TRUMP or NO TRUMP CANADA?
U.S. TARIFFS: CANADA - THE PRICE OF COMPLACENCY!
Nassau, The Bahamas
First, no need for all this panicking. Countries don’t die. Second, Canada must assess whether and to what degree export/sales will slow as result of the tariffs; at 25% premium they could still see significant sales.
Third, a slight devaluation in the Canadian dollar is a short-term option; which would offset the tariff.
Fourth, Canada needs a bold response that rocks the U.S. back in its heels. That would be to end the Cuban Embargo by completing a trade Agreement with Cuba to raise up Cuban agriculture, using Canadian know-how, technology and equipment. Stand up Cuban hotels and open to Chinese tourists. There would be latency, but the political statement would be bold. One must attack always, but in these circumstances, moreso and the lesson is they oughtn’t have been resting in the comfort of their U.S. relationships, Trump or no Trump!
Fifth, Canada could join BRICs together with Mexico; purely political…but bold!
The truth is, Canada-(trade:77%)/Mexico-(trade: 84%) were lazy and locked their economies too intimately with the US’s and the sting of lower export volumes will hurt.
Mr. Trump dosen’t have an ask here…not better trade terms or anything, so it seems he just wants to punish Canada and Mexico to the delight of his supporters.
The strategy would be that by mid-term, Trump would be less potent as his chaos would catch up to him. During his previous administration, tariffs cost him $35 billion in subsidies. In one of his cascades of executive orders, he rescinded reporting requirements for the department of trade. So he’ll just claim they are ‘making billions’; which even toddlers know is rubbish. Also, trade was reduced to Russia and China last administration but accrued not to domestic U.S. suppliers but to Mexico and Canada!
Outlier:
Canada could set up shop in The Bahamas and trade to its U.S. buyers from Bahamas…
This Bahamas option is an outlier.
It would be a matter of “derring do”!
I believe our economic model puts us in a worse “sitting duck” position than is Canada or Mexico.
We must attempt to imagine near impossible options on economy as we must on environment.
Structurally, The Bahamas is perfect as a “stealth” substitute trade hub for Canadian goods to entire U.S.
There, the question is timing, structure, linkages to U.S. strategic business, banking, conceptual framing.
We’d have to have an attitude that it’s a fluid proposition and since Canada nor Mexico structure their trade for leverage…we’d have to use leverage - relationships with persons and companies that are hard to punish - to knit together a trade proposition.
As I’ve said, all successful nations have done a “hard thing”; something that carries high risk, goes against the cultural grain and is asymmetrical.
This could be our hard thing!
But as I said, it’s an outlier proposition…if successful it may succeed only for a while!
