Doug Ford burns his fingers playing with the big boys

Ontario Premier Doug Ford has tried his level best to insert himself forcibly into the conversation around US tariffs ever since Trump was elected (and even before). Although he is merely a lowly provincial premier, he clearly has national pretentions, and likes to be thought of as "Captain Canada".

A good part of the shtick he used to get himself re-elected last month revolved around his claim that he was the best Ontario leader to deal with the existential threat that Trump represents. He has travelled to the US many times to speak to US representatives, industry leaders and media outlets, although he has rarely been invited to speak to the higher-ups, the actual movers and shakers in this particularly sordid phase of American politics.

However, Ford's hankering to be seen as Captain Canada took a bit of a blow yesterday, when he went toe to toe with Donald Trump and came off with egg on his face. In the face of Trump's announcement of a 25% tariff on Canadian steel and aluminum, Ford gave it his best shot and announced a 25% surchage on electricity exports from Ontario to three US states, Minnesota, Michigan and New York.

Clearly expecting Trump to back off and walk back his tariff announcement after this masterful play, Trump, almost predictably, immediately doubled his tariffs to 50%. Ford then announced that he was abandoning his electricity surcharge, and the Americans, in their turn, reduced the steel and aluminum tariffs back to the original 25%. "Ontario won't back down", said Ford, hours before doing just that.

Good game. Trump 1 - Ford 0. Net result: the 25% tariffs remain. But Trump can do this stuff all day, he positively lives for it, and Ford came off looking rather foolish, with his tail firmly between his legs.

Ford is off to Washington again today to speak to the underlings (Commerce Secretary Howard Lutnick this time), chaperoned by federal Finance Minister Dominic LeBlanc. But I have a suspicion that Mark Carney and the federal government would much rather Ford butt out of matters beyond his pay grade, and maybe just leave it to the grown-ups. 

The federal government has already announced proportionate retaliatory tariffs on $29.8 billion of American goods. Does Ford really need to be poking his nose in and complicating things, even if Trump does think of him as a "strong man"?

A day later, Trump mused out loud that maybe the USA shouldn't be buying ANY electricity from Canada, the exact opposite of what Ford has been pitching for months. So, careful what you do and say, Dougie, it might come back and bite you (and us, the hapless residents of Ontario, that you're supposed to be protecting).

Don't like Musk? Disguise your Tesla

This is hilarious. You may have been reading about stickers on Tesla cars saying "I bought this before we knew Elon was crazy" and variations thereof. But now there are whole sections of the internet devoted to advice on the best way to remove the Tesla badge and logo from your car.

Even better, there is now a fully-fledged movement to replace the Tesla badges with the badges of other - less controversial and usually non-US-owned - car companies, like Toyota, Honda, BMW.

That's one unpopular guy!

A timeline of US tariffs (and their reversals

If you are losing track of all the various announcements of US tariffs on Canada and their subsequent reversals, you're not alone.

But Axios has created a handy little timeline, up until  March 11th at least, so you can see just how wild a ride this has been.

And we know that there are many more tariffs still to come, and almost certainly more reversals. In the meantime, both the Canadian and American economies are suffering and the stock exchange is nosedivng in the chaos. How long until the American people get properly pissed off with Trump? The rest of the world is already there.

Why Trump is so wrong on Canadian dairy tariffs

I'm already a bit bored with explaining just how wrong Donald Trump's proposed tariffs on Canada are, but here's just one more way they are wrong.

It varies depending on the day, and the time of day, but one of the things that send Trump apologetic, and has him blustering about how UNFAIR Canada is being to the US, concerns Canada's dairy imports, and he says he intends to charge Canada 250% tariffs back.

Now, you might have some legitimate concerns about Canada's internal dairy industry supply management system (I looked into it a few years ago), but vis-à-vis dairy imports from the United States in particular, the rules are set according to the United States-Mexico-Canada Agreement (USMCA, or CUSMA, or whatever awkward acronym you prefer). Yes, that's the successor to NAFTA that Trump insisted on renegotiating during his first term back in 2018.

Trump (and his cabinet minions) repeatedly rant about how Canada is charging the US "250% tariffs" on its dairy imports, and how we are treating American "VERY BADLY". The truth is, though, that those high tariffs (on a sliding scale, with a theoretical maximum of 241%) only apply only after imports reach designated maximum annual levels. Up until these levels are reached, the tariff on dairy imports from the US is ... zero. 

Furthermore, as both Canadian and US dairy industry figures agree, the zero-tariff maximum has never been reached in any category of dairy imports. So, Canada is charging the US precisely ZERO in dairy tariffs, not 250% or any other figure. 

