Stephen Marche: America Came for Canada. We Said No.

Friday, Aug. 21, may go down in history as Canada’s Liberation Day. It was the day America came for us, and we said no.

The trade negotiations between the United States and Canada had been moving forward in the weeks after President Trump first threatened 50 percent tariffs on Canadian goods, but just before midnight, Prime Minister Mark Carney rejected the American proposal. “Last-minute changes in the U.S.-proposed terms were unfair, uneconomic and called into question the reliability of any deal,” Mr. Carney said in a statement. “Canada will match those tariffs dollar for dollar to protect our workers and businesses.”

It was a decision made, seemingly, on the spur of the moment, but the deep history of this country paved the way for this one, critical gesture — a historic “no.”  

Mr. Trump’s tariffs on some $20 billion of Canadian goods began immediately after his deadline passed. For Canada, the choice came down to either severe but temporary economic instability or binding itself to a pseudo-democratic fiscal basketcase of a nation, whose only apparent foreign policy objective has become domination for the gratification of its president’s slapdash vanity.

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Canada Defies Trump- Will Impose Retaliatory Tariffs

The U.S. imposed 50% tariffs on $20 billion worth of Canadian products early Saturday after last-ditch negotiations failed to resolve the latest strain in already tense relations between the historic allies. Canada's leader said it will retaliate beginning Sept. 8.

In a call with reporters late Friday, U.S. Trade Representative Jamieson Greer said Canada had declined to finalize the trade deal under the terms that had been agreed to earlier this week. He told Fox News on Saturday that there are "no new planned talks with the Canadians."

"We're moving forward with measures that respond to Canadian retaliation," Greer said, adding: "After a year of that retaliation, we've said enough, and so we've taken countermeasures. Our interest is in protecting American workers and protecting American supply chains. We've been offering to bring the Canadians along on that path, really to cut the tariffs on them, on steel, on tariff autos, even lumber, things that are sensitive for them, and they've always had the best deal, and they still would have an even better deal, but they didn't want that."

Canadian Prime Minister said Saturday in Ottawa that "in the coming days, we will release the details of these new tariff measures, which will come into force the Tuesday after Labor Day." The dollar-for-dollar retaliation would target steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.

He disclosed that Canada had been willing to drop remaining retaliatory tariffs on steel, aluminum and autos if the United States substantially lowered its own, and to encourage provinces to restore U.S. alcohol sales.

But he said Washington's final demands went too far, saying, "They asked too much and offered too little," Carney said.

Read the rest here.

A Deep Dive Into Sino-American Trade

China Increasingly Views Trump’s America as an Empire in Decline

When President Trump visited China in late 2017, Xi Jinping welcomed him with a grand display of Chinese history and culture: a four-hour private tour of the Forbidden City culminating in a performance by the Peking Opera.

Eight years, a pandemic and two trade wars later, Mr. Trump is returning to Beijing, where the theme of future dominance, not ancient majesty, has filled domestic and international headlines with articles about dancing robots, drone swarms and the quiet hum of electric vehicles.

China increasingly casts itself not as a fading civilization trying to catch up to the West but as a superpower poised to surpass it. Chinese nationalists and state-linked commentators say they have Mr. Trump to thank. America under his rule, they say, validates Mr. Xi’s worldview centered on “the rise of the East and decline of the West.”

For decades, many Chinese viewed the United States with a mix of admiration, envy and resentment. America represented wealth, technological sophistication and institutional confidence. Even critics of Washington who reviled the American system often assumed that it worked.

Mr. Trump’s ascent and his volatile second term shattered that image.

In January, a nationalistic Beijing think tank affiliated with Renmin University published a triumphant report about Mr. Trump’s first year back in office. The report argued that his tariffs, attacks on allies, anti-immigration policies and assaults on the American political establishment had inadvertently strengthened China while weakening the United States. Its title: “Thank Trump.”

The report called Mr. Trump an “accelerator of American political decay,” with the United States sliding toward polarization, institutional dysfunction and even “Latin American-style instability.” His hostility toward China, the authors argued, was a “reverse booster” that unified the country and helped bring about its strategic self-reliance.

