All Quiet on the Canadian Front
If there are tariffs, Americans are going to pay them — in the form of higher prices, fewer choices and growing poverty. Tariffs are just another way to get wealth from 'The People' to the elites.
Tuesday, February 4th, 2025
Bill Bonner, writing from Baltimore, Maryland
The trumpets blew. The bands were warmed up. Soldiers said goodbye to their sweethearts… hoping to come home heroes.
War!
“It’s the dumbest trade war in history,” says the Wall Street Journal, perhaps exaggerating. President McKinley’s tariffs were pretty dumb too. And let’s not forget Smoot and Hawley.
The latest irruption began on Saturday with bluff and bluster, as all wars do. Donald Trump said the foreigners were ‘ripping us off.’ He promised a swift victory that would make us all ‘as rich as Hell.’
Mr. Trump thinks tariffs will be a big winner because we’ll be taxing, not only residents of the US, but foreigners too. Why the foreigners will be willing to pay taxes to the US has yet to be explained.
But if there are any tariffs, Americans themselves are going to pay them — in the form of higher prices, fewer choices and growing poverty. Like taxes and inflation, tariffs are just another way to get wealth from ‘The People’ to the elites.
One of those elites was licking its chops yesterday. Here’s Fox:
'America First': Largest steel producer in US announces support of Trump tariffs
"Nucor applauds the first steps taken by President Trump in his America First Trade Agenda," Leon J. Topalian, the chair, president and CEO Nucor Corp., wrote in a statement dated Friday that was obtained by Fox News Digital. "We look forward to working with President Trump to enforce our trade laws and strengthen American manufacturing!"
Classic win-lose politics. The few — steel company owners, its unions and its lobbyists — win. The rest of us pay higher prices.
But wait. What’s this?
We were just getting a case of war fever… our temperature rising as we awaited the Mounties attacking from the North, while Pancho Villa charged across the Rio Grande… ’… when the wily Trump called it off. The Washington Post:
Trump halts tariffs on Mexico as it rushes troops to border
In a dramatic, last-minute move, the Trump administration agreed Monday to pause sweeping tariffs on Mexico for a month while the two sides hammer out an agreement on security and trade, the U.S. and Mexican leaders announced.
President Claudia Sheinbaum said on X that in a “good conversation” with President Donald Trump, Mexico committed to rushing 10,000 national guard troops to its border to try to block the flow of drugs into the United States — especially fentanyl.
An hour or so late, the New York Post:
Canada announces US tariffs on hold for 30 days after Justin Trudeau holds ‘good phone call with President Trump’
“Canada has agreed to ensure we have a secure Northern Border, and to finally end the deadly scourge of drugs like Fentanyl that have been pouring into our Country,” Trump announced on Truth Social, following the call with Trudeau. “Canada will implement their $1.3 Billion Border plan.”
Whew!
It turned out that the trade war was not a trade war at all… but just a new theater in the drug war!
The feds have been fighting since the ‘war on drugs’ was declared in 1971. That’s more than half a century in the trenches at a cost of more than $1 trillion.
We’ve grown old waiting for the victory parade. It never comes. Instead, there are said to be 1.5 million arrests for illegal drugs annually… a half a million people in jail on drug charges… and 80% of all opioids produced in the world are consumed by Americans.
But it’s an ill wind breaking across the Potomac that does no one good. The War on Drugs enriched both cops and robbers. Drug dealers enjoyed higher margins — since the feds, in effect, placed “tariffs” on drug imports, restricting supply. Private prison companies, too, enjoyed a huge boost. And the law enforcement industry at all levels — public and private — gained power and wealth they had never before thought possible. (The Drug Enforcement Agency has nearly 5,000 special agents, many of whom are bumping up against the fed’s $191,000 pay cap.)
Yes, there are winners and losers in trade wars, drug wars, and hot wars too. The winners are the usual ones — the ones who make campaign contributions and have lobbyists to whisper in the commander-in-chief’s ear. The losers are the usual ones too — ordinary citizens…the collateral damage, who pay higher taxes, higher prices…and some of them, the highest price of all.
And now, with Field Marshal Trump feigning an attack on the right, while he smashes into the enemy from the rear… zigging and zagging…
Leaving almost everyone confused and aghast…
All we know for sure is that there are bound to be more casualties.
Regards,
Bill Bonner
Market Note, by Tom Dyson
This excellent chart from Bianco Research shows rolling 3-year bond returns going back 225 years. The most recent 3-year loss is the worst 3-year bond loss in 184 years.
Meanwhile, sentiment in the bond market is the most bearish I’ve ever seen… led by heavyweight interest rate traders like Paul Tudor Jones and Stanley Druckenmiller who have publicly disclosed big short positions in US bonds.
In our paid research, we made a bet that long term interest rates wouldn’t go much over 5% (because they can’t, I said.) So we’re betting against these legendary traders. The bet expires in March. We’ll see.
Anyone with common sense knew he was using the tariff threat as a bargaining tool and it worked but the media that is so Trump deranged fell for it and tried to scare the American people. I am shocked by my lifelong democrat family members praising Trump as the first president in a long time that is actually putting Americans first. I think the harris/biden admin has really set the dem party way back. The media which is so extreme left biased (with the obviously exception of Fox) has lost so much credibility when everyone saw them lying to protect biden. CNN laying off and firing and msnbc is always declaring bankruptcy.
I usually abstain from commenting but this particular article struck me because whether DJT used tariffs or he didn't use tariffs he was just dumb. It seems to me that the previous administration allowed the overdosing of some 200,000 Americans annually and made no effort to stem the death toll. DJT should be praised for his outstanding gamesmanship. Love him or hate him, he gets results...the final outcome of many of those still to be determined