The Suicide Pact: Understanding Taxes, Tariffs, and Trade

The current narrative about North American trade and border security represents a fundamental misunderstanding of both economics and security realities.

Trade and Standards Alignment

Canada and the US maintain remarkably similar standards:

• Labor costs: Nearly equivalent when accounting for benefits
• Environmental standards: Parallel regulatory frameworks
• Worker protections: Matching safety and rights standards
• Corporate taxation: Comparable structures and rates

The Real Economic Impact of Tariffs

When we examine proposed tariffs on Canadian goods, the math reveals a disturbing reality for US consumers:

• A 25% tariff effectively increases American citizens’ tax burden from 30% to 44% on affected purchases
• On pretax income, this represents a staggering ~46% tax hike
• This tax burden falls entirely on US citizens while failing to address actual trade imbalances

The China Factor

In stark contrast to the balanced Canada-US trade relationship:

• US-China trade deficit: $279.4 billion (2023)
• Manufacturing labor costs: 1/4 to 1/5 of US rates
• Significant government subsidies occur in China
• China manipulates it’s currency to its advantage

The Border Security Reality

The current narrative ignores crucial facts about northern border drug trafficking:

• Primary traffickers: US citizens returning home to USA
• Current protocol: Canada checks entry to Canada, USA checks returns to USA
• Jurisdictional reality: US responsible for checking its own citizens when they return home

The absurdity of current demands becomes clear when we examine what “securing the border” would require:

• Should Canada monitor US citizens while in Canada?
• Install tracking devices on US visitors or spy on them?
• Duplicate US customs operations?
• Conduct exit searches before US citizens return home?

The Fentanyl Connection

The real threat comes from:

• Chinese chemical companies: Primary source of precursors
• Mexican cartels: Main distribution networks
• Maritime shipping containers: Primary concealment method and its extremely difficult to detect

Source for table below : Grok2

Tariff Economic Impact Analysis

The proposed tariffs create a triple negative:

• Higher costs for US consumers
• Reduced market access for Canadian businesses
• No impact on the actual sources of drug trafficking

Economic Warning Signs

The current economic landscape is particularly precarious:

• Persistent inflation despite Federal Reserve interventions
• Asset bubbles across multiple markets
• Currency devaluation concerns (Gold and Silver moving to all time highs and flight to even garbage crypto eg Fartcoin)
• Trade relationships under unnecessary strain

Adding tariffs between the US and Canada in this environment is like throwing gasoline on a smoldering fire:

• Reduced purchasing power for American consumers
• Damaged North American supply chains
• Weakened continental economic resilience

Market Vulnerability

The markets are showing classic pre-crash indicators:

• Overvalued assets across multiple sectors
• Persistent inflation eroding real returns
• Currency instability
• Trade relationships under stress and growing uncertainty can easily spook the market and start a selling frenzy that will trigger a return deleveraging and margin selling.

A trade war between USA, Canada and Mexico is going to

• Accelerate inflationary pressures
• Reduce market stability
• Weaken North American economic cooperation
• Distract from real threats (Chinese fentanyl precursors) and China’s unfair economic practices

The Real Solution

Instead of creating artificial barriers between natural trading partners, focus should be on:

• Addressing Chinese trade imbalances
• Targeting actual sources of drug trafficking
• Strengthening North American economic cooperation
• Maintaining stable trade relationships with trusted partners

The current path of trade restrictions and tariffs between the US and Canada is priming markets for a significant correction, potentially triggering a broader economic crisis. At a time when economic stability is crucial, creating artificial barriers between natural trading partners with aligned standards and values is not just counterproductive – it’s dangerous.

Waging an economic war between USA, Mexico and Canada is like entering into a suicide pact that will destroy our competitiveness and drive all of us to do more not less business with Asia. The huge wage differentials that have persisted for decades is what has lead to a gutting of USA and Canadian manufacturing. A trade war will be the final nail in the coffin.

Didn’t we both break away from Great Britain to put an end to mercantilism? We need to North American free trade and innovation more than ever. Other wise we will find ourselves back to a centuries old relationship ship of selling our raw materials overseas and getting finish goods in return.

51st State? Key differences between the USA and Canada include:

• Healthcare: The U.S. operates a predominantly private-insurance based system, whereas Canada has a publicly-funded, single-payer healthcare system providing universal coverage. This leads to differences in access, cost, and outcomes; for instance, Canada has lower healthcare costs and better health metrics like life expectancy and infant mortality. Both system’s could use some work but universal healthcare is a must for Canadian’s
• Gun Laws: Canada has strict federal gun laws that include mandatory safety courses, background checks, and restrictions on certain types of firearms, contrasting with the U.S., where gun laws vary by state and are generally more permissive, leading to higher gun ownership and gun violence rates.

On a lighter note, judging by social media commentary over the last couple of months, many Canadians seem open to the whimsical idea of becoming the 51st state of the USA.

However, no one wants to start a relationship with abuse, threats, and a lack of respect. Canada is deeply connected to the USA; we watch your sports, enjoy your entertainment, and use your social media apps. We even head south to escape our brutal winters for a taste of your sunshine.

There’s no need for extreme measures like tariffs; instead, the dialogue should begin with a straightforward ask about what the USA needs for better border security, if that’s indeed the concern. American’s most certainly don’t want to be spied on or to the rubber glove treatment when you visit or leave – that’s not how we roll up here. Let’s focus on solutions rather than escalation. We have a pretty good dating history don’t we? Let’s work harder to nurture it before we talk of getting married.