Trump imposes tariffs on uninhabited islands

Canada, unexpectedly, seems to avoided the worst of Trump's tariffs. But countries across the world are having to deal with them, including some rather bizarre ones.

Heard Island and MacDonald Islands are external territories of Australia, although closer to Antarctica than to Australia. They are tiny, uninhabited, barren piles of volcanic rock, covered in glaciers and home only to a colony of penguins. They are only accessible by a two-week boat journey from Perth, and it is believed the last time they were visited by people was some ten years ago.

But even these little islands - among the rewmotest places on earth and not even countries in their own right - have not escaped the attentions of Donald Trump's zealous tariff administrators. They too will see tariffs of 10% levied on any goods exported to the USA. This is because, the World Bank shows them as having exported US$1.4 of "machinery and electrical" goods to the US in 2022, although no-one seems to know quite what this might have been, given that there are no people and no buildings on the islands.

Are the penguins engaging in some clandestine business ventures that Australia knows nothing about? Anthony Scaramucci, Trump's ex communications chief, and now a vocal critic, quipped, "These penguins have been ripping us off for years". Good for the Trump administration for spotting this.

More examples of business inefficiencies come to light as tariff threats take hold

As Canadian businesses "pivot" (as they say) away from their excessive reliance on the USA to a more lateral inter-provincial trade, some pretty crazy stuff is coming out.

One example is that, already discussed, of vehicle manufacture, which apparently requires a crazy dance back and forth several times across the border.

Another example is described in today's Globe and Mail, concerning paper and box manufacture. A corrugated packing paper manufacturer in British Columbia has been used to importing paper stock from just across the border in Washington state, but is trying to do the right thing by switching to paper from Eastern Canada (Ontario? Quebec? New Brunswick? We are not told.)

But, the business owner complains, instead of taking less than a day from Washington, shipments take 10 days from Eastern Canada, and he is losing money hand over fist. Well, two things occur to me straight away. One is that it can't possibly take 10 days to transport paper from Eastern Canada to BC. The second is that, after the first shipment from its new source, whether that takes 10 days or less, subsequent shipments will be arriving daily with no delay (they will not have to wait another ten days for the second shipment). Yes, I understand that the distances are longer and the transportation costs are therefore almost certainly higher. But the delay is surely not an issue.

The third thing that occurs to me is that BC has many trees and paper mills. Why is the company bringing paper in from Eastern Canada anyway? "Or even longer from Europe", the article says. Why would they be even considering importing paper all the way from Europe?!

So much of this makes no sense to me. Apparently common business practices seem to defy logic. 

Another example in the same article underlines the issue. There is a recycled packaging and box company in Ontario that imports about 50% of its cardboard stock from the US (first question: why? Don't we produce enough "old corrugated container" right here in Ontario?) There is another similar recycled paper company in Ontario that gets almost all of its used cardboard locally, but then sends it to the US to be processed in its mills in New York. I kid you not.

These two companies are now in talks to swap their supply bases and avoid completely having to have their materials cross the border unnecessarily. This DOES make sense, and I applaud it. But the question remains: why has it taken Trump tariffs to bring these two companies together in this way? I thought capitalism and the free market was supposed to be really efficient and productive!

I'm sure there are hundreds of other examples of this kind of inefficiency and logistical absurdity, many of which may come to light as part of the current forced restructuring.

Most people will be worse off when we abandon the carbon tax

Gas prices are expected to decrease by as much as l8c a litre in Canada when the consumer carbon tax is repealed by Mark Carney on 1st April. Some people are all excited about that.

Unfortunately, they will also be missing out on $210 every quarter (that's what we receive for our carbon tax rebate, the actual amount varies depending on where you live). So, most people will be worse off in net terms: be careful what you wish for. We have an electric car and so don't use gasoline, so we will be precisely $210 a quarter worse off.

But gas prices have just gone up anyway, completely regardless of any carbon tax effects, in some cases by substantial amounts. In Brandon, Manitoba, prices have increased by 14.9c a litre; Calgary, Alberta 13.7c a litre; Kelowna, BC 11.8c a litre. It's not entirely clear why this increase is happening, but it seems to be an attempt by oil companies to take advantage of the situation. Alberta Premier Danielle Smith, long a vocal opponent of the federal carbon tax, is asking oil companies not to "rip off consumers". Good luck with that, Danielle. (This is the Danielle Smith who has been speaking to the Trump administration asking for a temporary halt to the tariffs because it's hurting Poerre Poilievre's chances of getting elected as Prime Minister. Her political instincts are less than trustworthy.)

This is the magic of the free market. These people will therefore see next to no net benefit when the carbon tax is lifted. They will not, however, be receiving their quarterly rebate payments. So, overall, they will be substantially worse off. Like I say, be careful what you wish for.

Most of Canada seems to be happy that the carbon tax is being repealed. Almost all the political parties are either resigned to abandoning one of the easiest, cheapest and most effective climate change policies, or positively gung ho in favour of it. It is the will of the people, they say. However, many people have apparently not really thought it through.

Should we be arming ourselves against the USA?

