June 30, 2025 - "The Canadian government is rescinding its digital services tax to avoid stalling trade talks with the United States, two days after U.S. President Donald Trump announced he would end negotiations over the levy. Ottawa says that removing the tax will put Canada back on track to reach a trade deal with the United States by July 21.
"Trump said on June 27 that he is ending all trade negotiations with Canada over Canada’s digital services tax (DST), which would impact U.S.-based tech companies such as Amazon, Google, and Netflix.... The DST imposed a 3 percent tax on revenue that tech companies earn from digital services provided to Canadian users. It was scheduled to go into effect on June 30, and was retroactive to 2022, leaving U.S. tech companies with a $2 billion bill to pay by the end of June. The Canadian tax had been an irritant to both the Biden and Trump administrations....
"The Trump administration has already imposed 25 percent tariffs on Canadian products, though goods falling under the U.S.–Mexico–Canada Agreement have been exempted. Washington has also imposed blanket tariffs on all steel and aluminum imports.... Ottawa has been seeking new trade negotiations with the United States to minimize U.S. tariffs. In announcing the removal of the DST, Canadian Minister of Finance François-Philippe Champagne said the move would allow trade negotiations with the United States to go forward....
"Champagne had insisted up until recently that Ottawa wouldn’t be putting the tax on hold, after pressure from Canadian and U.S. business groups as well as U.S. politicians to remove the tax. Canada’s Liberal government had said that the tax is in line with similar measures from a number of other countries, and that corporations should pay their 'fair share' of taxes in Canada.
The Office of the Parliamentary Budget Officer estimated that the tax would bring in $7.2 billion over five years in revenue for Ottawa."
The U.S. government abruptly broke off trade negotiations with Canada after the Carney government announced it was going forward with its Digital Services Tax, aimed at U.S. companies who operate online in Canada.
June 27, 2025 - "U.S. President Donald Trump abruptly cut off all trade negotiations with Canada on Friday, citing Ottawa’s Digital Services Tax (DST) for the decision. The tax, enacted last June, targets U.S. technology companies that operate in Canada but pay little tax here. Under the new tax regime, the first payments are set to be collected on Monday, June 30....
"Former Prime Minister Justin Trudeau’s government enacted Canada’s Digital Services Tax Act in June 2024.... The federal tax is applicable to large businesses — both foreign and domestic — that meet two specific criteria: a total global revenue of €750 million and up, and over $20 million of profits earned in Canada annually. The legislation levies a three per cent tax on digital services revenue over $20 million, and is retroactive to Jan. 1, 2022.... Taxable revenue includes those of online marketplaces, digital advertising, social media, and user data — which will primarily affect American Big Tech giants such as Amazon.com, Inc., Apple Inc., and Meta Platforms, Inc.
"Under the DST, companies were required to register with the Canada Revenue Agency (CRA) by Jan. 31, 2025 and are obligated to file their first DST returns on June 30, 2025. The CRA has said that more than 500 companies have already applied to register for DST purposes, and expects more than 100 companies to pay the tax. If applicable companies fail to register with the agency, they could be fined $20,000 per year. If they fail to file a DST return, Canada could dole out a penalty equal to five per cent of the unpaid tax for the year, plus one per cent of the unpaid tax for the year for each month, not exceeding 12 months, in which the return hasn’t been filed....
"The legislation however, has come under fire from business groups on both sides of the border, with critics warning that the rules could further inflame Canada-U.S. ties. The Canadian Chamber of Commerce has argued that the tax could increase costs for consumers and risks 'damaging our beneficial and lucrative trade relationship with the U.S.' The U.S. meanwhile, has long denounced Canada’s proposed rules, claiming that they unfairly discriminate against American firms. Last August, under the former Biden administration, the Office of the U.S. Trade Representative (USTR) launched dispute settlement consultations with Ottawa under the Canada-United States-Mexico Agreement over the DST....
"Tech giant Google LLC responded to Canada’s digital services tax rules by introducing an additional 2.5 per cent fee for ads shown in Canada starting in October 2024. Called the 'Canada DST Fee,' Google said the surcharges will “cover part of the costs of complying with DST legislation in Canada'....
"Around half of all European OECD countries have announced, proposed, or implemented a DST, according to the Tax Foundation Europe. The U.S. has met those proposals with threats of retaliatory tariffs. Some countries’ DST regimes could be on the chopping block. France’s Council of State, which advises the government on the preparation of bills and other matters, recently referred the country’s DST to the Constitutional Council for review, marking the first constitutional challenge to the DST since the legislation passed in 2019.
"For months, executives of U.S. tech giants have pressured American policymakers over Canada’s DST. Ontario Premier Doug Ford and Canadian business groups have also pressed the Carney government to abandon the DST. And while businesses and industry groups were holding out for a last-minute suspension of the DST, finance minister François-Philippe Champagne reconfirmed last Thursday that Canada is 'going ahead' with the tax. 'The (DST) is in force and it’s going to be applied,” he said.... 'Obviously, all of that is something that we’re considering as part of broader discussions that you may have,' Champagne said last week, suggesting that the DST could be renegotiated given the ongoing trade talks between Canada and the U.S."
President Trump called the day he announced his tariff plan 'Liberation Day.' Renaissance Macro Research head of US economic research Neil Dutta more appropriately labeled it 'Obliteration Day.'"
April 7, 2025 - "President Trump was elected in part because he promised to reduce prices and not drag the country into foreign wars. Sadly, President Trump has adopted a tariff policy that will raise prices and abandoned his 'America First' foreign policy in favor of a return to Bush-era neoconservatism.
"Despite criticizing President Biden for bombing Yemen, President Trump has authorized bombing that country under the false pretense that Yemen’s Houthis are threatening international shipping. President Trump has also threatened to bomb Iran. A false justification for this threat is that Iran is controlling the Houthis. If President Trump follows through on this threat against Iran, it could lead to another 'forever war.' He has also continued US support for Israel and Ukraine’s wars.
"President Trump started a trade war by imposing a ten percent universal tariff on imported products and other tariff expansions. Chinese imports will face a tariff of 54 percent, while goods imported from the European Union will 'only' be assessed a 20 percent tariff.
"The day following President Trump’s tariffs announcement, US stocks lost 3.1 trillion dollars in value, while the dollar fell to its weakest level since October.
"China responded to the tariffs by imposing a 34 percent tariff on US imports along with other measures increasing the costs of US products in China. Canada imposed a 25 percent tariff on cars imported from the US. France['s] President Emmanuel Macron called on European businesses to refrain from investing in American businesses....
"President Trump’s actions are setting off a global trade war that means US consumers will suffer from increased prices for many products both foreign and domestic. Manufacturing and other American businesses that rely on imported raw materials and other inputs from abroad will have to pay more for these inputs, assuming they are able to get them at all. US exporters will suffer from decreased demand for US products in overseas markets.
"According to estimates by the Budget Lab at Yale University, President Trump’s tariffs will cost the average American household a 3,800 dollars loss of purchasing power. The Tax Foundation estimates the tariffs will reduce US GDP by at least 0.7 percent and decrease the average American’s after-tax income by about two percent. Middle- and lower-income Americans will obviously be hardest hit. The decrease in income, combined with the increase in prices and increase in the unemployment rate, will raise demand for government welfare programs and thus put pressure on Congress to reject attempts to cut spending.