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Why Trump's "Trade Deals" are Worthless

When President Donald Trump struck a trade deal with the European Union in July, officials on both sides stressed how it would ensure long-term stability to trans-Atlantic trade.

The Trump administration called the deal a "generational modernization of the transatlantic alliance." European Commission President Ursula von der Leyen said it "restores stability and predictability" by locking in 15 percent tariffs on most European goods exported to the U.S., while most American imports to Europe would be exempt from tariffs.

In other words, Trump got what he wanted out of that deal: A reduction in tariffs on American exports and the establishment of a new, permanent baseline tariff on European goods. European leaders also felt like they'd won something: the 15 percent tariff was lower than the 25 percent tariff Trump had threatened, and the deal would stop Trump from hiking tariffs the next time he was in a bad mood.

So much for that.

On Friday, Trump announced that he would raise tariffs on European-made cars to 25 percent. (Those tariffs are authorized by Section 232 of the Trade Expansion Act of 1962, so they are not affected by the Supreme Court's ruling in February that limited some of the president's power to impose tariffs unilaterally.)

Those higher tariffs could cost automakers $4 billion this year.

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The Economic Risks From Trump's War Are Real and Growing

US Shipbuilding and the Jones Act

Last month, I had the chance to sit down with 60 Minutes correspondent Lesley Stahl for a piece on the moribund state of US commercial shipbuilding. That story, “Turning the Ship Around,” aired last weekend, and having now seen it, I’d like to offer a few thoughts.

The segment opens with Stahl describing the US commercial shipbuilding industry as “nearly extinct.” The numbers back her up. As she points out, US shipyards produce around three ships per year. That’s less than what South Korean shipbuilder Hanwha produces in a month. But even that may be too charitable. Three is the US average over the last 25 years. This decade, US shipyards are on track to average roughly one per year.

But that’s just oceangoing cargo ships. Widening the aperture to include other vessel types does little to improve the picture. The most recent data show that the United States, the world’s second-largest manufacturing country, accounts for just 0.04 percent of global commercial shipbuilding output—good enough for 19th place. Over the past decade, the US has averaged 0.24 percent of global output. And it’s trending down.

South Korean firm Hanwha, however, says it will reverse the matter. According to the CEO of its Philly Shipyard, which the company purchased in 2024 for $100 million, the yard is set to transform into a 21st-century enterprise...

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Underestimating the Potential Energy Shock

It is hard to decide which is the bigger disaster: the unfolding car crash in the global gas market or the mounting danger that entire countries will run out of oil.

The benchmark TTF contract for gas in Europe was €29 (£25) per megawatt-hour (MWh) in mid-February. Bank of America says it could reach €500 this winter if the Strait of Hormuz remains closed for 10 weeks, as it may well do.

That would blow through the record high seen after Russia’s invasion of Ukraine and amount to a full-blown economic emergency for Europe, the UK, Japan, South Korea and South Asia.

The picture is dramatically worse after Israel attacked Iran’s South Pars gas field, adding upstream gas and oil infrastructure to the menu of targets on both sides of the Gulf.

Iran’s missile retaliation on Qatar’s Ras Laffan has inflicted serious damage to the giant complex, which alone produces a fifth of the world’s liquefied natural gas (LNG).

It will be months before shipments start again. Qatar Energy says 17pc of production is lost for three to five years. It will have to declare force majeure on LNG supplies to Italy, Korea, China and Belgium.

It is just as bad for oil. The paper market that we all follow does not capture the drama. Physical deliveries are under far greater stress than Brent futures, at about $113, would suggest.

Actual barrels of the Dubai basket and Oman’s Murban are fetching close to $170 a barrel as Asian refiners scramble to buy anything they can. Jet fuel deliveries have hit $210 in Rotterdam and $240 in Singapore.

Kurt Barrow, the vice-president of oil at S&P Global Energy, says it may become physically impossible to obtain supplies. “If the Strait stays closed for two months, you’ll have plants without feedstock and we’ll get real rationing. We’ll have panic buying and hoarding,” he said.

