Is Canada at risk?

Investment Analysis Clubs Macro Economic Trends and Risks
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We all read commentators but it’s different when the leaders of countries make statements.

Trump Says He’s Serious About Wanting Canada to Become 51st U.S. State

By Jill Colvin / AP, Time, February 9, 2025

President Donald Trump said he is serious about wanting Canada to become the 51st state in an interview that aired Sunday during the Super Bowl preshow…

“I think Canada would be much better off being the 51st state because we lose $200 billion a year with Canada. And I’m not going to let that happen,” he said. “Why are we paying $200 billion a year, essentially a subsidy to Canada?”… [end quote]

Trump’s Golden Age Begins With a Brutal Trade War

If tariffs evolve from a negotiating tactic to a new normal, economic and diplomatic costs to all of North America will grow

By

Greg Ip, The Wall Street Journal, Updated March 6, 2025

…
Trump’s decision to effectively repudiate the North American free-trade pact he himself negotiated in 2018 flows from a lifelong belief that allies and trading partners are freeloaders who diminish rather than augment American wealth and security. A similar mindset explains his decision to cut off aid to Ukraine and signal diminished support for Western European security.

He insists tariffs will make America rich. But this is true only in a relative sense.

If the tariffs stay, Canada and Mexico are likely both headed into deep recessions followed by years of painful adjustment to lost access to the massive U.S. market…

“What Canada and Mexico have to do is build their car plants, frankly, and other things, in the United States, in which case you have no tariffs,” he said…

With Canada, his aims are more ambitious, and ominous. He has said Canada can avoid the tariffs by becoming part of the U.S. “What he wants is to see a total collapse of the Canadian economy, because that’ll make it easier to annex us,” outgoing Prime Minister Justin Trudeau said Tuesday…

In Canada, Trump’s tariffs and professed aim of annexation have aroused a wave of nationalism and anger with little modern precedent… [end quote]

There’s no question that Canada is at economic risk from Trump’s hostile intent with tariffs. Transferring manufacturing from Canada and Mexico to the U.S. would cause recession.

But is Canada at risk of being invaded and taken over by the U.S.? Remember how Hitler invaded and took over France in 1940.

It’s not typical of Trudeau to shoot his mouth off unless he takes the threat seriously, is it? Would he say something like this purely for political impact?

If the U.S. invaded Canada I would fight to defend Canada. (Picture a little old lady with an Uzi.) We need at least one sane country on this continent.

Wendy

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USAians, misled by Canadian niceness, forget that its private citizens are as well armed as USAians were in the 90’s and Swiss still are today, and both Canadians and Swiss I have met are far better shots….

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Which was, of course, eight months after France had declared war on Germany.

(Which was, of course, two days after Germany and the Soviet Union took over Poland. Which was, of course, a week after Germany and the Soviet Union had agreed to divvy up Poland.)

Please keep historical analogies in the semi-reasonable range.

DB2

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I would stand with you Wendy. I have nothing but respect for the Canadian citizens even if I did use to rib them when they came down to Montana for Canadian days.

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Sorry Bob but I do not kick the paraplegic, tear wings off of flies, nor make fun of the mentally challenged. Just saying.

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He is a freeloader, and everyone knows it. He wants to cut lease costs. Cut off the lease/rent payments to him as they are a major cost which need to be reduced to zero.

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Can’t say as I follow you. Who’s doing what to whom?

DB2

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Let me ask you a question. Do you believe treaties should be followed?

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Canada and Mexico can both pivot to trading with others. Both Mexico and Canada have better trade relations with the EU than the US does. Mexico is already shopping it’s oil to the far east. I have seen a couple youtube things saying Canada is inviting EU built EVs in. Canada’s only vulnerability is all it’s oil and gas pipelines feed to the US. Anything that ships by rail, like lumber, potash, and other minerals, is not so constrained. It took 3 years to build the Alaska oil pipeline, 800 miles, so Canadian fuels will not be able to get to the east coast for a while.

