under customs law?” Nevertheless, the CIT does have exclusive jurisdiction over civil actions involving U.S. trade law. It’s just that no president has ever before rewritten the tariff schedule of the republic in the half-mad fashion of a child taking crayons to a fresh-painted wall.

The American Constitution, from day one, has unambiguously assigned the right to set international tariffs to Congress. Congress is allowed to delegate its powers to the president and his agents for limited or temporary purposes, but it can’t abandon those powers to him altogether. Defining this legal frontier is what the CIT was asked to do, and their demarcation of it will now swim upward through higher appellate courts (its decision has been put on hold in the meantime).

The lawsuit was actually two parallel suits raising overlapping objections to the tariffs. One was brought forward by 12 U.S. states, and the other was filed by a group of tariff-exposed American businesses, including manufacturers of bikes, electronics kits and fishing equipment. The latter set of plaintiffs was roped together by the usual posse of heroic libertarians and legal originalists, including George Mason University law prof Ilya Somin.

About 24 hours after Trump originally announced the “Liberation Day” worldwide tariffs, Somin quickly blogged about how insanely unconstitutional the whole idea was, and concluded his article essentially by saying “I’m darn well gonna do something about this nonsense”. I don’t mean to suggest he deserves primary credit; I only intend to call attention, once again, to U.S. libertarians being the best friends Canada doesn’t know it has.

May 25, 2025

Comparing Japan’s supply management system to the Canadian version

Filed under: Bureaucracy, Cancon, Food, Government, Japan, Media, Politics — Tags: , , , , , , , — Nicholas @ 03:00

Colby Cosh considers the fate of a Japanese government minister who accidentally told the truth about a subject near and dear to Japanese consumers’ hearts (well, stomachs, actually):

“Japanese Girls at Work in the Rice Fields – Grand Old Fuji-Yama in the Distance, Japan” by Boston Public Library is licensed under CC BY 2.0 .

I’m sure some of you saw Wednesday’s NP headline for an Associated Press wire story: “Japan’s agriculture minister resigns after saying he ‘never had to buy rice’” AP’s Mari Yamaguchi explained this international-news nugget. A cabinet minister in a shaky minority government made a flippant comment indicating that he was light-years out of touch with ordinary people facing high grocery costs in a developed country.

Taku Eto’s political survival thus became impossible within a matter of hours, and his prime minister hastily swapped a congenial young star into the agriculture portfolio. Japan is a constitutional monarchy with a system of parliamentary government more or less like ours, so there’s nothing incomprehensible about any of this to a Canadian …

… but, of course, one almost couldn’t help flashing back to our recent election campaign, wherein the prime minister had half-boasted to a Radio-Canada reporter that he doesn’t buy his own groceries and has no earthly idea how the stuff in his fridge gets there. It struck me at the time that this was a classic mistake for an electoral neophyte like Mark Carney. Fans of the legendary American columnist Michael Kinsley will surely think of it as a “Kinsley gaffe”, i.e., an obviously true statement that is nevertheless bound to get a politician in trouble.

[…]

Eto was talking about rice because the prices for it in Japan have gone through the roof, the clouds and the stratosphere. And rice plays a role in the Japanese culture and diet for which there is no analogue in omnivorous Canada. For precisely that reason, rice is supply-managed there in much the same way our dairy, eggs and poultry are — i.e., through confiscatory tariffs on foreign products, along with a mafia of politically powerful producer cooperatives who operate under supply quotas.

If you read Canadian news, you can recite the effects of this, whether or not you’re capable of finding Japan on a map of Japan. Their supply-management system is, like ours, a major headache for counterparties in trade negotiations. Their farmers, like Canada’s, are dwindling in number and aging out of the business. They are sometimes paid to destroy crops. Farm costs for machinery and supplies are subject to inflation. And sometimes the system for domestic demand forecasting blows a tire.

It’s a constant high-wire act for Japanese governments, who still have official responsibility for the national rice supply under wartime statute. If store-shelf prices get too high, and consumers start to make trouble, the cabinet must consider loosening tariff barriers and releasing rice from the national strategic reserve. The LDP ministry has done both these things in the face of hallucinatory prices, and so the farmers are now just as ticked off as the buying public.