"Thus far, Trump’s response to the economic chaos he has unleashed is to say everything will work out as other countries will negotiate 'beautiful' trade deals with the US. President Trump, on the same day he announced the new tariffs, called on the Federal Reserve to cut interest rates, saying it was a 'perfect time' to do so. The interest rate cut, though, would only further degrade the dollar....
"President Trump called the day he announced his tariff plan 'Liberation Day.' This may be the most misleading name since the Affordable Care Act. Renaissance Macro Research head of US economic research Neil Dutta more appropriately labeled it 'Obliteration Day.' President Trump’s tariffs, along with his support for war, could obliterate what is left of America’s peace and prosperity."
In retaliation for the Canadian government's tariffs on Chinese EVs, steel, and aluminum, the Chinese governent has imposed tariffs on selected Canadian food products.
March 8, 2025 - "China announced tariffs on over $2.6 billion worth of Canadian agricultural and food products on Saturday, retaliating against levies Ottawa introduced in October.... The levies, announced by the commerce ministry and scheduled to take effect on March 20, match the 100% and 25% import duties Canada slapped on China-made electric vehicles and steel and aluminium products just over four months ago.
"By excluding canola, which is also known as rapeseed, and was one of Canada's top exports to the world's No.1 agricultural importer prior to China investigating it for anti-dumping last year, Beijing may be keeping the door open for trade talks. But the tariffs also serve as a warning shot, analysts say, with the Trump administration having signalled it could ease 25% import levies the White House is threatening Canada and Mexico with if they apply the same extra 20% duty he has slapped on Chinese goods over fentanyl flows.... China will apply a 100% tariff to just over $1 billion of Canadian rapeseed oil, oil cakes and pea imports, and a 25% duty on $1.6 billion worth of Canadian aquatic products and pork.... The Canadian embassy in Beijing did not immediately respond to a Reuters request for comment.
"Canadian Prime Minister Justin Trudeau said in August that Ottawa was imposing the levies to counter what he called China's intentional state-directed policy of over-capacity, following the lead of the United States and European Union, both of which have also applied import levies to Chinese-made EVs. In response, China in September launched an anti-dumping investigation into Canadian canola imports. More than half of Canada's canola exports go to China and the trade was worth $3.7 billion in 2023, according to the Canola Council of Canada. The investigation on Canadian canola is still ongoing.
"That canola was not included in the list of tariffs this time might also be a gesture to leave room for negotiations," said Rosa Wang, an analyst with agricultural consultancy JCI. Beijing could also be hoping that a change in government in Ottawa makes it more amenable.... China is Canada's second-largest trading partner, trailing far behind the United States. Canada exported $47 billion worth of goods to the world's second-largest economy in 2024, according to Chinese customs data."
The lack of foresight in Ottawa’s trade and industrial policies is astonishing. And farmers keep paying the price.
March 11, 2025 - "Canada has walked itself into an unnecessary trade war with the United States’ biggest geopolitical rival, China.... [N]ew retaliatory tariffs from China directly target our farmers, affecting over $3 billion in agri-food commodities and products. These measures are a direct response to Canada’s decision to impose a 100 per cent tariff on Chinese electric vehicles (EVs) back in October — a move designed to align with U.S. trade policy and shield the North American auto sector from low-cost competition. But now, the landscape has shifted: Joe Biden is no longer in office, Donald Trump is signalling hostility toward Canada, and China is retaliating against Canadian farmers. Meanwhile, the United States is also taking an aggressive stance against Canada....
"China is once again sending a clear message by targeting Canadian farmers in retaliation for an EV tariff — even though Canada has yet to import a single Chinese-made electric vehicle. This comes at the same time that Canada installs a new prime minister to replace Justin Trudeau, the leader who originally imposed the EV tariffs. The symbolism is undeniable, yet it remains unclear whether Ottawa grasps its significance.
"At the heart of this issue is Canada’s flawed strategy on EVs — a policy that mirrors the protectionist nature of supply management in the dairy sector. The federal government has poured over $50 billion into the EV and battery industries, supporting domestic manufacturing, critical minerals and supply chain development. Beneficiaries include Volkswagen, Stellantis-LG Energy Solution, Northvolt and Honda, among others. To protect these investments, Ottawa followed the U.S. lead in imposing tariffs on Chinese EVs, effectively limiting market competition and driving up domestic EV prices over time....
"[I]f the Canadian government is still serious about climate action, shouldn’t it prioritize making EVs more affordable rather than blocking cheaper imports? Instead, Ottawa has chosen to prioritize jobs in the auto sector over environmental concerns. The inconsistency is staggering. Meanwhile, the EV and battery industries that Canada is trying to protect remain in their infancy. We are not importing Chinese EVs, yet our agricultural sector is bearing the cost of this policy misstep."
March 10, 2025 - "The US and China came closer to a full-fledged trade war last week when China imposed tariffs of up to 15 percent on key US agricultural exports. This was retaliation for President Trump’s increasing of tariffs on Chinese exports to the United States from 10 percent to 20 percent.
"China’s retaliatory tariffs show how export-dependent industries are harmed by protectionist policies. Even if other countries refrain from imposing retaliatory tariffs, exporters can still suffer from reduced demand for their products in countries targeted by US tariffs. Businesses that rely on imported materials to manufacture their products also suffer from increased production costs thanks to tariffs. President Trump acknowledged how tariffs harm US manufacturers when he granted US automakers’ request for a one-month delay in new tariffs on imports from Mexico and Canada....
"Contrary to popular belief, foreign businesses do not pay tariffs. Tariffs are paid by US businesses that wish to sell the imported goods. When tariffs are increased, the importing businesses try to recoup their increased costs by increasing their prices. Consumers then must choose whether to pay the higher price, find a cheaper alternative, or do without the product. Whatever they choose, consumers will be worse off....
"Tariffs may provide a short-term benefit to the protected businesses. However, tariffs could keep businesses alive that should be allowed to fail so the business owners and workers can put their talents to use in other endeavors that would more greatly benefit and the whole economy.
"Defenders of tariffs, including President Trump, claim the revenue from tariffs can be used to 'offset' the revenue government loses from tax cuts. Some even claim that tariffs can generate enough revenue to allow the government to repeal the income tax. The problem with this is that a tariff brings in more revenue to 'pay for' tax cuts only to the extent the tariff does not cause consumers to cease buying imported goods. Thus, the tariffs, to bring revenue to the government, must not be large enough to discourage Americans from buying foreign products. The more tariffs increase government revenue, the more they will tend to fail in bringing about another often promoted tariff goal — an increase in the purchase of domestic goods.
"According to the Tax Foundation, if President Trump’s tariff plan for China, Mexico, and Canada were fully implemented, it would increase federal tax revenue by 142 billion dollars this year — an average tax increase of over one thousand dollars per household. The tariffs would also decrease economic output. This does not account for the decline in consumer satisfaction caused by consumers being forced to alter their consumption choices because of government-caused price increases. It also does not account for the new businesses, products, and jobs that could have been created had government not drained resources from the productive economy via tariffs.
"The economic effects are a good enough reason to oppose raising tariffs. However, the main reason to oppose tariffs is that tariffs, like all taxes (including the inflation tax), are theft."
February 23, 2025 - "As a country, we simply aren’t ready for what is coming from Washington. I’m not talking about the tariffs.... I’m talking about Trump’s changes to the American economy.
