Oh goody! We can go through all this drama with Mexico, and Canada, again, in a month.
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I’m pretty sure that the President heard an earful from his billionaire friends when the Dow crashed on the open today. {{ LOL }}
intercst
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How could anyone be surprised? He has been proposing those tariffs for months.
More likely, the cronies knew it was a feint. So they went short Friday. Made a bundle this morning. Then went long, and make another bundle in the afternoon. Now, they are set up to do it all over again, in a month. Because the market, like the mob, has the memory of a gnat.
Steve
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It’s usually called a negotiating tactic. The US has a lot more leverage on tariffs than either Mexico or Canada, and we’ve been reading about it for months now.
DB2
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Canada found itself in a box. From the NYT:
Canada found itself in a precarious position on Monday morning after Mexico cut a deal with President Trump to postpone tariffs in exchange for a major deployment of forces along the border between the two countries…
But when Mr. Trump first threatened tariffs against Canada and Mexico in November, citing illegal migration and fentanyl flowing into the United States from both neighbors, some Canadian politicians rushed to throw Mexico under the bus…
Ontario’s premier, Doug Ford, a prominent voice on the topic, and others suggested that the United States should form a separate deal with Canada and ditch Mexico. The argument focused on the vast difference between the two borders: Only a fraction of the undocumented migrants and fentanyl entering the United States come from Canada compared to Mexico.
While Mr. Trudeau did not suggest ditching Mexico, the relationship between the two countries suffered deeply. The senior Canadian official previously said that the trust between them had been reduced to zero.
DB2
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Remember the cadence with Iraq. over 20 years ago?
41: give up your WMDs!
Saddam: I got rid of them long ago. Here’s the documentation.
41: not good enough. give up your WMDs!
Saddam: send in the UN. Let them look for them
41: not good enough. give up your WMDs!
UN: we have been looking and looking. haven’t found squat.
41: not good enough. UN guys get out of the way. We’re going in.
So, will Canadian, Mexican, and Panamanian actions today be the end of it? Or will the US come back in a month and say “not enough, gimme more”?
Steve
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It isn’t really the border, it’s the dramatic difference in costs between Mexico and the rest of North America. Probably the US, Canada, the UK, and the EU could all be in a single free trade zone, because operating costs are close enough, country to country, so there would not be a “giant sukky sound” from one country that would cause so much unrest in the other countries. Yes, Romania, Serbia, and Poland are cheaper than Germany, but not anywhere near the cost difference between Germany, and Mexico.
But Milton Friedman said everything has to be made where it can be made cheapest.
Steve
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