May 18, 2025

Trump today, Taft a century ago – interfering with Canadian federal elections

Filed under: Cancon, Government, History, Media, Politics, USA — Tags: , , , , — Nicholas @ 03:00

In the Coolidge Review, Amity Shlaes looks at the long-ago pre-Trumpian example of US interference in Canadian federal politics:

President Trump isn’t the first U.S. leader to turn a Canadian election with a few remarks. A little over a century back another president, William Howard Taft, managed the same feat.

The story starts in 1908, when outgoing president Theodore Roosevelt handpicked a successor, the lawyerly Taft. Taft won election. But from the eve of inauguration, Roosevelt began to voice doubts that Taft was up to the job. Word got around. Taft reacted to this disloyalty by attempting to prove he was no Roosevelt puppet. Where Roosevelt had invaded nations, Taft would write trade treaties. As Taft biographer Jeffrey Rosen writes, the motto of Roosevelt had been “speak softly and carry a big stick”. Taft’s maxim could have been “speak softly and carry a free-trade agreement”.

Taft’s marquee effort was to be a trade agreement with Canada, then lodged in the ambiguous status of “self-governing dominion”. As Taft noted, the dominion did have the freedom to conduct trade policy. Canada’s prime minister, Wilfrid Laurier, was a distinguished free marketeer. The political stars appeared to align. In his enthusiasm Taft praised Canada, practically crowing: “She has cost us nothing in the way of preparations for defense against her possible assault, and she never will … I therefore earnestly hope that the measure will be promptly enacted into law.” Such a treaty, Taft said, would mark a new “epoch” for North America.

In those days, tariffs represented a much more important share of U.S. federal revenues. Selling free trade was no easy work, especially not to Republicans, for whom tariffs were part of the brand. Then as now, trade treaties, unlike peace treaties, required support from both chambers of Congress. But again Taft sang his heart out, not only making the usual case for an “increase in trade on both sides of the boundary line” but also trying out wider arguments.

Early in 1911, Taft infused urgency into negotiations by threatening Canada via ultimatum: Team up with the United States, or there might be a “parting of the ways”. Hunting votes at home, Taft wrote a private letter to the still influential Roosevelt. Appealing to the imperialist in his predecessor, though not very hard, Taft suggested such a treaty might render Canada “only an adjunct of the United States”. Historians debate whether the “adjunct” letter was leaked or stayed private over the course of the 1911 negotiations. Lawmakers on the Hill, in any case, began to speak in similar tones.

Next, Taft called a special session of Congress. Congress warmed to the treaty but pounded the imperialist angle as much as Taft’s main case. “I hope to see the day when the American flag will float over every square foot of the British North American possessions, clear to the North Pole,” thundered the soon-to-be House Speaker, James Beauchamp “Champ” Clark of Missouri.

Such statements did not elude Canadian ears. Some loathed the treaty for pulling Canada farther from Britain; others, independence minded, loathed the idea of trading the thumb of one empire upon them for the thumb of another. By the time Taft signed the Tariff Reciprocity Agreement in July 1911, Canadian reciprocity opponents were on the march. By September, Canada was rejecting in a landslide referendum Taft’s and Laurier’s work.

As The Literary Digest commented in 1912, these flamboyant statements from U.S. politicians were handy weapons for Canada’s treaty opponents. They had put into Canadian Conservatives’ hands “an excellent club with which to cudgel the Liberals and their brilliant leader, Laurier”. Laurier himself was defeated in an election as well, on the argument he was pandering to the U.S.

May 6, 2025

If “a trade imbalance constitutes an American ‘subsidy’ justifying annexation of that country, then the US is going to have to annex most of the planet”

Filed under: Britain, Cancon, Government, Media, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

Despite getting his preferred choice elected as Canadian Prime Minister, US President Donald Trump still seems determined to troll Canadians about becoming the “51st state”. Among his shifting set of justifications for this is the trade imbalance between the US and Canada, which Trump chooses to interpet as a “huge” subsidy the US is providing to Canada. On that basis, there are going to have to be a lot more US states in the future:

So now we have serious commentators gaming out the pros and cons of war with Canada. What started out as a mildly amusing bit of presidential “trolling” is now being discussed as next year’s Donbass.

If, for the purposes of argument, one accepts the President’s line that a trade imbalance constitutes an American “subsidy” justifying annexation of that country, then the US is going to have to annex most of the planet: last year Washington had a one-and-a-quarter trillion-dollar imbalance with the world. It’s not hard to figure out why: over recent decades the uniparty turned a country that used to make things into a crappy low-wage service economy. […] The US now has trade imbalances with — or “subsidies” of — not only the countries that you’d expect (China, Mexico, Germany, Japan, India) but a lot of ones you wouldn’t (Finland, Algeria).