"On Saturday, Trump was speaking to his most enthusiastic supporters at the Conservative Political Action Conference in Maryland.... Once again, he made them a promise that should make every American excited.... 'To further, turbo charge our economy, we’ve launched the most aggressive deregulation program in any nation’s history, and we’re also going to be seeking the largest tax cuts in American history,' Trump said. 'We brought them down, as you know, from close to 40% down to 21% now we’re bringing them down to 15% if you make your product in the United States of America'....
"There are so many things in that brief snippet of Trump’s speech that should worry Canadian business and political leaders.... In Canada, we have a high regulatory burden and our biggest trading partner and competitor for investment is about to have a much lower burden. That will make Canada less attractive to investment and to executives making decisions on where to expand or locate plants.
"The same on taxes. Right now, the effective corporate tax in Canada is 15% — the same level Trump wants to lower his rate to. For more than a century, Canadian industrial policy has sought to ensure a lower rate on corporate taxes as a way to attract investment and jobs. For the most part it has worked, but with an equal corporate tax rate, a reduced regulatory burden and the possibility of tariffs, the United States becomes more attractive ... unless we also change and radically alter our economic rules.
"Sadly, we are about to get a new prime minister who doesn’t see that as the way forward. A few weeks ago in Halifax, Liberal leadership hopeful Mark Carney announced that he would get rid of the consumer carbon tax but then said he’d make up the difference by increasing the industrial carbon tax....Twice he mentioned steel companies as an example of the kind of big polluter he wants to pay for his program.
"Steel companies create jobs, unlike Carney, and are already paying massively on the carbon tax. Take Algoma Steel in Sault Ste. Marie, which in the fiscal year that ended March 31, 2024, paid $24.6 million in carbon taxes on a net income of $105 million. Since then, the carbon tax already went up by 23% last April 1 and this coming April 1, it will see another increase of 19%.... [W]ere Algoma to produce the same amount of steel that they did in fiscal year 2023-24, they would be paying nearly $36 million annually in carbon taxes.... Algoma ... would likely shut down in the face of Trump’s changes and Carney’s foolish policy. Other players in the industry, like ArcelorMittal, which owns Dofasco, would likely just move production to their various American plants....
"Carney mocks the idea put forward by Conservative Leader Pierre Poilievre that we need to axe the tax, but that is exactly what we will need to do. In the face of tariffs, but just as much in the face of Donald Trump’s remaking of the American economy, we will have no choice.
"Actually, we will have a choice: We can stay with the status quo and sink into a recession and persistent economic decline, or we can start to rebuild our economy to compete and that includes not putting unnecessary costs on businesses and industry that will only chase away jobs and investment. Poilievre understands that; he gets that to compete in this new economic order being created by Trump that we need to unleash our own economy, diversify trade, and embrace Canada’s natural resource-based industries."
The Trudeau government has vowed to protect Canada's dairy supply management system in trade talks with the Trump administration. But is that a hill worth dying nn?
February 8, 2025 - "Canadians collectively breathed a sigh of relief when President Trump offered a reprieve [from] the proposed 25 percent tariff on Canadian trade goods. The trade war is not over, however. It has been put on pause for 30 days. As the deadline approaches ... the Trump administration will make new demands, and Canada’s dairy supply management system will be targeted. Canadian ministers recognize this threat, as International Trade Minister Mary Ng made it clear in a recent interview that there will be no concessions made on supply management.
"Is this a reasonable stance to take? There are several reasons why it may be time for Canada to shed its supply management system.
"Canada imposes tariffs as high as 325 percent on American dairy products such as butter. Credibility in trade negotiations is essential, and it’s difficult to call Trump’s threat of 25 percent tariffs unfair when insisting on maintaining Canadian tariffs that are 10-fold higher in this specific sector.... A major trade deal with the UK was scuttled in 2024 when Canada slapped a 245 percent tariff on UK cheese. Both Australia and New Zealand have accused Canada of dumping dairy products on the international market, threatening the Comprehensive and Progressive Agreement for Trans-Pacific Partnership....
"Canada already literally dumps hundreds of millions of litres of milk down the drain every year due to supply management. Dairy farmers have quotas assigned to them, and if they produce milk beyond that quota, it is illegal to sell the products. They are forced to dump it either down the drain or in offshore sales. They can’t sell it to Canadians as it would lead to a reduction in domestic dairy prices..... In any other industry, such price-fixing would be illegal.
"The trade war has led to calls for Canada to reduce interprovincial trade barriers on products and services. Improving domestic trade within Canada would reduce reliance on foreign products. But Canada’s supply management greatly hinders interprovincial trade, as provincial dairy boards set local quotas and control the movement of products between provinces to ensure prices remain high.... Canadian households pay an extra $300 to $444 annually due to the system, and the costs continue to rise.
"Canada’s dairy supply management has decimated small family-run dairy operations as larger corporate operations have bought up and jealously held onto government-issued dairy quotas. In 1991, Canada had 60,495 dairy producers. Today, there are fewer than 10,000.... The bulk of Canada’s large dairy operators have concentrated in Quebec. While Quebec accounts for 23 percent of Canada’s population, it accounts for 37 percent of the country’s dairy production. Canadian politicians are always averse to taking policy stances that may upset Quebec. This problem is more acute now as an election looms.
"Supply management systems were implemented in other nations in the 1960s and 1970s. Since then, most countries phased out the systems as they recognized it harmed the citizens and industries it was supposed to protect. New Zealand got rid of supply management in 1984, and Australia in 2000. The dairy industries in both countries have flourished in response. The model to extricate a nation from supply management already exists. Canada can follow it....
"Canada’s dairy supply management system is costly and outdated. It isn’t a hill worth dying on in a trade war. Now is the perfect time to move on from it."
The on-again-off-again trade war between Canada and the USA is off again, for the next 30 days. The new peace agreement in a nutshell: Trudeau agreed to do what he has already announced he would do at some point, while Trump agreed to give him a 30-day deadline to do it.
February 3 - In a last-minute deal, Trump has dropped his proposed tariffs on Canadian goods, and Justin Trudeau has dropped his retaliatory tariffs on American products - for 30 days. President Donald Trump and Prime Minister Justin Trudeau apparently had a positive call this afternoon — which culminated in a one-month delay on Trump’s tariff threat. Trump has vowed to impose 25% tariffs on Canadian and Mexican goods due to weak border security....
February 3, 2025 - "Trudeau added Canada will invest another $200 million to back 'a new intelligence directive on organized crime and fentanyl,' appoint a 'fentanyl czar,' list drug cartels as terrorist organizations, and launch a new Canada-U.S. joint strike force to combat fentanyl, organized crime and money laundering....
The deal Trudeau announced ... also includes several border security measures the federal government has already committed to, and that Canadian officials have spent weeks detailing to Trump administration officials and U.S. lawmakers in Washington.... Both Canada and Mexico agreed to deploy roughly 10,000 additional personnel to their respective borders with the U.S. as part of the deals that suspended Trump’s tariffs. Trudeau said Canada’s personnel 'are and will be' in place." Read more: https://globalnews.ca/news/10995552/tariffs-trudeau-trump-call-canada-us/
February 3, 2025 - Ontario Progressive Conservative Party Leader Doug Ford has put his short-lived promise to cancel a $100 million contract with Elon Musk’s Starlink on ice after U.S. President Donald Trump suspended his tariff threat. In a Monday morning statement, Ford had said the Ontario government would be “ripping up” a contract signed to provide high-speed internet to northern and rural communities.... Late on Monday, however, cancelling the Starlink deal was paused....