A proposed oil pipeline from western Canada to the east coast consisted of converting existing natural gas pipe, plus about 1000 miles of new construction.

Of course, when TIG turns his attention to beating up on the EU, he will probably extract an agreement to buy US oil and gas, so the Canadians are probably better off carrying on with their pipe to the west coast, and exporting to the secondary markets in the far east, as TIG clearly wants to have Japan and South Korea committed to buying US oil and gas.

Steve

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The TMEP is already operational, over 800,000 bbl per day to the west coast.

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Weirdly, but reasonably, the METAR board under Empress Wendy (besos! Señora Brava!) sees this subject as relevant for posts, as macro events now turn, and turn unusually quickly, on emotions normally waaaay off base.

After imaginig Wendy supportively in Canada, picture ancient gringo hömö me on the Mexican side of the Rio Grande with his antique family Winchester .38 repeater, surrounded by his cadre of extremely dangerous engineering mentees and tutees, all of us allied with narco-traficantes with mountains of made-in-USA arms. (Mexico is intensely patriotic and sensitive about both its existence next door to imperialist USA, its history of invasion from the USA, and the absolute necessity of getting along with the people of the USA.

Meanwhile my brother and nephews (expert shots all) will go whereever needed to protect the Bear Flag Republic from a tyranny directed from a desecrated white house.

We have the USA surrounded.

I (amazingly a Christian) aint going to accept the USA falling under an idolatrous tyranny, especially one that seems to intend to outlaw my very existence. Never! Aint going back.

However, my guess is that the new gang in power has proven so insanely incoherent, shallow, and damaging that it might eveb find our longtime loyal to the constitution oathbound*** armed forces unwilling to break faith with democratic institutions.

Apologies in advance to local censor. It is important to understand that macro economic prediction MUST examine and probe and predict regarding unstable uncertain political arrangements, as relative stability of governance is essential, definitive, for macroeconomic analysis.

*** I, _____, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to regulations and the Uniform Code of Military Justice. So help me God.

A lot could come down to how enlisted men respond to the bolded relative to the italics, all done by me.

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The thought occurs is if Putin gets Ukraine, who will defend Canada?

Looks like a gimme. State 51 here we come!!

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Noooooooooooooooooooo!!!

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So you think Canada can see Russia from their front porch? LOL

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Well, then, that leaves only 3Mbpd stranded without an exit. The proposed pipe to the east was supposed to have a capacity of 1.1Mbpd.

Steve

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this tariff game is going to trigger unforeseen consequences that are not necessarily welcomed.

A little pain? Doesn’t that sound like transitory? and see what happened to transitory.

Don’t invest in the US. Hit back.

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Trump is already looking to contract with private mercenary firms like Blackwater (now Academi) and the Devos Family if the US Military won’t accept his orders.

intercst

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LOL. No one wants me behind a gun. Would result in too much friendly fire, given the state of my skill with firearms. What I can do, and am doing, is supporting the Canadian economy by spending the Summer there, and hopefully doing a little representation of sanity from the south of the border.

The news shows Canadians stating they don’t hate Americans, just the gov’t. Frankly a little nervous about the truth of that, but who said diplomacy was easy?

IP

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Remember, oil from Canada to the US is priced based on different factors than previously. Previously, the oil was trapped because there was no practical way to get it (in bulk) to any ocean port. Keystone XL was to be that access to an ocean port–but Obama said “no”. He was correct, as usual. There was zero gain to the US, actually a significant loss to the US, if Keystone XL was built. TransCanada stated that fact in their official report to the Canadian govt about the consequences (to the US and Canada) if Keystone XL was completed. Hence, Obama said no.

Now the price of oil from Canada is higher than it used to be because much of that oil is no longer “trapped” in Canada, it can be shipped in bulk to an ocean port and thus sales of that oil, to customers who pay MORE than the northern US refineries, generate higher profits for Canadian businesses and Canada receives significant additional tax and other revenues as well as a result.

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