True, Canada is closer than Algeria, so there are national-security implications for Washington: the country and its politicians (Trudeau, Carney) have been entirely hollowed out by Peking, but then so it goes south of the border (Biden, McConnell). And Trump’s plan for a “fifty-first state” will not solve that problem.

The “fifty-first state” shtick can’t ever have been serious, can it? Geographically, the fifty-first state would be bigger than the other fifty combined, and with a bigger population than California’s. Last time they added stars to the flag, both parties got something out of it: the GOP Alaska and the Dems Hawaii. So wouldn’t it make more sense to make Canada’s ten provinces and three territories a baker’s dozen of new American states with a couple of senators apiece? Yeah, sure – if you want Republicans never to win a national election again.

So, aside from last week’s vote, how is the other side reacting? Last Thursday’s print edition of The Spectator contained a curiously phrased squib from my old editor, Charles Moore:

    The President may be only hazily aware that the King, of whom, he says, he has the “honour to be a friend”, is also King of Canada. If, as seems likely, the King follows his mother’s twice-used precedent and opens the new Canadian parliament in person, Trump may come to see that his next-door neighbour is part of a long-standing, legitimate order which Canadian voters are happy to endorse.

Let’s just run that again:

    If, as seems likely, the King follows his mother’s twice-used precedent and opens the new Canadian parliament in person …

The last time his mother opened Parliament in Ottawa was in 1977 — her Silver Jubilee year. Trudeau-wise, Justin’s father Pierre was not keen on it, but didn’t feel he could pick and win a fight with the Palace over it. A quarter-century later, Trudeau’s successor Jean Chrétien, a towering colossus of micro-pettiness, was annoyed at being given a crappy seat at the Queen Mum’s funeral and so scuttled Her Majesty’s Golden Jubilee throne speech.

So why would Charles Moore think it “likely” that the King would be opening Parliament in Ottawa later this month? If, as it was in my day, Speccie columns for Thursday’s magazine have to be filed on Tuesday, that would make Moore the first guy in either the Canadian or UK media to know what was not revealed to the world until Friday […]

The King has travelled far less in the first three years of his reign than his mother did: shortly after her Coronation, the Queen set off on a tour of parts of the Commonwealth that kept her away from London for six months. Her son can’t do that because he’s very sick with cancer. So it’s quite something that he’ll land in Ottawa on Monday May 26th, deliver the throne speech the following day, and then fly out again. Carney wouldn’t be doing this if he weren’t going to take the opportunity to put his view of Canadian sovereignty into the Sovereign’s mouth.

So, if Trump really has the “honour to be a friend” of the King, the only point of this 24-hour flying visit is so His Majesty can send the message that friends don’t let friends threaten to steal each other’s countries. In fact, he has made a point of referring to himself as “King of Canada” quite a bit of late. […] The “King of Canada” bit was done at the instigation of Carney. Which is odd. Especially from a party that has spent half-a-century diminishing and degrading the Crown, and for a monarch who is, unlike his mother, largely unloved and unloveable. Yet Carney seems belatedly to have come around to the old-school monarchist view that, without the Sovereign, there is insufficient to distinguish Canada from its domineering southern neighbour — especially when that neighbour keeps talking about taking it. On the other hand, both the King and his Canadian prime minister are bigtime players at the World Economic Forum, so they’re not the most obvious choice for defenders of national sovereignty. On the other other hand, it’s one thing to surrender it to fellow globalists, quite another to surrender it to Donald Trump.

I have no idea where this is headed, and if anyone can enlighten me I’d be happy to hear it. But Trump has doubled down on it, and Carney is playing the King card to oppose it. As longtime readers know, I have a general preference for smaller nations as happier homes for their people. If Alberta or Quebec voted to secede, why would you take the trouble to do that just to become a minor and inconsequential part of another big country?

But, that aside, why would it be in America’s interest to absorb a hostile population of mostly lefties over a vast and unpoliceable landmass? The history of the last thirty years is that China has shown there are subtler ways of taking over the world without firing a shot, while America has persisted in doing it the old-fashioned way and, in Iraq, Afghanistan, Ukraine and elsewhere, has gotten nowhere. Why add Canada to the list?