And, remember, this is enshrined in the USMCA that Trump himself signed into effect in 2018, an agreement that he has called "the best trade deal ever made". Trump has also claimed that Canadian dairy tariffs were "well taken care of" during his first presidential term, but that "under Biden, they just kept it raising it". Nope. The dairy tariffs remain exactly the same as when Trump agreed and signed the USMCA; they can't be changed without renegotiating the agreement itself.

Of course, these are just facts, and no doubt Trump will have "alternative facts" to suit his case. Someone may explain all of the above to him and his trade team, but it is very unlikely to make a blind bit of difference. Legally, however, he doesn't have a leg to stand on. 

Who cares any more whem Spacex rockets blow up?

A second consecutive SpaceX rocket has blown up soon after launch (technically a "rapid uncheduled disassembly"!), with debris causing commercial flight delays as far away as Miami and Philadelphia.

That'll cost him a bob or two. Given how much people hate Elon Musk these days, few people are particularly upset.

The US government gets into gambling

With all the ridiculous antics going on south of the border, it's easy for things to slip through below the radar. One such thing may have immense repercussions, but has received relatively little attention, and that is Trump's announcement of a "Crypto Strategic Reserve".

The reserve, which is slated to consist of five different cryptocurrencies ' Bitcoin, Ether, XRP, Solana and Cardano - will likely put the United States inexorably in the perilous business of buying and selling cryptocurrencies, in line with Trump's stated desire to establish the United States as the crypto capital of the world. It was mentioned only tangentially in an executive order on digital assets issued in January, but is still largely unexplained and unclassified.

Trump, of course, hopes to make vast profits from such a stockpile of the notoriously volatile and speculative investment. But, as we have already seen with Bitcoin and other cryptocurrencies, they can just as easily result in huge losses. Given that cryptocurrencies are purely speculative, and not backed up by actual assets in the way that a gold reserve is, for example, many people are questioning whether the US government should be involved in such a risky venture.

The US is already known to hold about $17 billion in bitcoin from criminal seizures - digital currencies are notoriously prone to hacking and other criminal uses (just last month, North Korea hacked $1.4 billion worth of Ethereum, the largest single digital robbery ever carried out) - and it is assumed that they will now be in the market for much more, as well as in the other digital currencies mentioned, and all five currencies have seen significant spikes in value in anticipation, although followed by a sharp drop and sell-off. 

There are rumours that the government is looking to obtain abound a million bitcoins alone, worth around $86 billion, which would put it in a position to substantially influence the market. If it uses these bitcoins to, for example, pay off some of its (real) debts, that could cause the value of bitcoins to drop precipititately. 

The only other country that has tried this is El Salvador, whose foray into crypto as legal tender and as a national strategic reserve ended in ignominious failure, as it has had to abandon most of its crypto plans as a condition of a much-needed IMF loan.

Trump already has personal ties to various digital currencies, and even issued his own $TRUMP cryptocurrency, which promptly tanked, down over 80% since its launch (a parallel $MELANIA coin is down over 90%). 

Trump, ably abetted by Elon Musk, is also doing away with many of rhe regulatory safeguards that has kept the crypto business in check for years. But, even so, there are many, even in the crypto business itself, that question whether this is something that governments should be involving themselves with. For example, is it right that a government uses taxpayers finds to backstop the price of cryptocurrencies, and worry about the lack of clarity and transparency in the reserve. 

XRP, Solana and Cardano are relatively obscure digital currencies - why were they chosen? (David Sacks, Trump's crypto "czar" is known have some conflicts of interest with a couple of them.) Should one institution (the federal government) have so much power over a currency that is supposed to be decentralized. People also worry that a crypto reserve could be funded by taxpayer dollars, representing a transfer of money from everyday Americans to wealthy crypto bros and billionaires.

Some question whether the Trump administration actually understands what it is getting into. It's not even totally clear whether Trump has the legal authority to create such a reserve. The US has a strategic petroleum reserve, a strategic medical equipment stockpile, even a helium reserve, but crypto has essentially nothing backing it and no intrinsic value, so it represents a very different prospect.

The whole thing just smacks of the kind of sleaziness and amateurishness that the MAGA crowd excels in. But this particular example of Trump ineptitude could have extremely large repercussions. It could even have implications for the US dollar's role.as the world's primary reserve currency, although personally I think that particular claim may be overstated, and I have read nothing to back it up.

Republicans need to snap out of it, and soon

As Donald Trump pauses his tariffs on Mecico and Canada's auto sectors, just one day after bringing them in, and then delays most other tariffs just a day later (insofar as they are covered by the CUSMA free trade agreement), even his MAGA followers must be realizing that the man has no idea what he is doing. 

