In contrast to the noticeable drop-offs in Canadian and U.S. GDP forecasts over the past months, the outlooks for China, Russia and Saudi Arabia all got better. China, in particular, is on track for 4.8 per cent growth in 2025.
Trump’s tariffs against Canada have ostensibly been levied for the sole purpose of pressuring Ottawa into taking a harder line on border security.
Trump is only allowed to unilaterally impose tariffs in case of a “national emergency,” for
which the White House has cited Canada’s purported contribution to the “extraordinary threat posed by illegal aliens and drugs.”
In multiple public statements, however, Trump and his cabinet have framed the tariffs as part of a wider strategy of protectionism, including the shutting-out of foreign goods in order to shore up local manufacturing.
“We have de-industrialized the United States of America. There are things we can no longer make and we have to be able to make in order to be safe as a country and in order to have jobs,” Secretary of State Marco Rubio said in an interview
this week on CBS.
On the shortlist of major Canadian foreign policy accomplishments was the time in 1997 when then foreign affairs minister Lloyd Axworthy gathered several dozen countries in Ottawa and
got them to sign a treaty banning anti-personnel mines. Now, four of the signatories — Poland, Lithuania, Latvia and Estonia — are looking to pull out of the treaty because they want to mine the borders they share with an expansionist Russia.
The 1990s actually saw quite a few high-minded international treaties that aren’t looking like great ideas in hindsight. One of the more notorious being a 1994 agreement under which Ukraine gave up its nuclear stockpile in exchange for a guarantee by Russia
not to be invaded.
The U.S. is actually losing more money, even if the impact on Canada is greater
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The market is wallowing amid an unpleasant soup of tariffs, uncertainty and confusion. The major U.S. indexes — the Dow Jones Industrial Average, the S&P 500 and the Nasdaq exchange — are all flirting with
correction territory, meaning they’ve given up any
gains made in the run-up of enthusiasm preceding Trump’s inauguration.
Losses on the S&P add up to US$4 trillion
since January. Among the biggest losers are Trump’s richest supporters: Bloomberg’s Billionaires Index
calculates 10 of America’s wealthiest people — mostly in tech-related industries — are down US$300 billion so far this year, led by the world’s richest, Elon Musk, who has all but stapled himself and his fortunes to Trump since the start of the president’s second term. The market value of
Tesla, Musk’s electric car company, has
fallen by half, or about US$800 billion, and could well plummet further according to investment bank J.P.Morgan, which
cut its price target for the stock to US$120 a share, compared to US$428 on Jan. 15.
So dire is Tesla’s outlook that Trump offered a personal endorsement, appearing on the White House drive with the black-clad billionaire to make a public pledge to buy one of his cars.
Though Trump put Musk in charge of downsizing the government, improvement is hard to find. Federal spending hit a new
high last month — US$603 billion, up US$36 billion from 2024 — despite Trump’s pledges to slash it. The federal deficit set a new
record at US$1.15 trillion over five months.
Investment firm Goldman Sachs
slashed its forecast of U.S. growth to 1.7% from 2.4%,
stating “our trade policy assumptions have become considerably more adverse” while White House policy “is managing expectations towards tariff-induced near-term economic weakness.”
“The longer the tariffs stay on, the more the risk of recession grows,” economist Luke Tilley
told the Associated Press. Former treasury secretary Lawrence Summers says the
odds are now 50-50.
For all the attention focused on the daily outpouring of headlines from Washington, it’s noteworthy how little of substance has yet to be accomplished
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The Wall Street Journal, the bible of U.S. business, says top corporate and financial figures fear Trump is dragging the U.S. into trouble. In a much-discussed
editorial it denounced the tariff onslaught as “the dumbest trade war in history.”
A recent
headline warned, “Wall Street Fears Trump Will Wreck the Soft Landing.” While corporate chieftains
hold their tongues in public for fear of upsetting the thin-skinned, volatile president, the Journal reports, in private they’re appalled. One participant in a recent top-level corporate gathering reported “universal revulsion” at Trump policies, adding “They’re also especially horrified about Canada.”