May 5, 2025

Make America Austere Again?

Filed under: Economics, Government, Media, Politics, USA — Tags: , , , , — Nicholas @ 03:00

The first 100 days of the BOM haven’t been quite what anyone expected. Close allies and trading partners were shocked at the new administration’s devotion to 1920s tariff “diplomacy”, supporters were dismayed to not get lots and lots of perceived wrongdoers of the Biden administration getting perp-walked for the cameras, and ordinary Americans were presented with a much worse domestic economy than they were promised:

Trump wasn’t totally fixated on economic matters … he still found time in his busy schedule to troll Catholics on his Truth Social platform.

On Wednesday, in the prelude to a cabinet meeting, U.S. President Donald Trump made yet another remark to chill the blood for those concerned about his country. Trump’s cat-and-mouse game of arbitrary changes to American import tariffs is starting to raise concerns about prices and supply chains for consumer goods. The American economy has unexpectedly shrunk in the first 100 days of Trump 2.0, even though workers and businesses are scrambling to make purchases before the effects of Trump tariffs set in. The underlying state of the economy is probably worse than the short-term numbers.

Trump says this is all a matter of “get(ting) rid of the Biden ‘Overhang'”, i.e., it’s his immediate predecessor’s fault. And let’s face it: no other politician on Earth would say anything else 100 days into an executive term. If that was as far as Trump went, it wouldn’t be of unusual concern. What struck me was his separate remark implying that, yeah, tariffs might foul up supply chains a little in the transition to the glorious economy of the future, but haven’t we Americans had it too soft for too long?

“Maybe the children will have two dolls instead of 30 dolls,” the president mused. “So maybe the two dolls will cost a couple bucks more than they would normally.” The message, which brazenly puts the contentment of children front and centre, is one you can’t imagine any other American leader delivering so directly in peacetime: have you all considered being happy with less?

The answer one would expect the median American voter to give is “Hell no”. It’s crazy that I should have to write this, but consumer abundance is a defining feature of the United States! During the Cold War, American supermarkets were the unanswerable argument for economic freedom: you could summarize the United States pretty reasonably as “It’s the country that coined the word ‘super-market'”. In our hyper-interconnected social-media world, I see a dozen conversations a week in which some European boasts of affordable healthcare, walkable neighbourhoods and having July and August and half of September off work every year: the inevitable answer from Americans is “OK, but have you been inside a Buc-ee’s, Gustav?”

Of course, it’s been a very long time since media-decried austerity in government has actually meant any kind of actual reduction in outlay … it’s usually just a (very) slight decrease in the rate of increase rather than actual dollar-value reduction. But, as Chris Bray points out, this time for sure:

I was planning to spend $100 on groceries this morning, but then I decided to slash my grocery budget, so the amount I actually spent on groceries plummeted to just $99.97, plus a small eight dollar supplemental on previously deferred grocery needs, bringing the total to a shockingly parsimonious $107.97. These major cuts caused serious alarm in my household.

Donald Trump, Politico warns, is scorching the earth:

This is the common theme everywhere, as the administration offers the first not-very-detailed hints about its plans for FY ‘26 discretionary federal outlays. The Huffington Post concludes that Trump is pulling out the BUZZSAW:

The Federal News Network sums up the size of the hit, and compare the topline number to the language about scorched earth and buzzsaws:

    Overall, the administration is looking to increase national security spending next year by 13% and decrease non-defense discretionary spending by 7.6%, meaning the White House is asking for $1.7 trillion for the discretionary budget down from $1.83 trillion this year.

While the White House plans don’t get into the subject of total federal spending, focusing narrowly on discretionary spending, the implication is that federal spending overall will go from about $7 trillion to about … $7 trillion. But TBD.

You can read the entire White House proposal for discretionary funding here. Trump is proposing deep cuts in some federal departments and programs, but is also proposing to offset those cuts with sharp increases in military spending and “homeland security”, meaning border security and sending poor gentle immigrants to places where Chris Van Hollen will fly to stare into their beautiful eyes.

