Nobel laureate Paul Krugman argues that Donald Trump’s economic policies, despite their appeal to the working class, will ultimately harm them. Krugman criticizes Trump’s plans to raise tariffs and cut taxes, predicting that these will increase prices for everyday goods while disproportionately benefiting the wealthy. The economist highlights the disconnect between Trump’s promises of lower grocery prices and the reality of rising inflation, characterizing this as a “scam” due to a lack of a viable plan. Furthermore, Krugman warns of negative consequences from Trump’s proposed tariffs and mass deportations, anticipating significant economic disruption and higher prices.
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In response to President-elect Trump’s threatened 25% tariffs on all Canadian goods, Canada is preparing retaliatory tariffs on various American products, including orange juice, toilets, and steel. This response mirrors Canada’s actions in 2018 when similar tariffs were imposed. The proposed Canadian tariffs aim to counter Trump’s economic coercion tactics and his inaccurate claims regarding Canadian resource dependence. High-level Canadian officials have dismissed Trump’s suggestion of Canada becoming the 51st state as a serious negotiating tactic, characterizing it as a distraction from the economic implications of his proposed tariffs.
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President-elect Trump reiterated his desire for a U.S.-Canada merger, threatening economic coercion if necessary, citing alleged substantial U.S. subsidies to Canada and significant trade deficits. Prime Minister Trudeau firmly rejected this notion, stating that such a merger is impossible. This stark contrast highlights escalating tensions between the two nations, particularly concerning trade and the potential imposition of U.S. tariffs on Canadian goods. President Biden, in contrast, praised Trudeau’s leadership and the strength of the U.S.-Canada alliance.
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President-elect Trump threatened the European Union with tariffs unless it significantly increases purchases of U.S. oil and gas, citing a $209 billion trade deficit. This demand, while unclear on specifics, follows previous attempts to boost U.S. energy exports to Europe. However, the EU lacks a central authority to fulfill such large-scale commitments, and experts suggest this is likely posturing for future trade negotiations. Despite a substantial trade imbalance, the relationship is complex, with significant intra-company flows of goods obscuring the full picture. The feasibility of Trump’s demands is questionable given existing energy market dynamics and the inability to mandate purchases.
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President-elect Trump has threatened the European Union with tariffs unless it significantly increases its purchases of American oil and gas, citing a large trade deficit. This threat follows Trump’s first post-election trip abroad, and comes as the EU has strengthened its trade defenses against such coercive practices. The EU is already a major importer of US LNG and crude oil, but Trump’s “America First” approach signals potential significant trade disruptions. His past actions involving tariffs on steel and aluminum demonstrate his willingness to pursue protectionist policies. The EU has vowed a unified response to any aggressive trade actions from the incoming US administration.
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Ontario Premier Doug Ford advocates for Canada and the U.S. to collaborate against China’s economic influence, particularly its use of Mexico as a backdoor for circumventing trade rules. He prefers this collaborative approach to a damaging trade war, despite acknowledging energy export restrictions as a potential retaliatory measure against U.S. tariffs. Ford urges Mexico to choose sides, aligning with the U.S. and Canada rather than China, emphasizing the detrimental impact of cheap Chinese goods entering North America via Mexico. He highlights the potential for significantly increased gas prices should tariffs be imposed on Canadian energy exports.
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In response to President-elect Trump’s threatened 25% tariff on all Canadian goods, Ontario Premier Doug Ford threatened to cut off energy exports to the United States. This drastic measure, discussed amongst Canadian premiers and Prime Minister Trudeau, stems from concerns that the tariffs would devastate the Canadian economy and harm American consumers. While the extent of energy cut-offs remains unclear, the move underscores Canada’s resolve to retaliate against what is seen as an unjustified economic attack. Canada’s significant energy exports to the U.S. make this a powerful potential countermeasure.
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John Q. Hosedrinker