"Ford’s team said Ontario’s retaliatory measures would also be rolled back.... American alcohol will also no longer be removed from the shelves of Ontario’s liquor stores. The Starlink contract would still be cancelled, and booze removed, if tariffs do come into effect, according to the PCs." Read more: https://globalnews.ca/news/10995669/doug-ford-elon-musk-starlink/
Canada and the United States are now in a trade war, because neither Trump nor Trudeau wanted to stop it. In fact, they both wanted this war. Why would they want that? Because in wartime, people will rally around their government, which means rallying around them.
"War is the health of the state." - Randolph Bourne
February 1, 2025 - "President Donald Trump has signed orders to impose 25 percent tariffs on goods from Canada and Mexico and an additional 10 percent levy on goods from China. Trump said the tariffs were imposed via the International Emergency Economic Powers Act 'because of the major threat of illegal aliens and deadly drugs killing our citizens, including fentanyl....
"After weeks of speculating, the White House imposed the taxes in retaliation for 'the illegal fentanyl that they have sourced and allowed to distribute into our country,' said Trump’s press secretary Karoline Leavitt. 'These are promises made and promises kept by the president,' Leavitt said at a Jan. 31 press conference.
"Trump also said the levies were needed because of the sizable trade deficit between the United States and Canada. While the president estimated the gap to be $200 billion, recent U.S. Census Bureau data suggest the trade deficit with Canada was $55 billion in the first 11 months of 2024.
"If they remain in place, the president’s tariffs will affect approximately $1.6 trillion in annual trade between the North American countries, including crude oil. The United States imports about 4.5 million barrels of oil daily from Canada. President Trump told reporters that he will 'probably' lower crude tariffs to 10 percent.
"Sunderesh Heragu, a researcher and educator at Oklahoma State University, says gasoline prices could have the most notable impact, as the United States imports a lot of crude oil from its North American neighbors. 'Twenty percent of the oil from Canada gets processed by the U.S. refineries, so when that supply is cut, then you’re going to see at least 20 percent, maybe more, less gas at the pumps,' Heragu told The Epoch Times. 'That’s going to impact the prices significantly'....
"Canadian Prime Minister Justin Trudeau, speaking at an event in Toronto on Jan. 31, announced that Ottawa will deliver a “purposeful, forceful but reasonable, immediate” response to U.S. tariffs. The outgoing prime minister acknowledged that Canada 'could be facing difficult times in the coming days and weeks,' but all three levels of government will support Canadians.
"Conservative leader Pierre Poilievre and New Democratic Party chief Jagmeet Singh requested Parliament to be recalled. Prime Minister Trudeau prorogued Parliament until the Liberal Party selected a new leader to replace him....
"Ontario Premier Doug Ford has urged Ottawa to be ready to respond with 'dollar for dollar' and 'tariff for tariff' retaliation. 'Canada won’t start this fight, but we have to be ready to win it,' Ford wrote on social media platform X."
January 20, 2025 - Alberta Premier Danielle Smith issued the following statement welcoming the U.S. tariff reprieve and calling for policy action:
"Alberta is pleased to see that today, President Donald Trump has decided not to impose tariffs on Canadian goods until the matter is further studied.
"We appreciate the implicit recognition that this is a complex and sensitive issue with serious implications for American and Canadian workers, businesses, and consumers, given the integration of our markets, as well as our essential energy and security partnership.
"Avoiding tariffs will preserve hundreds of thousands of jobs in every sector in Canada and the United States. For example, refusing to impose tariffs on Canadian energy preserves the viability of dozens of American refineries and facilities that process Alberta crude, as well as the jobs of tens of thousands of Americans they employ.
"Despite today’s promising news, the threat of U.S. tariffs remains very real. As a country, we must take the following immediate steps to strengthen and protect our economic and security partnership with the United States, and to avoid the future imposition of tariffs:
Focus on diplomacy and refrain from renewed talk of retaliatory measures, such as imposing tariffs on exports or cutting off energy supplies to the United States. Having spoken to the President, as well as dozens of governors, senators, members of Congress, and allies of the new administration, I am convinced that strong, consistent diplomacy and working in good faith on shared priorities is the path to a positive resolution with our American allies. The worst possible response to today’s news would be for the federal government or other provincial premiers to declare 'victory' or escalate tensions by needlessly threatening the United States.
Negotiate ways to increase what Canadians and Americans buy from each other. For example, the United States should consider buying more oil, lumber, and agricultural products from Canada, while Canada should consider buying more gas turbines and military equipment from the United States, as well as the IT equipment needed to strengthen our AI data center sector. Finding ways to increase trade in both directions is essential to achieving a win-win situation for both countries.
Redouble border security efforts. Over the next month, all border provinces should, either alone or in partnership with the federal government, deploy the necessary resources to protect our shared border from drugs and illegal migration.
Announce a significant acceleration towards achieving the NATO target of 2% of Canadian GDP. This is clearly a shared priority that benefits both our nations. There is no excuse for continuing to lag behind.
Addressing immigration channels and known loopholes that allow people hostile to Canada and the United States to enter our country, and restoring immigration levels and rules that existed when Stephen Harper was Prime Minister.
Immediately repeal all federal anti-energy policies (production cap, Clean Electricity Regulations, Impact Assessment Act [Bill C-69]) and expedite preliminary approval of the Northern Gateway and Energy East projects."
The global Covid response was destructive to public trust, economic vitality, citizen health, free speech, literacy, religious and travel freedom, elite credibility, demographic longevity, and more. Five years later, the postwar neo-liberal world order itself seems to be in danger.
October 20, 2024 - "The global Covid response was the turning point in public trust, economic vitality, citizen health, free speech, literacy, religious and travel freedom, elite credibility, demographic longevity, and so much more. Now five years following the initial spread of the virus that provoked the largest-scale despotisms of our lives, something else seems to be biting the dust: the postwar neoliberal consensus itself.
"The world as we knew it only a decade ago is on fire, precisely as Henry Kissinger warned in one of his last published articles. Nations are erecting new trade barriers and dealing with citizen uprisings like we’ve never seen before, some peaceful, some violent, and most that could go either way. On the other side of this upheaval lies the answer to the great question: what does political revolution look like in advanced industrial economies with democratic institutions? We are in the process of finding out.
"Let’s take a quick march through modern history through the lens of US-China relations. From the time of China’s opening in the 1980s to the election of Donald Trump in 2016, the volume of trade imports from China only grew, decade after decade. It was the most conspicuous sign of a general trajectory toward globalism that began following the Second World War and accelerated with the end of the Cold War. Tariffs and trade barriers fell ever more, as dollars as the world reserve currency filled the coffers of world central banks. The US was the global source of liquidity that made it all possible.
"It came at a huge cost, however, as the US through the decades lost its manufacturing advantages in dozens of industries that once defined the American commercial experience. Watches and clocks, pianos, furniture, textiles, clothing, steel, tools, shipbuilding, toys, household appliances, home electronics, and semiconductors all left US shores while other industries are on the rocks, most especially cars. Today, the much-celebrated 'green energy' industries seem fated to be outcompeted as well. These industries came to be largely replaced by debt-financed financial products, the explosion of the government-backed medical sector, information systems, entertainment, and government-funded education, while the primary exports of the US became debt and petroleum products.