“This is the largest supply disruption ever. Net, we’re around 15 million barrels a day (b/d) short in the market. Crude gets the headline but the actual impact is further downstream in refined products, diesel, jet, fuel or naphtha. There are 68 refineries in the war zone.”

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Foreign Investment in the US is Collapsing

US-China Summit: Tactical draw (strategic win for China?)

When Donald Trump launched his trade war against China in April, threatening tariffs as high as 145%, the Chinese government said it would never bow to blackmail and vowed to “fight to the end”.

The question now is whether the consensus reached between Trump and Xi Jinping in Busan, South Korea, on Thursday means that the fight really has come to an end, and if so on whose terms.

Trump rated it as a 12 out of 10 meeting.

Both sides have taken some of their biggest guns off the table, but this appears closer to a truce than a durable peace setting stable boundaries for China’s relations with the US. Nevertheless the outline of a broader long-term diplomatic relationship is visible, with announced reciprocal visits by each leader within a year. That is very different to what China hawks in Congress were hoping when Trump came to power, and will set alarm bells off on both sides of the aisle.

One of the difficulties has been that Trump’s strategic objectives in launching the trade war were not articulated – the balance between protecting traditional US manufacturing, ring-fencing modern technology-based industries critical to US national security, punishing Chinese trade practices, or more broadly generally overpowering China as a competitive threat, were fudged. Gradually the battle morphed in some US administration minds from a trade war into a geopolitical trial of strength between the two world’s superpowers, a trial that left the whole world awaiting its outcome.

As a result it has been a turbulent six months, involving undulating tariffs, export curbs, threats, counter-threats, deferral and monopolies inquiries, interspersed with five rounds of trade talks ranging though Madrid, London, Geneva, Stockholm and Kuala Lumpur, culminating in two hours of direct talks between Trump and Xi, the first meeting between the two men since 2019.

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Federal appeals court largely rejects Trump’s emergency tariffs

A federal appeals court ruled Friday that most of President Donald Trump’s global tariffs are illegal, striking a massive blow to the core of his aggressive trade policy.

The U.S. Court of Appeals for the Federal Circuit, in a 7-4 ruling, held that the law Trump invoked when he granted his most expansive tariffs does not actually grant him the power to impose those levies.

“The core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution,” the court said. “Tariffs are a core Congressional power.”

The appellate court paused its ruling from taking effect until Oct. 14, in order to give the Trump administration time to ask the Supreme Court to reverse the decision.

Trump later Friday attacked the appeals court as “Highly Partisan” and asserted that the Supreme Court will rule in his favor.

“If these Tariffs ever went away, it would be a total disaster for the Country,” Trump wrote in a Truth Social post. “If allowed to stand, this Decision would literally destroy the United States of America.”

“The President’s tariffs remain in effect, and we look forward to ultimate victory on this matter,” White House spokesman Kush Desai said in a separate statement.

Friday’s ruling is the second straight loss for Trump in the make-or-break case, known as V.O.S. Selections v. Trump.

The case was consolidated from two separate lawsuits, one filed by a dozen states and the other by five small U.S. businesses.

It is the furthest along of more than half a dozen federal lawsuits challenging Trump’s use of the International Emergency Economic Powers Act, or IEEPA, to impose sweeping tariffs.

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Ambrose Evans-Pritchard: Trump's tariffs are the greatest act of economic and political self-harm in modern American History

Donald Trump has succeeded in forcing America’s democratic allies to their knees. His country must henceforth live with the invidious consequences of what he has done. 

“It may be dangerous to be America’s enemy, but to be America’s friend is fatal,” to borrow a line from Henry Kissinger.

Vladimir Putin has strung Trump along for six months without paying a price. China has turned the tables, forcing the White House to hand over Nvidia H20 chips in exchange for rare earth magnets that Trump should have thought about before launching his trade war. Didn’t the US treasury secretary, Scott Bessent, say China was playing with a “pair of twos”?