Trump is making random spur-of-the-moment decisions of huge import to both the US and other countries without any real plan or justification. He just does whatever he feels like when he gets up in the morning, in what has been labelled "government by chaos". Every day is "unprecedented" in some way or other, and it doesn't feel exhilerating or inspiring, it just feels exhausting and depressing. 

If his goal is to keep Canada and Mexico off-balance (and that's a big "if"), then I suppose he has achieved that, although how that helps him or America, no-one is quite sure. But he is also keeping American industry off-balance too. Trump says, "There will be a little disturbance, but we are OK with that". Most CEOs are too scared to comment publicly, but those that have are most definitely NOT OK with all the uncertainty and chaos.

As Democratic Representative Melanie Stansbury indicated with her handwritten sign that went viral after Trump's State of the Union speech, "This is NOT normal". Even Commerce Secretary Howard Lutnick is starting to look like a deer in the headlights as he tries to explain Trump's random decisions and equally random reversals.

Trump's Republican cronies must know all this. They must know that the talk about "fentanyl pouring over the border" from Canada is spurious, and not the actual reason for his tariffs (and is not even real). They must know that supposedly democratic countries can't just go around talking about annexing other countries and destroying their economies until they capitulate. They must know that you can't just abandon all your old allies and multilateral organizations, and suddenly support a country that had been an implacable enemy for decades. They must know that American industry and the stock exchanges are reacting with panic.

All this is not the behaviour of a sane, serious politician. But the Republicans, thus far at least, seem willing to go along with it, repeating his nonsensical arguments to the press day after day. It's almost like they are hypnotised somehow by Trump's certainty, by his star power. When a Democratic congressman had the temerity to protest at Trump's wild State of the Union speech the other day, MAGA Republicans merely rallied round, chanting "USA! USA!" like a football crowd, or a gang of kids. As though that was a valid response, as though a supposed show of vocal patriotism outweighed everything else.

It's all kind of disturbing and sad. You have to hope that some day soon they will wake up and shake themselves, mumbling, "Wha... Where am I? What has been going on?" Because this is like a fever dream, almost completely divorced from reality. Unfortunately, though, it's all too real. Make America Great Again? If they only realized what damage they are doing, and how long (if ever) it will take to fix.

The dubious legality of Trump's tariffs

If you were thinking, hold on, Trump's tariffs on Canada can't possibly be legal, then yes, that's quite right, but probably irrelevant. An expert on international trade law lays it all out.

Firstly, yes, we have a free trade deal with the USA. Known to us as CUSMA (Canada-United States-Mexico Agreement) and to the Yanks as USCMA (and probably to the Mexicans as MUSCA, which is the easiest one to say), President Trump signed it himself in 2018 (and the final version in 2020), and it replaced the original 1994 NAFTA agreement. And yes, Trump's tariffs are a clear violation of CUSMA, which explicitly states that member countries cannot simply increase tariffs unilaterally.

And yes, there is a dispute mechanism involving a legal panel. Canada would probably win any such dispute, even if the US uses various national security defences (Trump is mainly using the International Emergency Economic Powers Act - IEEPA - to justify his tariff impositions). But if he is willing to directly contravene the wording of the Agreement, it is unlikely that he will care much about a ruling by some dispute panel.

There is also the World Trade Organization (WTO), of which the US is still technically a member, although Trump has repeatedly threatened to withdraw from it. Canada would probably win a case before the WTO too, but Trump is unlikely to abide by any decision (and could just pull out of the organization if it suited him). The WTO has no real teeth to enforce its rulings.

Of the two, the CUSMA route is probably the best bet, although, as has been said, Trump does not appear to care about the agreement, or about legalities in general. He would just steamroller through regardless. Although such a case could be brought relatively quickly (meaning within a year!), the US could stall the process of picking a panel for quite some time, and the majority on the panel is decided by (quite literally) a coin toss, which is a bit bizarre.

There is also the possibility that US domestic lawyers could challenge his use of the IEEPA, which was never intended to be used for tariffs against a friendly nation. The Government of Canada could be involved as an amicus (intervenor) in such a case.

All of these legal remedies, however, take time, and in the meantime both Canada and Mexico (and the USA!) are suffering economically. And there is no guarantee that Trump would abide by any legal decision he doesn't like; he is past the point of concern with legal niceties. It may still be worthwhile pursuing from an international optics point of view, but again, Trump does really not care about optics, and the rest of the world already knows he is in the wrong.