April 29, 2025

The US Cancels Tariffs and Saves the World – W2W 025

Filed under: Economics, Europe, History, Japan, USA — Tags: , , , , , , — Nicholas @ 04:00

TimeGhost History
Published 28 Apr 2025

After seeing the devastating effects of the trade war that ravaged the global economy between the world wars, in 1948 the US is determined to usher in an age of free trade and global cooperation that will last until the spring of 2025.
(more…)

April 24, 2025

“Call for Admiral Ackbar! Paging Admiral Ackbar. Admiral Ackbar to the white courtesy phone, please.”

Filed under: Cancon, China, Media, Politics, USA — Tags: , , , — Nicholas @ 05:00

What a wonderful, heartwarming story: those cuddly folks in Beijing are reaching out to Canada to “partner with” as a way of warding off American “bullying”. How nice! What a great idea! With the best possible intentions. What could possibly go wrong?

China’s ambassador says Beijing is offering to form a partnership with Canada to push back against American “bullying”, suggesting the two countries could rally other nations to stop Washington from undermining global rules.

“We want to avoid the situation where humanity is brought back to a world of the law of the jungle again,” Chinese Ambassador Wang Di told The Canadian Press in a wide-ranging interview.

“China is Canada’s opportunity, not Canada’s threat,” he said through the embassy’s interpreter.

Wang — whose office requested the interview with The Canadian Press — said that China and Canada appear to be the only countries taking “concrete and real countermeasures against the unjustified U.S. tariffs” imposed by U.S. President Donald Trump.

“We have taken notice that, faced with the U.S.’s unilateral bullying, Canada has not backed down,” he said. “Instead, Canada is standing on the right side of the history, on the right side of international fairness and justice.”

He said Beijing and Ottawa should work together to convince other countries not to placate the Trump administration and to make Washington pay a price for breaking global trade rules.

Roland Paris, who leads the University of Ottawa’s graduate school of international affairs, said Beijing has long sought to reshape international institutions to advance its own interests — efforts that often have put China at odds with Ottawa’s foreign policy.

He said Canadian businesses should take a cautious approach to China, where they still face the risk of import bans and arbitrary detainment.

“The mercenary use of tariffs and non-tariff barriers that we’re seeing from the Trump administration has been practised for a long time by China in different forms,” Paris said.

“China has played its own version of hardball and abused trade rules in the past to coerce countries, including Canada, that have dared to displease Beijing.”

As the rivalry between the U.S. and China has intensified, Canada has generally followed Washington’s lead on restricting certain types of commerce with China.

Last fall — in an effort to protect Canadian auto sector jobs and allay American concerns about threats to supply chains — the federal government imposed 100 per cent tariffs on imports of Chinese-made electric vehicles that all but banned Chinese EVs from the Canadian market.

Canada alleged unfair trade practices including “a state-directed policy of overcapacity and oversupply,” and “lack of rigorous labour and environmental standards”.

Beijing retaliated by imposing large tariffs on Canadian canola and pork — duties Wang said Beijing is happy to drop if Ottawa drops its own tariffs.

In totally unrelated news, a Conservative candidate has been advised by the RCMP to “pause in-person campaigning” in the current federal election campaign due to threats originating in the People’s Republic of China:

Joseph Tay, the Conservative candidate identified by federal authorities as the target of aggressive Chinese election interference operations, paused in-person campaigning yesterday following advice from federal police, The Bureau has learned.

Two sources with awareness of the matter said the move came after the SITE Task Force — Canada’s election-threat monitor — confirmed that Tay is the subject of a highly coordinated transnational repression operation tied to the People’s Republic of China. The campaign seeks not only to discredit Tay, but to suppress the ability of Chinese Canadian voters to access his campaign messages online, via cyber operations conducted by Beijing’s internet authorities.

Now, with six days until Canada’s pivotal vote — in an election likely to be decided across key Toronto battleground ridings — it appears that Tay’s ability to reach voters in person has also been downgraded.

Tay, a journalist and pro-democracy advocate born in Hong Kong, is running for the Conservative Party in the Don Valley North riding. Federal intelligence sources have confirmed that his political activities have made him a top target for Beijing-linked online attacks and digital suppression efforts in the lead-up to next week’s federal election.

Tay’s need to suspend door-knocking yesterday in Don Valley North echoes concerns raised in a neighbouring riding during the 2021 federal campaign — where The Bureau previously uncovered allegations of Chinese government intimidation and targeting of voters and a Conservative incumbent. According to senior Conservative sources, Chinese agents attempted to intimidate voters and monitor the door-to-door campaign of then-incumbent MP Bob Saroya in Markham–Unionville.