It's crazy to think that Canadians are seriously talking about beefing up out national security as defence against, not China or Russia, but our erstwhile ally, the USA. But that is where we find ourselves. 

Here's the scenario: the USA gradually frames Canada as an enemy by tying it to various political and territorial grievances, and questioning its legitimacy as a sovereign nation (that part is already happening, albeit largely based on lies); the USA gradually expands its rhetoric, painting Canada as an outright security threat, if only because we could at any moment restrict access to critical resources that the USA needs, like energy, potash, water, etc; with this pretext, the US would then end intelligence and miltary cooperation (e.g. NORAD, Five Eyes, etc); demands for territorial concessions, maybe starting with an adjustment to the border of the Great Lakes, would be backed by the explicit threat of military force; at which point a full-scale military invasion is not beyond the realms of possibility.

This scenario is perhaps not a likely one - 10% probability? 5%? 1%? - but as the article points out, its probability is not zero. We would then be very much in a Ukraine situation, and we know how that turned out. It therefore behooves us to prepare ourselves militarily for such an eventuality, so the argument goes. There are even those, in all seriousness, calling for a Canadian nuclear weapons program as a deterrent.

It's easy to pretend that such an eventuality is beyond all sober prospect. It's easy to assume that cooler, less unhinged heads will prevail, that the US courts or military will quash such a scenario before it comes close to reality, or that the American people themelves will rise up in the face of such an enormity. 

But, if that non-zero probability exists, can we afford to ignore it?

Quebec/Vermont library ruling just a sign of the times

It's extraordinary how knit-picking and petty the USA is being over its new-found zealousness on the border and immigration. A good example is the changes it's making to Canadian access to the storied Haskell Free Library and Opera House in Stanstead, Quebec.

Straddling the border line between Quebec and Vermont, the library and opera house were deliberately built right across the border line back in 1904, as a symbol of harmony and cross-border collaboration between the two countries. For over a century, Canadians and Americans have come and gone through the buildings without having to go through any border control or showing any paperwork. A black line through the middle of the library marks the actual border, but people have wandered back and forth across it for decades.

The official entrance to the library, though, is in the village of Derby Line, Vermont, USA, and Canadians have been used to just wwalking around the side of the building to enter it. But now, for the first time, US Border Control officers are insisting that direct access from Canada be closed, so that Canadians would have to travel to the next nearest official border crossing and submit to the usual American security grilling to gain access, even to the Canadian part of the library.

Locals, both Canadians and Americans, are incensed at the decision. There are plans to renovate an old Canadian entrance to the building, although money for such projects is in short supply. They have until October to make such adaptations as they can.

It's just another sign of the mean-spirited times we live in. If this is someone's idea of making America great (again), then it's hard to believe they can be so myopic and insensitive.

Relocating to the USA may not be a good optionnfor Canadian companies

Some Canadian companies are considering moving ("fleeing") to the USA to avoid the worst effects of Donald Trump's punitive tariff increases. Indeed, some have already done so. 

My first reaction is: this is exactly what Trump wants, so why would you have him the satisfaction? But, of course, the companies say, they are beholden to their shareholders, and they must do whatever is necessary to maximize profits and the dividends of their shareholders. 

Well, no, not everything. There are other considerations than profit at play here. Capitalism is not strong on ethics, but it behooves us all to to think about whether products are manufactured using forced labour, equitable and safe employment practices, reducing the environmental footprint, etc, etc. Modern and progressive shareholders demand that kind of thing too, right? Arguably, pandering to the whims and foibles of a crazy guy like Donald Trump is just such a moral imperative.

As we have seen recently, though, when push comes to shove, profits usually seem to "trump" ethics, and we have seen many major companies pulling back from their DEI commitments, their climate commitments, etc (and some never went there in the first place).

The other thing, though, is that it can be complicated and often costly to relocate from Canada to the USA, and it may not even be in the shareholders' best interesNasdaq.

One big impetus for relocation is the potential to get listed on US stock exchanges like the S&P 500 and Nasdaq. But there are already many American companies queuing up to get onto those listings, and it is by no means certain that a newly-located Canadian company will succeed. Plus, there are moves afoot that may soon allow Canadian and other foreign companies to be listed on the S&P index anyway.

There are substantial logistical, legal and other costs involved in redomiciling and establishing a company in a new jurisdiction. It may not even avoid tariff costs, even in the short term: remember, US tariffs hurt American companies even more than the foreign country they are aimed at (which is why everyone else is so confused at Trump's insistence on using such a heavy-handed and inefficient policy to further his aims), and the effects of potential relatiatory Canadian tariffs must also be taken into account. We don't actually know how long these tariffs will be in effect - the landcape changes daily - and relocating is a long and involved process. In addition, there may be significant (political and economic) backlash from the old country at such a move (as at least one Quebec company found to their cost).

Finally, companies should know that there is a 25% departure tax on the relocating company's assets, which for most businesses could prove the ultimate deal-breaker.

So, definitely not a slam dunk. And, in most cases, not a viable option at all.

Does Mark Carney risk conflicts of interest?

