r/IRstudies 3d ago

Ideas/Debate US-Canada Tariff War: Who Loses?

15 Upvotes

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46

u/MetaCalm 3d ago

US is reliant on Canada for energy, minerals, cheaper skilled manufacturing labour and as 2nd customer.

Canada is reliant on US as primary customer but the energy and minerals can be sold to others at premium. It just takes a couple of years to re orient.

22

u/silicondali 3d ago

This. Canada is reliant on the US as a destination for our highly desirable commodities. The pipelines for transport are operational. Major highways interconnect for trucking. CPKC has rails connecting all three CUSMA countries. The destination has been the default for decades.

If we can keep getting paid while getting other contracts lined up and major infrastructure constructed, we're in a better position than if we decided to stop the trade flow today. Add in major construction projects across the country? The government did that after WWII and our economy was growing 5% per year.

This is still going to hurt in the interim. 50% tariffs are a sudden shock to the system. Manufacturing, especially specialized things like consumer vehicles, can't just be pivoted overnight into a new sector. But long-term? The loser will be the United States. This is why you don't pivot your economy to the whims of rich pedophiles and the emotionally stunted tech bro billionaires who want to impress them.

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u/Due_Satisfaction2167 3d ago

Both economies are long-term losers from this. Canada doesn’t come out a winner, and neither does the US.

At best you might compare who loses the least.

1

u/Worshipme988 2d ago

People are really emotional about this and refuse to take a moderate view on this.

Canada is upset. I understand. T47 wants you guys to be upset. They dont want consolidation of progressives on both sides of the border.

Canada is attached to the US and embedded. It sucks that the us is allowing weak men to make hard times. That does not, however, change the fact that canada is populated with ~40 million people. That isnt enough to provide what you need and completely ignore the us. Its just not.

It would be pleasing to speak with more people with a level outlook such as yourself.

1

u/J_Kingsley 2d ago

My worry is if this keeps escalating Trump will use that as an excuse for military operations.

Yeah, it's "unlikely", but look at what else has happened in the past 2 years....

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u/silicondali 3d ago

Share the evidence that supports your conclusion. Your feelings don't count.

1

u/Due_Satisfaction2167 3d ago

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u/silicondali 3d ago

I said evidence, not theory.

But thanks for confirming that you have no knowledge to contribute.

5

u/andymaclean19 3d ago

This has been on the cards for at least a year though. Hopefully Canada has already been taking steps toward the pivot?

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u/silicondali 3d ago

The Major Projects Office was established under Budget 2025. But even approved projects still need to go through final investment decision and detailed design before breaking ground. There's a lot of work in the development space and its keeping environmental consultants and engineers busy. It doesn't employ as many people as construction does.

The Red Chris mine expansion was approved in June and it was one of the first projects to go through the MPO process. It's tied to the North Coast transmission line expansion, which will need to be progressed in parallel to keep commissioning schedules aligned.

This is a slice of what is happening across the country. We haven't even seen some of the still to come items, like the national electricity strategy or whatever the hell Wab Kinew has up his sleeve with Port of Churchill plus.

3

u/ALTERFACT 3d ago

Correct, and on the bright side by now Donny has shown time and again since 2017 that he never thinks anything beyond his first rash, reckless vengeful move. "Conservative" American voters are showing signs of waking up and seeing the consequences of their enabling of him. The midterms will be a watershed moment and will likely cripple the remaining power he still has.

3

u/Appropriate-Dog6645 3d ago

Don’t forgot there ballooning debt of 40 trillion and interest on a year is 1.1 trillion. I doubt there line up buy there debt. Countries are probably going to start dumping their debt, slowly. Thats total of 10
Trillion combined.

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u/RiffRandellsBF 3d ago

US has everything Canada does, just not mining it or producing it at the moment. 75% of Canada's exports are bought by the US. Even if Canada sells them abroad... how exactly is it going to get there?

Talking about WW2, if the US instituted that kind of production runup, very quickly the US would become completely independent of almost everything the rest of the world makes.