Update: Spotted on the social network formerly known as Twitter:

April 15, 2025

Learning from history can be helpful … if you learn the correct lessons

Filed under: Economics, Government, History, Technology, USA — Tags: , — Nicholas @ 03:00

Tim Worstall explains why Donald Trump and his advisors pointing to the historical experience of high tariffs after the US civil war fails to take into account all the technological changes that happened during that time:

Trump and his economics team clearly believe that tariffs work (at least for certain values of “work”)

Post US Civil War tariffs rose strongly. Doubled and in some cases more than that. It’s also true that the US economy expanded remarkably in that period. Went from the exploitative frontier (and slave) economy to the world’s richest manufacturing one in fact. So, yay for tariffs, obviously.

Except US trade kept increasing over this period. So, tariffs were not reducing imports. Or rather, the total level of imports did not fall because tariffs even as tariffs obviously had an effect upon limiting imports — without tariffs there would have been more.

So, what happened here? The answer is the ocean going steamship.

Tariffs are only one barrier to trade, one cost of trade. Paperwork is another, local standards a third, the theft by rapacious dockside unions a fourth and, obviously enough, the cost of transport a fifth. And we can go on — the cost of information flow a sixth and soon enough we’ll be Richard Murphy shouting eleventhly.

The ocean going steamship reduced the total costs of trade by more than the tariffs raised it. Therefore trade carried on increasing.

Now forward a century, the 1970s and following. We’re told that there’s been some grand policy turn to free trade. That everyone decided to gut the rich world of real manly jobs and ship them off to sweating coolies who could be paid peanuts. The GATT, WTO, just proof of the contention and look, look, they lowered tariffs!

But the container ship (which did for those rapacious dockside unions in most places other than the US), the jet liner, the telephone and now the internet have lowered all those other costs of trade massively. The total costs of trade have dropped massively whatever we could have, should have, done about tariffs. Global trade was going to expand by multiples whatever GATT or WTO did that is.

Which is why these tariffs now have to be so large and bigly. Because to get back to that 1970s – let alone 1870s — it’s necessary to raise total costs of trade to where they were, not just tariffs.

April 12, 2025

President Trump … or any president … shouldn’t have the unilateral power to levy tariffs

Filed under: Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 03:00

Love him or hate him — and there are lots of people in both camps — President Donald Trump has the power to randomly throw spanners into the international trade arena … because Congress ceded that power to the presidency long before Trump began his political career:

In response to Donald Trump’s tariff maneuvers, Senator Rand Paul has been arguing that presidents shouldn’t have the power to raise tariffs themselves. Taxing power belongs to Congress, and that’s where tariffs should be born. Trump’s tariffs result from the use of emergency power that Congress gave to the POTUS, and we shouldn’t normalize emergency rule. You can watch him say all of that here.

Every word of that is completely right. I don’t disagree with a single breath of it. I respect Rand Paul, and I’m inordinately fond of his dad. But it misses the point about how we got here, and why, starting with the fact that Congress gave away its taxing authority.

  1. Congress delegated its authority;
  2. Donald Trump used the authority that Congress gave him;
  3. Therefore, Donald Trump is very bad, and what he’s doing is wrong.

The core sickness at the heart of the American republic is Congress, and we keep discussing that sickness by saying that Trump sucks. He’s doing what you gave him the power to do, and he’s not the first.

See also my recent post in which I described a time when Congress made something illegal, than asked the administrative agencies to explain to them what they had just banned. Congress has delegated its authority, over and over again, and the resulting political vacuum is a serious problem. But anyway, TRUMP TRUMP TRUMP.

American political discourse keeps taking a wide range of political pathologies and assigning them to the same account. Orange Man Bad, Orange Man Bad, Orange Man Bad, they explained, with drool running down their chins. Donald Trump is our deflector object, our national excuse. [Problem name here]; OH NO WHY IS TRUMP DOING THIS TO US.

The commandant of the United States Coast Guard spoke at a maritime conference, a few days ago, and he said that the organization he runs wakes up every day and tries to keep the doors from falling off: “The US Coast Guard is less ready today than any other time since World War II. We are on a readiness spiral. Today our fleet of cutters are in significant decline. We are in repair failure mode … No ship today gets underway without cannibalizing others for parts.”

See also, from one of his subordinates:

Serious question: Did all of those problems begin at noon on January 20, 2025?

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