The Conservative Party of Canada, rattled by their precipitate slide in the polls, and with a federal election pending (widely expected on April 28th), are taking wild swings at new Liberal leader Mark Carney. In particular, they are trying to make something - anything! - out of Carney's enviable financial position.

Pierre Poilievre, and his attack dog Michael Barrett - yes, the attack dog of an attack dog! - have been casting aspersions that Mr. Carney is playing fast and loose with the ethics and conflict-of-interest rules that Canadian politicians are subject to.

Spoiler alert: he's not. Well, you might have guessed that. The whole raison d'etre of the Tories is to find fault, in any way possible, and even in some ways impossible, of their political nemesis. Deprived of Justin Trudeau as a convenient target, they have been trying to portray Carney as "sneaky", "European,", etc, and also as rich, which carries its own set of political value judgements.

Yes, Carney has done very well for himself - he has not been a lifetime career politician like Mr. Poilievre - and he is clearly a very rich guy. Do we need to know exactly HOW rich, and exactly where his riches lie? Probably not.

Suffice it that he is following the stipulated conflict-of-interest rules - enshrined in Canadian law by Conservative PM Stephen Harper, let it be noted - to the letter, even in advance of the required deadlines. So, he is divesting himself of his personal investment holdings by placing them in a blind trust, so that he has no control over sales and purchases. He will also recuse himself from any deliberations that might directly influence investment that he holds in trust (although those holdings could change without him knowing - that is the whole point of a blind trust in these circumstances). And he is pre-clearing everything with the independent parliamentary Ethics Commissioner. 

It's hard to know what else the Tories can ask for. There is no requirement to name and value his investments at this point, nor should there be. The Ethics Commissioner will be keeping a wary eye on him; that is his job. Yes, there are those who argue that a blind trust is not sufficient to guard against conflicts of interest. But most reasonable people - and all political parties - believe that that the system as it stands is indeed adequate.

Trumpism as a cult

What are we to make of the way in which Donald Trump's supporters support him? 

I don't mean that I am surprised that they support him, even in some of the more legally and morally gray areas that he tends to frequent, even in some of the completely random, unhinged, off-the-cuff decisions that he makes.

I get it that he is their Glorious Leader, and that many of them owe their overpaid positions to him directly. But there is something about the WAY they express their adoration that seems, well, unhealthy. Trump's excesses have given his supporters license to exceed in their own ways.

Because they don't just support him, they bow down to him. 27-year old Press Sectetary Karoline Leavitt is a good example. She will not brook even the suspicion of a criticism of Trump without responding in a completely aggressive and over-the-top (Trump-esque, you could say) manner. Take for example, when a French journalist suggested that today's United States is not worthy of the Statue of Liberty France gave them, Leavitt turns around and snaps that France should be grateful to the US that they are not now speaking German. There are many ways she could have responded, but she chose that way (exactly the way Trump himself would have responded). 

Another example? Stephen Miller, White House Deputy Chief of Staff and Trump "advisor" (whatever that actually means), when responding to criticism of the distinctly semi-legal manner in which the Trump administration used an 18th Century wartime law to deport over 250 Venezuelan immigrants, didn't just tear into the hapless reporter (a former prosecutor with much more legal expertise than Miller) but ranted in an all-but-uncontrolled manner "He is a moron, and he's a fool, and he's a degenerate ... now he's up there shilling for people who rape and murder Americans". See also Miller's unhinged response to a Saturday Night Live joke. (Incidentally, Trump has called for the judge who tried to enforce an injunction against the deportations to be impeached.)

These people seem to feel that Trump's regular enormities (which no-one outside the Republican Party consider acceptable) give them license to exhibit similarly outrageous and overblown behaviour.

The way they refer to Trump's policies and decisions, and the man himself, in tones of awe and reverence is nothing short of creepy. Secretary of State Marco Rubio says that Trump is the "only person on earth" who can negotiate with Vladimir Putin. Defence Secretary Peter Hegseth uses similar language, claiming that Trump is "the only man in the world" who can solve the Ukraine problem. And so it goes.

UPDATE: Here's another example. After Trump officials included an Atlantic journalist on a Signal texting group discussing secretive plans for US airstrikes on Yemen, rather than admitting to mistakes and apologizing (MAGA World, from Trump down, don't do admitting and apologizing), national security advisor Mike Waltz's response was to whine, "this journalist, Mr. President, wants the world talking about more hoaxes and this kind of nonsense, rather than the freedom that you're enabling". You could almost see him cowering and cringing as he spoke. Trump's response? "Michael Waltz has learned a lesson, and he's a good man". Moving on. If you think Waltz would have got away that without publicly prostrating himself and grovelling, then I think you are being naive.

This goes beyond deference; this is the stuff of personality cult. It is not party politics as we have always known it. You can imagine it happening in North Korea or Russia, where a false step can lead to a disappearance or secretive execution. But is that where the USA is now?

Trump has successfully purged the Republican Party of any elements even vaguely disloyal. He himself has said publicly, "We have to Purge the Party of people that go against our Candidates and make it harder for a popular Republican President to beat the Radical Left". It has all the hallmarks of authoritarianism en route to totalitarianism, where dissent is not just discouraged but forbidden.