"Many forces combined to sweep Donald Trump into office in 2016 but resentment against the internationalization of manufacturing was high among them. As financialization replaced domestic manufacturing, and class mobility stagnated, a political alignment took shape in the US that stunned the elites. Trump got busy on his pet issue, namely erecting trade barriers against countries with whom the US was running trade deficits, primarily China.
"By 2018, and in response to new tariffs, the volume of trade with China took its first huge hit, reversing not only a 40-year trajectory of growth but also dealing the first the biggest blow against the 70-year postwar consensus of the neo-liberal world. Trump was doing it largely on his own initiative and against the wishes of many generations of statesmen, diplomats, academics, and corporate elites.
"Then something happened to reverse the reversal. That something was the Covid response.... Trade with China soared. Within a matter of weeks, Americans were wearing Chinese-made synthetic coverings on their faces, having their noses stuck with Chinese-made swabs, and being tended to by nurses and doctors wearing Chinese-made scrubs.
The chart on China’s trade volume looks like this. You can observe the long rise, the dramatic fall from 2018, and the reversal in the volume of PPE purchases following the lockdowns and Kushner’s interventions. The reversal did not last long as trade relations broke down and new trade blocs were born.
"The irony, then, is a salient one: the aborted attempt to restart the neo-liberal order, if that is what it was, occurred in the midst of a global bout of totalitarian controls and restrictions. To what extent were the Covid lockdowns deployed in service of resisting Trump’s decoupling agenda? We have no answers to that question but observing the pattern does leave room for speculation.
"Regardless, the trends of 70 years came to be reversed, landing the US in new times, described by the Wall Street Journal in the event of a Trump victory in 2024:
If it turns out that the tariff on China is 60% and the rest of the world is 10%, the U.S.’ average tariff, weighted by the value of imports, would leap to 17% from 2.3% in 2023, and 1.5% in 2016, according to Evercore ISI, an investment bank. That would be the highest since the Great Depression, after Congress passed the Smoot-Hawley Tariff Act (1932), which triggered a global surge in trade barriers. U.S. tariffs would go from among the lowest to highest among major economies. If other countries retaliated, the rise in global trade barriers would have no modern precedent.
"Talk of the Smoot-Hawley tariff really does plunge us into the wayback machine. Back in those days, trade policy in the US followed the US Constitution (Article I, Section 8). The original system granted Congress the power to regulate commerce with foreign nations, among other powers. This was intended to keep trade policy within the legislative branch to ensure democratic accountability. As a result, Congress responded to the economic/financial crisis by imposing huge barriers against imports. The Depression worsened.
"It was a widely accepted belief among many in elite circles that the 1932 tariffs were a factor in the deepening of the economic downturn. Two years later, efforts began to transfer trade authority to the executive so that the legislature would never do something so stupid again. The theory was that the president would be more likely to pursue a free-trade, low-tariff policy. That generation never imagined that the US would elect a president who would use his power to do the opposite.
"In the waning days of the Second World War, a group of extremely smart and well-intended diplomats, statesmen, and intellectuals worked to secure the peace in the aftermath of the wreckage in Europe and around the world. They all agreed that a priority in the postwar world was to institutionalize economic cooperation as broadly as possible, under the theory that nations that are dependent on each other for their material well-being were less likely to go to war against each other.
"Thus was born what came to be called the neo-liberal order. It consisted of democratic nations with limited welfare states cooperating in trading relationships with ever-lower barriers between states. In particular, the tariff was deprecated as a means of fiscal support and industrial protection. New agreements and institutions were founded to be the administrators of the new system: GATT, IMF, World Bank, and the UN.
"The neo-liberal order was never liberal in the traditional sense. It was managed from the outset by states under US dominance. The architecture was always more fragile than it appeared to be. The Bretton Woods agreement of 1944, tightened through the decades, involved nascent institutions of global banking and included a US-managed monetary system that broke down in 1971 and was replaced by a fiat-dollar system. The flaw in both systems had a similar root. They established global money but retained national fiscal and regulatory systems, which thereby disabled the specie-flow mechanisms that smoothed and balanced trade in the 19th century.
"One of the consequences was the manufacturing losses mentioned above, which coincided with a growing public perception that the institutions of government and finance were operating without transparency and citizen participation. The ballooning of the security state after 9-11 and the stunning bailouts of Wall Street after 2008 reinforced the point and set the stage for a populist revolt. The lockdowns – disproportionately benefitting elites – plus the burning of cities with the riots of the summer of 2020, the vaccine mandates, and combined with the onset of a migrant crisis, reinforced the point.
"In the US, the panic and frenzy all surround Trump but that leaves unexplained why almost every Western country is dealing with the same dynamic. Today the core political fight in the world today concerns nation-states and the populist movements driving them versus the kind of globalism that brought a worldwide response to the virus as well as the worldwide migrant crisis. Both efforts failed spectacularly, most especially the attempt to vaccinate the entire population with a shot that is only defended today by manufacturers and those in their pay.
"The problem of migration plus pandemic planning are only two of the latest data points but they both suggest an ominous reality of which many people in the world are newly aware. The nation-states that have dominated the political landscape since the Renaissance, and even back in some cases to the ancient world, had given way to a form of government we can call globalism. It doesn’t refer only to trade across borders. It is about political control, away from citizens in countries toward something else that citizens cannot control or influence.
"From the time of the Treaty of Westphalia, signed in 1648, the idea of state sovereignty prevailed in politics. Not every nation needed the same policies. They would respect differences toward the goal of peace. This involved permitting religious diversity among nation-states, a concession that led to an unfolding of freedom in other ways. All governance came to be organized around geographically restricted zones of control. The juridical boundaries restrained power.
"The idea of consent gradually came to dominate political affairs from the 18th through the 19th century until after the Great War which dismantled the last of the multinational empires. That left us with one model: the nation-state in which citizens exercised ultimate sovereignty over the regimes under which they live. The system worked but not everyone has been happy with it.
"Some of the most high-status intellectuals for centuries have dreamed of global government as a solution to the diversity of policies of nation-states. It’s the go-to idea for scientists and ethicists who are so convinced of the correctness of their ideas that they dream up some worldwide imposition of their favored solution. Humanity has by and large been wise enough not to attempt such a thing beyond military alliances and mechanisms to improve trade flows.
"Despite the failure of global management last century, in the 21st century, we’ve seen the intensification of the power of globalist institutions. The World Health Organization (WHO) effectively scripted the pandemic response for the world. Globalist foundations and NGOs seem to be heavily involved in the migrant crisis. The International Monetary Fund (IMF) and World Bank, created as nascent institutions for a global system of money and finance, are exercising outsized influence on monetary and financial policy. The World Trade Organization (WTO) is working to diminish the power of the nation-state over trade policies.
"Then there is the United Nations. I happened to be in New York City a few weeks ago when the United Nations met.... The attendees were not only statesmen from all over the world but also the biggest financial firms and media outfits, along with representatives of the largest universities and nonprofits. All of these forces seem to be coalescing at once, as if they all want to be part of the future. And that future is one of global governance wherein the nation-state is eventually reduced to pure cosmetics with no operational power.
