Elon Musk became a major target for Canadian retaliatory action. As contracts were getting cancelled, though, Trump waved the white flag.
It’s… been quite a few days. Over the weekend, US Supreme Idiot, Donald Trump, unsurprisingly made do on his promise and declared an economic war on Canada, Mexico, and China. The trade war was initiated for no real reason and based off of the extreme stupidity that because America buys more from other countries than sells, that somehow counts as a “subsidy”. Building off that stupidity, Trump concluded that the international relationship was “unfair” and that trade tariffs were in order. It’s a completely bonkers concept that was capped off by the maniac call to make Canada a “51st state”, something that was never going to happen on account of Canadian’s response of “fuck you”.
Still, it seemed like there was nothing stopping the tariffs. What’s more, there was no real timeline or objective stated that would lift the tariffs. Trump, after all, said it himself. He’s not looking for concessions and there’s nothing Canada could do to lift the tariffs. That set the stock markets into pure panic mode as the realization set in that he was actually serious that he was really going to carry out this act of pure stupidity. US futures late Sunday night was seen as dropping more than 600 points at one point.
Everyone knew a stock market crash was inevitable come Monday. When the markets opened the next day with the Dow Jones dropping below 43,000. The TSX for it’s part, opened below 25,000. The big question on some people’s minds is if this market slide would trigger the circuit breakers, indicating that the markets were crashing.
However, all of that was, mercifully, undone when word came that Trump seemingly finally realized what a monumentally stupid idea all of this was. A phone call to Mexican President, Claudia Sheinbaum, suggested that the tariffs might be delayed or cancelled altogether. Word eventually came out that the tariffs were delayed by a month in exchange for added border security. From CBC:
Mexico President Claudia Sheinbaum says American tariffs on her country have been delayed for a month after a conversation with U.S. President Donald Trump, a statement confirmed by the White House.
“Mexico will reinforce the northern border with 10,000 members of the National Guard immediately, to stop drug trafficking from Mexico to the United States, in particular fentanyl,” Sheinbaum posted on X.
“The United States commits to work to stop the trafficking of high-powered weapons to Mexico.”
When word started to spread that it looks like the tariffs would be held off, the North American stock markets quickly rebounded and recovered a chunk of the losses (they still closed down). The natural thinking, of course, that Trump would likely do the same thing for Canada. After all, the Trump administration said that he intended on speaking to Canadian Prime Minister, Justin Trudeau. As the markets closed, the word is that this is exactly what happened. From the CBC:
Prime Minister Justin Trudeau said Monday U.S. President Donald Trump will hold off on levying tariffs on Canada for at least 30 days after Canada made a series of commitments to improve security along the border.
The country can let out a collective sigh of relief — at least for now.
To get Trump to shelve his punishing tariffs, Trudeau said Canada is reinforcing the border with new choppers, technology and personnel and stepping up its co-ordination with American officials to stop the flow of fentanyl.
Trudeau said, all told, there will be 10,000 front-line personnel working along the border to address Trump’s stated priority: a major crackdown on drugs and migrants.
The prime minister also made a series of new commitments to Trump, including a promise to appoint a new fentanyl “czar” who will lead Canada’s efforts to crack down on the deadly drug. And he promised to list Mexican cartels, one of the top purveyors of fentanyl and other drugs in Canada and the U.S., as terrorists under Canadian law.
A lot of questions, of course, still remain. What is going to happen with the tariffs on China? Are the tariffs on Europe still going to happen? What about the tariffs on Taiwan? There’s still a lot of uncertainty. This over top of the fact that the tariffs on Mexico and Canada are only delayed, not fully lifted for a month.
Still, the damage is already done. In Canada at least, there’s a lot of much needed conversations on how Canada can diversify our trade portfolio and not be so reliant on the US for all of that trade. Canadian’s got the message loud and clear (at least for now) that relying entirely on the US is a huge mistake and that Canada needs more trade backups. Boycotts of American goods have already taken place. What’s more, Elon Musk has become a major target already in terms of retaliatory action. For instance, Ontario cancelled a $100 million contract with Starlink. From CTV:
Ontario Premier Doug Ford has announced that the province will dissolve its $100-million deal with Elon Musk’s Starlink ahead of U.S. President Donald Trump’s incoming 25 per cent tariffs.
Ford made the announcement Monday and said the government is also banning other American companies from provincial contracts until the tariffs are reversed.
“That’s just one step, and there’s many more coming,” Ford said in his capacity as premier during a campaign stop in Etobicoke. “You know, that’s a small, small drop in the bucket, the $100 million. It sends a message to President Trump, but there’s many more.”
Other provinces were also looking at their Starlink contracts as well.
Another idea that was being floated is the electric vehicle rebates. To help lower the costs of purchasing an electric vehicle, both provincial and federal governments offer rebates in the thousands, depending on the model. This to help people transition away from dirty internal combustion engines to the cleaner electric vehicle types. Obviously, it’s for the cheaper vehicles as the more luxury models don’t get the rebates. The question being floated around is whether or not government should remove the rebates for Tesla models, discouraging purchases from that maker. Some from government aren’t exactly ruling that out at this point. Of course, the fact that Trump surrendered on the tariffs for now might add a complicating factor to all of this.
What’s also worth pointing out is the fact that all of this is happening over top of multiple provinces pulling American liquor from the shelves among other actions.
Overall, the big question is why Canada should really trust America in the ways we have in the past when it comes to international trade. Diversifying Canada’s trade portfolio is now a hot issue being bandied about in numerous sectors. The thing to remember here is that the tariffs are only on a 30 day pause, not being cancelled altogether. Is Mexico and Canada going to go through this song and dance as early as next month? Honestly, who the heck really knows?
One thing is certain in all of this, though. The trade relationship between Canada and the United States – not to mention the trade relationship between Mexico and the United States – has been significantly damaged in all of this. What’s more, the world is looking at America through a different lens as well – specifically with how unreliable they have become thanks to the Trump administration taking over. It’s the new reality we are all facing.