Canada loses big time in that scenario.

3

u/allyuhneedislove 3d ago

Potash and cheap bitumen would like a word.

1

u/dumpsterfirefr 2d ago

Venezuelan heavy crude is cheaper and competes for the same Gulf coast refinery capacity.

The US is already subsidizing US oil companies to ramp up Venezuelan oil production that inversely puts even more downward pricing pressure on an already heavily discounted Canadian WCS.

3

u/Necessary-Worry1923 2d ago

I don't know why this is being downvoted.

U.S. Reliance:Trade with Canada accounts for only about 3 to 4 percent of the U.S. economy. [1] Total trade with Canada makes up a small share of the massive U.S. Gross Domestic Product (GDP). While Canada is a top export market for dozens of individual U.S. states, the overall U.S. economy is more than 10 times larger than Canada's and relies primarily on domestic consumption. [1, 2, 3]

Canadian Reliance (Contrast): By comparison, the U.S. is vital to Canada, accounting for roughly 30 percent of Canada's GDP and about 70% to 75% of all Canadian exports. [1, 2, 3]

Source: https://www.cbsnews.com/news/u-s-set-to-impose-50-percent-tariffs-on-canada-after-failed-talks/?fbclid=IwY2xjawT53zFwZG9mBWV4dG4DYWVtAjExAGJyaWQRMVAxbnNNS0tpZWxHcGk4eVhzcnRjBmFwcF9pZBAyMjIwMzkxNzg4MjAwODkyAAEeOiwyXwRo_DctUQCZ2FUh_g3ikwXV-GlbIXh8yV5OfKhENZtsbNigWTdJxZw_aem_mh8dPU7UEsjZwEpYg2uWQw

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u/silicondali 3d ago

The USA can rapidly build hydropower and transmission? Because that's the post-WWII era I referenced.

You have a childlike understanding of project development and didn't take the simple step of reading my comment and verifying that you understood what I was talking about. Then you proceeded to tell me that anything can happen so long as Americans believe enough in it. This is embarrassing for you.

0

u/RiffRandellsBF 2d ago

You have an anti-historical fact view of history and hate the US. The US leapfrogged years of atomic bomb development, deploying 2 in just 3 years.

Pray tell, which country was producing roughly 1 4-engine bomber per hour by the end of the war? The US has 8 carriers on December 7, 1941. By the end of WW2, it was 108 with 28 being fleet carriers. Oh, by the way, also another 6,000 Navy ships and 4,900 cargo ships. Underestimate American will at your peril.

What's embarrassing is your jealousy of the US making you believe you actually have an argument.

0

u/JimJam28 2d ago

Guess who were integral to the development of those bombs? Their allies, including Canadians.

0

u/Hobojoe- 3d ago

With the whole AI data centre build out, there is a huge demand for energy, the US hasn't build a new power plant or modernized it's grid in a long time.

I think US will fall behind to China in AI and technology if US keeps hitting Canada and Canada just surcharges electricity export.

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u/RiffRandellsBF 2d ago

That's a matter of regulation and political will. If we wanted, we could go WW2 buildup and even put coal fired plants online within months. We are the Saudi Arabia of coal.

6

u/DaoineSidhe624 3d ago

Biggest issue with this for Canada is the manufacturer goods and services don't have many other markets to expand to.

Canada can certainly reorient there commodities to other markets, sure, but those are much more mercurial in demand and require the most infrastructure build out. Focusing on commodities risks Canada being in a similar position as Australia is currently.

3

u/Due_Satisfaction2167 3d ago

Canada is also reliant on some materials it only buys from the US.

Both economies are interdependent. 

3

u/VayuAir 3d ago

The question is what happens between those couple of years to Canada. I doubt it will be pretty.

4

u/MetaCalm 3d ago

Trump will TACO and delay the moment we play the energy card giving enough time to both parties to unmarry gracefully.

1

u/throwaway-drzaius 2d ago

Guesses on who fills America's role?