While the debate continues about the good, the bad and the ugly about the new USMCA trade deal, let’s not lose sight of the fact that, notwithstanding the superficial good will expressed by Donald Trump and Justin Trudeau yesterday, we are still in a tariff war and there’s no sign of a truce any time soon.
Trump made it crystal clear that the tariffs on Canadian steel and aluminum will continue, and that could spell bad news for the local Hamilton economy.
The overwhelming majority of economists will tell you that tariffs are bad for the economy, but Trump sees them as a weapon to be used against whomever he has a grudge with and he’s hired a handful of economic advisers who share his view and encourage his policy.
It’s 19th-century thinking in a 21st-century economy, but buoyed by his own narcissism and the sycophants who surround him, Trump isn’t likely to back down.
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That means that Canada will have to continue with its targeted retaliatory tariffs, which certainly won’t bring the U.S. economy to its knees, but will impact those targeted local economies.
We’re told that any relief from the tariffs would have to be negotiated in a separate deal, but if those talks are spiked with the same level of acrimony as the NAFTA talks, we could be in for a rough ride.