Canada Plans Tariffs Towards US
During Donald Trump’s first term as president, there were tariffs going both ways between the United States and Canada.
Donald Trump’s second term is expected to have tariffs be an order of magnitude higher than that, so Canada is hoping to up the ante as well as it refuses to be pushed around by us, the U.S.
Details
Assuming the worst-case scenario, where tensions elevate so high between the two neighboring countries that every single good that crosses the border gets a 25% tax labeled on it and passed through to the customer, which nation would suffer more?
We have reason to believe that if push comes to shove and an economic war of attrition started, the United States would be able to sustain itself for longer than Canada.
Canada is not only a net exporter of maple syrup: there are a variety of industrial goods that the nation provides the United States such as steel, aluminum, oil, and gas. However, these impacts are likely to be mitigated if Trump gets his way with his “drill, baby, drill” mantra.
While Canada has at least three times the amount of proven crude oil, the United States also has a wealth of the black gold, an estimated 48 billion barrels. During Trump’s first term, the United States was pulling so much crude oil out of the ground that it was a net exporter of the stuff, so it is likely that the USA will be self-sustainable for many years to come.
Contrast that with US exports to Canada, and how Canada is the largest customer of United States goods in the world. These include finished products from industrial goods such as vehicles and electronics equipment.
It is possible Canada could make these in-house as well since they have the raw materials to do so, but doing so would require additional planning.
Effect on the Trucking Industry
What would these tariffs, if employed to their maximum extent, do to the trucking industry? The primary and most immediately obvious difference would be significantly fewer crossings between the northern border, both for Canadian truckers and American truckers alike.
Most of the time, this will result in less travel time for truckers, but can sometimes increase travel time depending on how far away the goods would have to be shipped from Canada. For instance, moving crude oil from Vancouver to Omaha would be significantly more distance than from Dallas, but Vancouver to Seattle would be significantly less distance than driving from Dallas.
Conclusion
By employing tariffs and other diplomatic strategies to our allies, Trump is playing hardball and is tightening the screws to get what he wants out of other countries.
Theodore Roosevelt believed that speaking softly and carrying a big stick was the best way to deal with other nations, and Donald Trump is taking that philosophy to heart, making sure to remind Canada, Mexico, and others just how big of a stick the USA has.
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