"The impression I had while there was that the experience of everyone in town that day, all swarming around the big United Nations meeting, was one of deep separation of their world from the world of the rest of us. They are 'bubble people.' Their friends, source of financing, social groupings, career aspirations, and major influence are detached not only from normal people but from the nation-state itself. The fashionable attitude among them all is to regard the nation-state and its history of meaning as passe, fictional, and rather embarrassing.
"Entrenched globalism of the sort that operates in the 21st century represents a shift against and repudiation of half a millennium of the way governance has worked in practice. The United States was initially established as a country of localized democracies that only came together under a loose confederation. The Articles of Confederation created no central government but rather deferred to the former colonies to set up (or continue) their own structures of governance. When the Constitution came along, it created a careful equilibrium of checks and balances to restrain the national state while preserving the rights of the states. The idea here was not to overthrow citizen control over the nation-state but institutionalize it.
"All these years later, most people in most nations, the United States especially, believe that they should have final say over the structure of the regime. This is the essence of the democratic ideal, and not as an end in itself but as a guarantor of freedom, which is the principle that drives the rest. Freedom is inseparable from citizen control of government. When that link and that relationship are shattered, freedom itself is gravely damaged.
"The world today is packed with wealthy institutions and individuals that stand in revolt against the ideas of freedom and democracy. They do not like the idea of geographically constrained states with zones of juridical power. They believe they have a global mission and want to empower global institutions against the sovereignty of people living in nation-states.
"They say that there are existential problems that require the overthrow of the nation-state model of governance. They have a list: infectious disease, pandemic threats, climate change, peacekeeping, cybercrime, financial stability, and the threat of instability, and I’m sure there are others on the list that we’ve yet to see. The idea is that these are necessarily worldwide and evade the capacity of the nation-state to deal with them.
"We are all being acculturated to believe that the nation-state is nothing but an anachronism that needs to be supplanted. Keep in mind that this necessarily means treating democracy and freedom as anachronisms too. In practice, the only means by which average people can restrain tyranny and despotism is through voting at the national level. None of us have any influence over the policies of the WHO, World Bank, or IMF, much less over the Gates or Soros Foundations. The way politics is structured in the world today, we are all necessarily disenfranchised in a world governed by global institutions.
"And that is precisely the point: to achieve universal disenfranchisement of average people so that the elites can have a free hand in regulating the planet as they see fit. This is why it becomes supremely urgent for every person who aspires to live in peace and freedom to regain national sovereignty and say no to the transfer of authority to institutions over which citizens have no control.
"Devolving power from the center is the only path by which we can restore the ideals of the great visionaries of the past like Thomas Jefferson, Thomas Paine, and the entire generation of Enlightenment thinkers. In the end, governing institutions must be in citizen control, and pertain to the borders of particular states....
"There are plenty of reasons to regret the collapse of the neo-liberal consensus and a strong rationale to be concerned about the rise of protectionism and high tariffs. And yet what they called 'free trade' (not the simple freedom to buy and sell across borders but rather a state-managed industrial plan) also came at a cost: the transference of sovereignty away from the people in their communities and nations to supranational institutions over which citizens have no control. It did not have to be this way but that is how it was constructed to be.
"For that reason, the neo-liberal consensus built in the postwar period contained the seeds of its own destruction. It was too dependent on the creation of institutions beyond people’s control and too reliant on elite mastery of events. It was already crumbling before the pandemic response but it was the Covid controls, nearly simultaneously imposed all over the world to underscore elite hegemony, that exposed the fist under the velvet glove.
"The populist revolt of today might someday appear as the inevitable unfolding of events when people become newly aware of their own disenfranchisement. Human beings are not content to live in cages. Many of us have long predicted a backlash to the lockdowns and all that was associated with them. The full scale of it none of us could have imagined. The drama of our times is as intense as any of history’s great epochs: the fall of Rome, the Great Schism, the Reformation, the Enlightenment, and the fall of the multinational empires. The only question now is whether this ends like America 1776 or France 1790."
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April 27, 2022 - "Despite the highly publicized blockades at Ontario’s Ambassador Bridge and Coutts crossing in Alberta, cross-border trade in Ontario and Alberta was up 16 per cent in February, compared to the same month last year, according to data from Statistics Canada. And while some businesses were impacted by the blockades, the trade figures also raise questions about the government’s use of the Emergencies Act – a decision, in part, justified by 'threats to (Canada’s) economic security' brought about by the blockades....
"Demonstrators first blockaded the Coutts, Alta., border crossing on Jan. 29, bringing traffic at one of western Canada’s busiest crossings to a standstill. The initial effect on businesses was severe. 'The first couple days we basically came to a halt,' says Martin Jansen, general manager of the Fort Macleod-based seed processor Arjazon. The company had shipments stuck on both sides of the border. But within a week, Canada Border Services began directing commercial traffic through the nearby Carway and Del Bonita crossings, and Jansen says his shipments made it through....
"Other businesses appear to have had the same idea. Road traffic along the Ambassador Bridge and Coutts crossings, as well as other embattled border crossings in B.C. and Manitoba, was down 8.8 per cent this February compared to the previous year, according to a report by Statistics Canada.... Only 54 trucks made it over the Ambassador Bridge during the week-long blockade. But at the same time truck traffic along other Ontario border crossings shot up 72 per cent compared to the previous week, nearly making up for the loss.
"Perishable food is sensitive to shipping disruptions since even a short delay can result in unsalable products.... But trade in perishable goods does not appear to have been hampered by the blockade. U.S. vegetable trade was up seven per cent in Ontario, and 66 per cent in Alberta compared to the previous year, according to data from StatCan.
"Cross-border trade between Ontario, Alberta and the U.S. was up for all major types of goods in February, with the notable exception of Ontario’s largest commodity: vehicles and vehicle parts. That was down seven per cent over last year.... Lacking timely deliveries, automakers as far south as Alabama scaled back production, resulting in cancelled shifts and lost wages for workers. A February analysis by the Anderson Economic Group estimated the combined loss to auto industry workers and investors at $375 million.
"Analyst Peter Nagle, of the automotive research firm S&P Global Mobility, notes that cross-border trade in completed vehicles was down this January and February compared to last year. However he believes this decline is largely a result of global supply chain issues that have bedeviled automakers. 'Supply chain shortages have limited overall production across the North American light vehicle industry,' says Nagle....
“'The illegal blockades in our capital and at our borders earlier this year had a significant impact on Canada’s economy,' says Alexander Cohen, a spokesperson for the Minister of Public Safety, in a statement, 'which is why our government invoked the Emergencies Act to end them.' Cohen cites a number of independent and widely publicized cost estimates to support this justification, including a Canadian Manufacturer and Exporters estimate that the Coutts blockade impacted $44-million worth of trade per day.
"Deputy Prime Minister Chrystia Freeland made a similar case in February, stating that 'the Ambassador Bridge has affected about $390-million in trade each day.' According to the Ambassador Bridge website, roughly $400-million in goods are transported across the bridge daily during normal operation. The closure of the bridge did not mean that businesses lost $400 million a day. Ontario’s stable international trade numbers and truck data suggest that most of these goods eventually made it to their destination."
