Northern exposure

The paint guy, Dave, wanted to discuss Trump while we waited for my ceiling mix to jiggle. Apparently he has a lot of family and friends south of the line.

So, whadda they think? I asked.

“They’re terrified,” he said. “They have no idea how it happened and what might come next. I hear everybody is sitting on their money now, not spending. Trump, Kennedy, Musk… some of these people are just nuts.”

Well, two weeks from tomorrow we find out how nuts is nuts. Tariff Man has not retracted that promise to whack us (and Mexico) with a 25% penalty on Day One. January 20th. The prime minister says this would have “profound implications” for the Canadian economy. Retaliatory measures would likely be implemented. Most economists forecast a recession in Canada as our exports plunge. The economy would shed jobs. The dollar would fall further and inflation result. Bank economists say a 25% levy which lasts a year or so could take the loonie to 56 cents US. Inflation would double, from around 2% back to the 4% range. Interest rates would stop falling. They might increase. Scotiabank says by 190 basis points.

Needless to say, the quad whammy of recession, inflation, unemployment and rising rates would be an anathema for real estate.

Could all this really happen?

Some say Trump is just being Trump, following his ‘art of the deal’ formula of scaring people into subservience and submission. Despicable, of course. But survivable. Others say the 78-year-old with a short runway of two years (before midterm elections), nothing to lose, an iconoclastic nature and an innate disregard for the people who elected him should be expected to do shocking things. Like gutting trading partners.

Nothing will be for sure for two weeks. In the meantime, investors should chill. Exporters should get ready.

Blog dog Don sends an example. “I’m on the mailing list of a good outfit that sells conspicuity lighting products to motorcyclists, and received this today from them addressed to their US clients,” he writes. “Well written, and what every similar company should be doing right now. Just an FYI as we await Jan 20.”

This is what AdMore Lighting is telling is Yankee customer base:

In less than 3 weeks from now, Donald Trump will be sworn in as the 47th President of the United States. Donald Trump has vowed to place a 25% tariff on all imported items from Canada and Mexico (in addition to China) on his first day in office.  This means anything that you order from Canada (which is where AdMore is located) will attract the 25% tariff.

Our pricing going forward will remain unchanged but before you receive your order from AdMore, you will need to pay the 25% tariff to the US Customs and Border Protection Agency on the full value of your order.  Of course, this will significantly increase the cost of buying from us, but it is completely out of our control.  We are hopeful that this will be resolved quickly and that we can go back to having a free trade corridor again (as we have had for so many decades) where goods can flow freely (both ways) across the Canada/US border without any delays or extra costs.

We wanted to make you aware of this situation (in case you weren’t already aware).  If there is anything that you are looking to get from AdMore, we recommend purchasing before January 15th so that we can get your order across the border and delivered to you before the expected tariffs kick in.

Thank you for your understanding and your loyalty and we hope that we can return to business as usual in the very near future.

Unknown is how many people work at this company. Or how a tariff of 25% on its products would affect sales. Also uncertain (and improbable) is the realization of US customers that they’ll have to send a hefty payment to American authorities every time they accept delivery from the north.

Tariffs will increase US consumer prices, just as they will damage Canadian exporters. Our lower dollar may offset some of that carnage because maple shipments will cost less. But the currency decline will certainly rekindle price escalation here, whack grocery bills, stifle consumer confidence and put people out of work.

Nobody wins a trade war. Even an angry old guy with a personal agenda of arson.

About the picture: “Happy New Year Garth!” writs Margaret. “Thank you for all your time and effort presenting your blog. It’s greatly appreciated. This is Sunny, my Akita Great Pyrénées Mix, just turned two years old. When she was a few months old she was accidentally run over by a vehicle. With the help of many kind people, she was rescued and given major surgery with follow up convalescence. She was ready for adoption, actually around the time I decided to adopt another dog. Sunny is living an active contented dog life here in Smithers, BC.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/01/05/northern-exposure-2/