The familiar patterns are continue to repeat. The stock market crash continues and the Trump tariffs vanish.
Canada’s mainstream media continues to say that the tariff situation remains “confusing” even as guests have plainly explained to them what’s really happening. Raging asshole, Donald Trump, threatens massive tariffs, he ignores everyone around him and proclaims that he has already made up his mind, he watches the stock markets closely on Fox News, if the stock markets crash, he freaks out and pulls the tariffs. After taking such an ego hit, he’ll go on to make additional threats to make up the difference for his previous failed tariffs. The cycle then repeats. As far as I’m concerned, unless something major changes, that’s really all you need to know.
What’s more, this is the pattern we’ve seen since January. In January, Trump threatened his 25% tariffs. The stock markets, government, and media, didn’t really believe Trump would be that stupid, so they carried on with business as usual for the most part. Trump then proved to the world that he really is that colossally stupid and enacted those tariffs. Reacting to that, Canada announced countermeasures to push back against being stabbed in the back by such a close ally. The stock markets reacted by crashing. When Trump saw that on Fox News, he panicked and put a 30 day pause on them. That allowed the markets to recover after.
That moment proved that Canada is dealing with a child with a gun for a president and needed a plan in dealing with this new threat. Regardless, Trump doubled down and said that once the pause has expired, the tariffs are really going in place after all. Well, the 30 days expired and the tariffs went into effect. Once again, the Canadian government announced that they would be hitting back. Once again, the stock market crashed. Over two days, the DOW Jones lost 1,300 points. Trump likely saw the market crash on Fox News. Once again, Trump panicked, but this time, only partially lifted the tariffs. This while threatening tariffs on aluminum and steel, dairy and lumber, and a whole bunch more. This to make up for the second tariff failure in his mind.
The most imminent threat of tariffs then became the lumber and dairy ones as Trump said that they’ll be going into effect on Monday or Tuesday. Well, Monday hit and the stock market crashed again, this time shedding another nearly 900 points. Trump, no doubt, saw the stock market crash on Fox News and decided to go into hiding for the day. As a result, the lumber and dairy tariffs seemingly failed to materialize.
The thing is, Trump said Monday or Tuesday, so what happened today? Well, simply put, the stock market crash continued with the DOW Jones losing another nearly 500 points. From Forbes:
The blue chip Dow Jones Industrial Average, which tracks 30 American stalwarts from Apple to Walmart, fell as much as 730 points, or 1.7%, by mid afternoon.
The more broadly spanning S&P 500 and Nasdaq indexes were dinged less by the tariff news, as the S&P’s Tuesday loss peaked at 1.5% and the Nasdaq’s drop crested at 1.3%.
The drop followed Trump’s social media announcement that he will increase tariffs on Canadian steel and aluminum imports from 25% to 50%.
All three indexes fell Tuesday to their lowest intraday prices since mid September.
Well, wouldn’t you know it? The dairy and lumber tariffs simply failed to materialize today as well. It’s almost like the pattern works like clockwork. So, what is going to happen with the dairy and lumber tariffs? Who knows? It’s entirely possible that Trump will conveniently forget about it or it might be part of an additional threat later on down the road when another tariff threat ends in failure like all of the other ones.
Of course, as the Forbes report notes, Trump decided to compensate for this latest failure by doubling the steel and aluminum tariffs from the initially threatened 25% to 50%. Those tariffs are supposedly due to go into effect tomorrow. So, it’ll be interesting to see if Trump actually makes an attempt on that one by enacting those or if they’ll conveniently get dropped somewhere along the line (in which Trump will probably make additional threats to make up for the failure again). It’s possible because Trump has also threatened so-called “retaliatory” tariffs among others, so it’s not as though the threats have slowed down necessarily at this point.
On the Canadian side of the border, we are witnessing what may very well be the first misstep in this whole trade war from Canada. Ontario premier, Doug Ford, has announced that he is lifting the 25% counter tariff on electricity. From the CBC:
Ontario is suspending its promise to add a 25 per cent surcharge on exports of electricity to some U.S. states, Premier Doug Ford said Tuesday afternoon.
The move comes after Ford and U.S. Secretary of Commerce Howard Lutnick had a “productive conversation about the economic relationship between the United States and Canada,” Ford said in a joint statement posted on social media.
Speaking to reporters at Queen’s Park Tuesday, Ford said Lutnick had “sent out an olive branch” for provincial and federal Canadian officials to meet in Washington to “discuss the future” in the wake of repeated tariff threats from U.S. President Donald Trump. They are set to meet on Thursday, Ford said — and in return, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota.
“With any negotiation that we have, there’s a point that both parties are heated, and the temperature needs to come down,” Ford said.
“They understand how serious we are about the electricity and the tariffs, and rather than going back and forth and having threats to each other, we have both agreed that cooler heads prevail. We need to sit down and move this forward.”
OK, so the whole point of the counter tariffs is to push back against the US. They were implemented in response to the US actions in the first place. The messaging up to this point is that the countermeasures are being put in place until all tariffs have been lifted and the threats have ceased. That hasn’t happened. Parts of the 25% tariff are still in place and the threats have not stopped. So, Ford responded by taking one of his major bargaining chips off the table? Really? Ford saying that the whole point of the countermeasures is to get the American’s attention is extremely off the mark here. I mean, go ahead and have your talk, but if the talks prove fruitless when it’s backed by no action, then keep the tariff in place. This is ultimately one of the first blunders I’ve seen in this whole situation from Canada’s side.
Supposedly, some of the messaging from the US side at this point is that they are considering lowering the tariffs. That shouldn’t be good enough for Canada. It should have been that they are going to remove all tariffs and ask that Canada rescind the counter measures after the US lift their tariffs. That would be more ideal and we can finally move past this ridiculous nonsense.
At any rate, we’ll see what ultimately becomes of the steel and aluminum tariffs tomorrow. A key factor will likely be the response of the US stock markets. If they continue the crash into a third day, it’s entirely possible we’ll see a pullback. If they recover, then that increases the odds that the steel and aluminum tariffs will move forward. It’s also possible that the crash starting yesterday will also be enough of a deterrent as well. As odd as it sounds, let’s hope the market crash continues to increase the odds the scheduled tariffs won’t move forward.
Ford should have kept the export taxes on while having talks Thursday. Don’t suspend them because maybe the talks will succeed. (They won’t succeed.)
Yeah, it was a bad move to take the electricity counter tariffs off the table just for the hopes of talks moving forward. I was even more perplexed when Ford counted the fact that the 50% steel and aluminum tariffs got bumped back down to 25% as a sign that they are getting somewhere. The fact that there was a tariff at all on Canada in general was the reason to move forward with those countermeasures. Hilariously, Trump had no problem doing a victory lap when the electricity tariffs were taken off the table after. That only further humiliated Ford after that particular blunder. This as Lutnick whispers sweet nothings of “let cooler heads prevail” into Ford’s ear. Ford fell for that one hook line and sinker.