Trump’s full viciousness is reserved for Canada, a Five-Eye and core NATO loyalist, so dependable that America can leave its entire northern border undefended. It is punished with 35pc tariffs, hit harder because it dares to differ on the Middle East, though the effects will ricochet straight back into the US economy.

US-aligned Taiwan gets 20pc and a landing ban in New York for the country’s president as Trump curries favour with Xi Jinping. The Swiss get 39pc for failing to jump smartly to attention.

Brazil is outraged by 50pc tariffs explicitly intended to subvert the Brazilian judiciary and rule of law. Years of diplomatic effort to lure India into the Western camp are squandered by petulant 25pc tariffs plucked out of thin air and a burst of hectoring posts of Truth Social.

There is hardly a better way to keep the unnatural but menacing “BRICS” confederacy alive as the epicentre of a new global power structure dominated by China. Trump is achieving the near impossible. He makes the predatory communist dictatorship of China look almost attractive.

And if I sound angry, it is because I am. Nobody will forget this disgraceful abuse of American power.

The average US tariff rate will settle near 20pc. This is comparable in nominal terms to the Smoot-Hawley tariff act of 1930 but tariffs were already high before that infamous bill and the US was then a closed economy. Imports were just 5pc of GDP. They are 16.4pc today and include critical components that keep the productive machine going.

“We’re looking at a shock to the economy seven or eight times as big as Smoot-Hawley,” said Paul Krugman, a Nobel laureate for trade theory.

Euphoric markets are wishing away the reckless demolition of a global trade system built, led, and painstakingly nurtured by the US for 80 years. “People just keep wanting to believe that Trump is making sense, that he isn’t as ignorant and irresponsible as he seems. But he is,” said Prof Krugman.

US economic growth slowed to 1.1pc in the first half of the year. You have to combine the two quarters because tariff “front-running” distorted the GDP data. The relevant metric is that real final sales are the weakest since 2022.

“We estimate that real personal consumption has now stagnated on net for six months, which rarely happens outside of recession,” said Jan Hatzius, the chief economist at Goldman Sachs.

If you think America is booming right now, you are looking a) in the rear view mirror, and b) at the wrong data. The next year will see a drip-drip of accumulating damage as stagflation hits with the textbook delay.

Trump’s tariffs are a tax on the US consumer. Maury Obstveld, ex-chief economist at the International Monetary Fund, says the pass-through from the Trump 1.0 episode was total.

“Not only did the prices of tariffed goods rise, they rose by the full amount of the tariffs. American households and businesses bore the entire burden; none was shifted to foreign exporters,” he said.

The well-informed are watching the US bureau of labor’s monthly index of pre-tariff prices for imports. This rose in June. It is the smoking gun that tells us who is really paying the tab. The Yale Budget Lab says consumers will face price rises of 40pc for shoes and 38pc for clothes.

Read the rest here.

This needs to be read in its entirety. 

Various 07-09-25

Trump Hits Brazil With 50% Tariff Over Bolsanaro Trial

Trump sends more letters dictating high tariff rates around the world

Judge orders Jan. 6 rally organizer to pay $2K daily until compliance with subpoena

US sees record number of measles case

Abbott announces redistricting will be included in Texas special session

Greene says she’ll move to stop additional military aid to Israel

Trump's 50% copper tariff could raise the cost of appliances, EVs and other goods

FBI launches probes into former FBI, CIA directors

Senate GOP not happy with Trump beatdown of Tillis 

Ambrose Evans-Pritchard: Trump has dropped a big, beautiful bomb on America’s economy

China’s leaders must be wondering whether they are hallucinating or whether America’s political class really has lost its mind, committing economic and geopolitical self-harm on a breathtaking scale.

Donald Trump’s “big beautiful bill” marks a wholesale retreat from swaths of advanced manufacturing and energy technology. It abandons a central front of the Sino-American superpower contest without a fight.

“Utterly insane and destructive. The bill will cause immense strategic harm to our country,” said Elon Musk, now the arch-apostate, perhaps soon to be punished, asset-stripped and deported.