December 6, 2021 - "F.A. Hayek wrote several books and articles that are justly famous.... But because Hayek’s professional life spanned more than 60 years – from the mid-1920s until the late 1980s – the corpus of his work is enormous, with most of it being relatively obscure.... But my very favorite of Hayek’s many superb but lesser-known works is his paper that first appeared in the Winter 1964 issue of New Individualist Review: “Kinds of Order in Society.” This paper is a work of genius. A great deal of confusion about society, and about government’s role in it would be swept away were this paper’s core message more widely understood....
"Among the assumptions at the foundation of this article is that we human beings extend our ability to achieve our goals by cooperating with each other. And the greater is the number of individuals with whom we cooperate, the greater is the number of goals that we can successfully pursue. This fact explains the omnipresence of human cooperation. Such cooperation began eons ago in small hunting and gathering bands in which each individual personally knew those with whom he or she cooperated. Today, this cooperation literally spans the globe and occurs among billions of people, nearly all of whom are strangers to each other.
"When the cooperation is only among individuals who know each other personally – that is, only among a very small number of persons – it’s easy for each person to comprehend the nature of the cooperative arrangement.... But cooperation on such a small scale doesn’t allow individuals to achieve as much as each can achieve by including in the cooperative effort more individuals. The inclusion of more individuals brings to the cooperative effort not only additional muscle power but, far more importantly, additional and more diverse brain power – that is, more human creativity. The inclusion of more individuals also encourages greater specialization, which in turn results in each task being done more expertly, more uniformly, and faster.
"The human mind, however, isn’t evolved to be able to know more than a few hundred individuals. If we cooperated only with individuals we know, the span of our cooperation would remain extremely narrow.... Fortunately, our inability to personally know more than a handful of fellow human beings is offset by our instinct to adopt and follow rules. By following rules we can, and do, increase the number of individuals with whom we cooperate beyond the number that we personally know.
"An example is trade, which has at its base this rule: Each person is entitled only to what other people voluntarily give to him or her. No one gets to take other people’s stuff without their permission. Under this rule, if Jones wants some item, say an axe, owned by Smith, Jones understands that he can get this axe only by persuading Smith to give it to him. And especially if Smith is a stranger to Jones, the most obvious way for Jones to persuade Smith to give him the axe is for Jones to agree to give some other item ... to Smith in exchange.... Trade allows each of us to tap into the unique talents, interests, and endowments of our trading partners, be they neighbors across the street or strangers across the ocean. And trade is possible because its most basic rule is easily understood by every human being regardless of cultural background.
"Trade is not the only activity made possible by our rule-following instincts. Without sophisticated rule-following behavior, life in groups larger than the small band would be impossible. Think of yourself in a big city. You know not to practice playing your trumpet or your drums at midnight, and you know that other people follow a similar rule, which enables you – and others – to rely on being able to sleep each night. You know that when you come with your filled grocery cart upon a queue at the supermarket checkout lane, you take your place at the back of that line – and you’re content to do so because you know that other people will follow the same rule. You know that you aren’t allowed, without invitation, to enter premises belonging to other people. You know what green lights and red lights mean to motorists. You know that even though the restaurant serves you food before you pay for it, that you must pay for it when you’re done dining.
"Because humans are rule-following creatures, you thrive amongst strangers. By following the rules that prevail in a society, not only are harmful and disruptive encounters kept to a minimum, each individual – by knowing that countless strangers will follow the same rules that he or she follows – is able to plan courses of action in ways that would be impossible if rules didn’t exist.
"Our rule-following behavior gives rise to ever-more complex – and ever-more productive – patterns of cooperative interaction. These patterns are not only not designed by anyone, they could not possibly be so designed. Furthermore, these patterns cannot be directly observed and understood in the same way that our hunting and gathering ancestors could directly observe and ‘fully’ understand their simple cooperative endeavors. And yet, because we today still have the same brains as did our hunting and gathering ancestors, we are unable, without real intellectual effort, to perceive – and much less to make sense of – the complex patterns of social cooperation in which each of us participates daily.
"In “Kinds of Order in Society,” Hayek identified two categorically different kinds of orders – 'spontaneous orders' and 'organizations' – that are both common and useful to humans. Each of us is part of both kinds of orders. Yet we instinctively suppose that only one kind of these orders – namely, organizations – is possible. As I’ll explain in my next column, our instinct of interpreting all order as being the consequence of conscious organization is the root of much mischief."
October 20, 2019 - "With gasoline prices in California eclipsing $4/gallon, Americans have taken to nervously glancing at their gas gauges. Oil prices appear to only be going in one direction (up), with dramatic disruptions such as a drone attack on Saudi refineries disrupting fuel supplies. But things may soon get far worse if the International Maritime Organization (IMO), a sub-agency of the United Nations, implements onerous worldwide restrictions on fuel content.
"Starting in 2020, the IMO will require the phasing out of sulfur from ship fuels despite documented difficulties in refiners’ ability to meet strict new standards. Unless the IMO changes course, consumers across America, and all around the world, will foot the bill for higher gasoline prices as the result of global fuel shortages. If America and her allies fail to act soon to stymie the efforts of this global bureaucracy, affordable gas will soon be a thing of the past.....
"Like many unaccountable international governmental organizations (IGOs), the IMO is hardly noticed by the media. But the agency’s 2016 decision to ratchet down sulfur content in shipping fuels from 3.5 percent to 0.5 percent has received plenty of press and attention from analysts around the world. Environmentalists have lauded the IMO’s decision and called for eliminating scrubbers used to wash out sulfur and comply with the new standards. But the IMO and cheerleader groups fail to properly acknowledge or address the fuel shortages that will likely result....
"In moving away from sulfur, shippers will likely switch en masse to alternatives such as gasoil or diesel. That’s not good news for refineries, which will face significant pressures to ramp up production of these stand-ins. Currently, there simply isn’t enough low-sulfur fuel to go around, and refineries will need to sharply increase capacity and operations in order to keep up....
"Worldwide regulations holding the industry back make it even more difficult for refineries to keep up.... In the US, federal fuel regulations have significantly contributed to the closure of 70 refineries since 1990. And since then, refineries have spent more than $100 billion complying with ultra-specific federal standards about which blends of fuel they are required to produce.... In Europe, refinery regulation is often even stricter than in the US....
"[A]sking everyone in the world to pay drastically higher fuel and shipping costs overnight hardly seems like a practical solution to environmental issues.... By working with shippers to achieve gradual, more attainable goals, the IMO could signal that it is serious about cleaning up the environment while keeping costs low. Consumers around the world deserve clean skies without having to gasp at their gas gauges, and taxpayers deserve an IGO that makes sound decisions."
August 1, 2019 - "Liz Truss, the new trade secretary, will promise to create up to 10 new tax-free zones at ports and airports in a move condemned by Labour as setting up tax havens and money-laundering opportunities along Britain’s coasts. The cabinet minister, a free marketeer whose political hero is former chancellor Nigel Lawson, said the plan for so-called 'free ports' could revitalise transport and trade hubs like Margaret Thatcher did for the London Docklands in the 1980s.
"Boris Johnson championed free ports when he took office last week, but the Singapore-style tax-free zones are controversial and have been identified by the EU as a money-laundering risk.
"Under the plans, ports including Teesport, Milford Haven, Port of Tyne and London Gateway could become standalone economic zones, considered independent for customs purposes, that charge no taxes or tariffs on imports....