The big bill is the latest in a series of Luddite measures that let China run away with the electro-tech revolution and much of the future global market for cars, trucks, short-haul aviation, home heating and cooling, smart grids, power storage and the products that deliver the cheapest energy ever known to man.

The think tank Ember says China is electrifying its economy at a rate of 10 percentage points a decade. It has already surpassed 30pc of final energy, well on its way to becoming the world’s first electro-superpower.

America has been stuck in the low 20s since 2008, lulled into complacency by its fracking boom. Europe has missed the boat too, without the same excuse. It talks big on electrons without delivering much, while clinging to imported molecules for its economic existence, failing to compete successfully on either.

The woke and the anti-woke are still arguing about renewables but we are past that developmental phase. The big trillions are going to be made in the ways we use electricity. The International Energy Agency thinks the vast electro-tech market will be eight times larger than renewables by 2035.

Trump’s America is betting that it can freeze time and stop this, doubling down on fossils and hoping to force others to go with them as a condition for military protection and market access. Trump is linking trade deals with Japan, South Korea and Europe to increased imports of US liquefied natural gas (LNG). He is even demanding that the EU changes its law and embraces the joy of methane emissions.

China is betting that you cannot halt a technological steamroller or force the world to act against its own economic self-interest.

Read the rest here.

Europe considers global free trade pact (without America)

BRUSSELS — Late at night, after a dinner of dumplings and duck legs, the European Union’s leadership excitedly revealed a new plan to combat the hell-raising American president’s trade war: Take him on at his own wild game.

For six months, Donald Trump has upended the global trading order, threatening and announcing tariffs, then easing them to open negotiations, while warning that punitive levies will be reimposed if the terms are not to his liking.

With just 13 days until the Trump-imposed deadline to conclude a EU-U.S. deal, European Commission President Ursula von der Leyen decided the time for conventional negotiating tactics was over.

She floated the idea that the EU’s 27 countries could join forces with 12 members of the Asian-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership bloc (CPTPP) — which now includes the U.K. — to form a new world trade initiative. 

The new grouping would redesign a rules-based global trading order, reforming or perhaps even replacing the now largely defunct World Trade Organization, she said.

Crucially, the U.S. would not automatically be invited.

Read the rest here.

Trump Launches Trade War with China, Mexico & Canada (JP Morgan Chase Stockpiles Gold)

President Donald Trump has signed tariffs on goods coming into the U.S. from Canada, Mexico and China, the White House said Saturday, raising the risk of a trade war with America’s closest trading partners and threatening to drive up prices on everything from cars to avocados.

It is unclear when the tariffs will take effect.

Canadian energy products would have a lower tariff rate of 10%.

Trump said he was imposing the tariffs because he claimed the countries were allowing fentanyl to come into the U.S. More than 107,000 people died from drug overdose in 2023, with nearly 70% of those deaths from opioids, including fentanyl. Trump also said the tariffs were in response to a trade deficit between the U.S. and the three countries because the U.S. imports more from them than it exports.

Economists across the political spectrum expect tariffs to increase what consumers pay for a range of goods, including vehicles, electronics, produce and lumber. Tariffs are paid by companies importing goods into the U.S., similar to a tax.

Read the rest here

Meanwhile, JP Morgan Chase is airlifting $4 billion in gold bullion to its New York vaults.

Lloyds and DNV withdraw Certification from all Russian Ships

These are two of the world's largest entities that certify ocean going vessels, including super yachts, for insurance purposes. What this means, is that any Russian ships certified by either of these entities may now be operating without insurance. This is a bit complicated as there are other certifiers, but these are the two used by the vast majority of ships and luxury yachts. In order to enter ports and refuel, most ships are required to show evidence of insurance. I'm not certain if this applies to all vessels owned by Russian entities or just Russian flagged ships. But this has the potential to be highly disruptive.

Update: At least one source is suggesting this is primarily being done to vessels owned by sanctioned persons, which would mostly limit it to luxury super yachts owned by Putin's cronies. More than a few of which have suddenly left their ports and turned off their satellite tracking beacons, which is against maritime law.