"Those advising Truss on a new free port panel will include Eamonn Butler, the director of the rightwing, libertarian Adam Smith Institute, and Tom Clougherty, the head of tax at the Thatcherite thinktank the Centre for Policy Studies (CPS). Emma Jones, who runs a small business network, and Daniel Korski, a former adviser to David Cameron will also be on the panel....
"Speaking on a visit to Teesside, Truss will say: 'Freedoms transformed London’s Docklands in the 1980s, and free ports will do the same for towns and cities across the UK. They will onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs..... We will have a truly independent trade policy after we leave the EU on 31 October. I look forward to working with the free ports advisory panel to create the world’s most advanced free port model and launch the new ports as soon as possible.'
"The Department for International Trade described free ports as hubs for business and enterprise that 'could be free of unnecessary checks and paperwork, and include customs and tax benefits'.... The department pointed to 250 free trade zones in the US where 420,000 people are employed."
December 17, 2016 - "Adam Smith’s central contribution to economic understanding was surely his demonstration that under an institutional arrangement of individual liberty, property rights, and voluntary exchange the self-interested conduct of market participants could be shown to be consistent with a general betterment of the human condition.
"The emergence of a social system of division of labor makes men interdependent for the necessities, amenities and luxuries of life. But in the free, competitive market order every individual can only access what others in society can supply him with by offering them something in exchange that they value more highly than what is being asked from them in trade.
"Thus ... as if by an 'invisible hand' each individual is guided to apply his knowledge, ability and talents in ways that serve the trading desires of others as the means of fulfilling his own self-interested goals and purposes. Furthermore, not only is the need for government regulation and control of economic affairs shown to be unnecessary for societal improvement, Smith went on to argue that such government intervention was detrimental.... Smith explained in The Wealth of Nations (1776):
“To give the monopoly of the home-market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought to employ their capitals, and must, in almost all cases, be either a useless or a hurtful regulation. If the produce of domestic can be bought there as cheap as that of foreign industry, the regulation is evidently useless. If it cannot, it must generally be hurtful.
“It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.... What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better to buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage..... It is certainly not employed to the greatest advantage when it is directed towards an object which it can buy cheaper than it can make it....
"Smith was scathing in his criticisms of manufacturers, merchants and agricultural special interests who wished to maintain or gain market share and greater profits from restricting the free flow of goods and services between countries through government action.... Said Smith:
Commerce, which ought naturally to be, among nations, as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe, than the impertinent jealousy of merchants and manufacturers.
The violence and injustice of the rulers of mankind is an ancient evil, for which I am afraid, the nature of human affairs can scarce admit of remedy. But the mean rapacity, the monopolizing spirit of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot perhaps be corrected, may very easily be prevented from disturbing the tranquility of any body but themselves.
"Smith warned of the 'interested sophistry' of those desiring anti-competitive interventions and protections in the private sector through the political power of governments by creating false notions that trade is a zero-sum game in which if one side wins the other side must have lost, or that imports and a trade deficit are inherently harmful to the material well-being of a nation. These distortions and errors had to be refuted so it would be better understood that, 'In every country it always is and must be in the interest of the great body of the people to buy whatever they want of those who sell it cheapest.'"
May 24, 2019 - "President Trump ... is unshakably convinced that his tariffs are a tax on China. He repeated this grossly erroneous claim just Thursday, during his announcement of a new $16-billion bailout for farmers harmed by, yes, his tariff war. 'Just so you understand,” he said, 'these tariffs are paid for largely by China. A lot of people like to say by "us."’
”Well, the people who say ['us'] are economists and other experts who have done the math, and found that the tariffs Trump has imposed on imports from China cost American consumers $68.8 billion last year.... But our main topic here is that $16-billion bailout, and what it says about who pays for Trump’s trade war and how much. The newly announced bailout comes on top of $12 billion in emergency farm aid he announced last year, aimed heavily at soybean farmers whose exports to China have fallen to zero, thanks to the trade war.
"The $68.8-billion tariff cost estimated by a team of economists led by Pablo D. Fajgelbaum of UCLA is reflected in the prices of imports, which are passed through almost entirely to U.S. consumers. The money is paid by importers to the U.S. government, which can redistribute it to the direct victims of the trade war, such as farmers, if it wishes. But that’s a narrow recompense.
"It doesn’t help collateral victims, such as the buyers of foreign-made washing machines, the median price of which rose to $835 from $749 after tariffs were imposed on the appliances (at the behest of Whirlpool, a domestic manufacturer). It won’t help the estimated 40,000 beer industry workers who have lost their jobs, in part because of tariffs on the aluminum used to make cans, according to industry reports. Nor will it help others who lose their jobs if the tariffs foment a general economic slowdown.
"Nor are the agricultural bailouts evenly distributed within the farm sector. They’re heavily concentrated among Midwestern growers, including soybean farmers, leaving dairy farmers and others wanting. It’s proper to note that the pain in this sector isn’t a direct result of U.S. tariffs.... It’s the result of retaliatory tariffs from China and other trading partners, which destroys foreign demand for U.S. production. No one pockets any gains from these tariffs; they’re simply a deadweight loss to international trade.
"As farmers are well aware, the bailouts won’t compensate them for the longer-term damage to their export prospects. Soybean farmers can’t count their losses simply in terms of lower annual exports while the tariffs are in effect; they’re fearful, rightly, that when former customers such as the Chinese turn to other countries for their supplies, they may never come back....
"So U.S. consumers are paying a tax to the U.S. government in the form of higher prices for imported goods. Some of those funds are circulated back into the economy as emergency aid — but it’s not going back to all the consumers who paid the tariffs. Nor is it certain that the tariff revenue is actually going to the trade war victims.... Moreover, because the farm losses are due to foreign, not domestic, tariffs, no revenue at all is coming to the United States as a result. The bailouts are our expense, completely. That’s another way in which the tariffs are paid not by China but by 'us.' Mr. Trump."
August 22, 2018 - "Farmers for Free Trade purchased billboard and radio ads to send a clear message to Commerce Secretary Wilbur Ross, who will visit North Dakota this Thursday with Deputy Secretary of Agriculture Steve Censky.... For the week of August 20, eight billboards throughout Fargo will rotate with the message, 'Secretary Ross, Tariffs Hurt ND Farmers.'
"The billboards are running now.... Radio ads that highlight the impact of tariffs on North Dakota farmers will run on Thursday, August 23rd in the Fargo market.
"'Farmers and manufacturers have been patient, giving time to the president to see if these will work. But prices are plummeting and export markets have been taken over by foreign competitors. We hope that Secretary Ross hears from North Dakota farmers, manufacturers and workers that it’s time to end the trade war, so America’s heartland can start thriving once again. It’s past time that we open new markets to American exports instead of erecting new barriers,' said Brian Kuehl, executive director of Farmers for Free Trade.
"Soybean exports are a core component of North Dakotan farmers’ bottom lines. North Dakota exports roughly two-thirds of its annual $2 billion soybean crop to China. Already this year, Chinese buyers have cancelled all of their orders for food-grade soybeans, valued between $1.2 to $1.5 million. If the United States and China don’t resolve the trade dispute, farmers may not be able to meet their payments and could lose financing to plant next year’s crop. These slashes to the bottom line are unsustainable, and farmers want to see the president focus on open access to international markets for their products."
