i've taken a look at the counter-tariffs and counter-measures and i'm going to shrug them off as irrelevant, while providing the following critical reaction to them. i don't think this is the best approach as it's inviting further retaliation and not worth it; canada does not benefit enough from this response to justify the threat of further retaliation. somebody might say trump would do it anyways. but i'm actually increasingly leaning towards the idea of collusion and a co-ordinated attack by the trump-carney coalition, which may be working together in reality, while creating the smoke and mirror distraction of a phony trade war. i'm not there yet, but it's looking like it. if this escalates into higher and higher consumption taxes, i'm going to conclude it's theatre, and a charade.

i think it's useful that the analysis be real and honest.

trump got the revenue source he wanted at what is in truth minimal pain to canada. we should have realized this is really about the us taxing it's own citizens and taken a different approach.

there are a few consumer goods in the list, like video games or clothes. does canada have a video game industry? how many clothes are manufactured in canada or the us at a less than premium price? these are consumption taxes, they aren't tariffs. let's be real about that. there's no domestic industry to protect.

likewise, as most of the items in the list are things companies buy in order to build or grow something rather than finished products, this is going to act more as a corporate tax than a consumption tax or a tariff. see, and this is why i'm starting to wonder about this.

canada just effectively created a 25-50% corporate tax hike targeted at a handful of sectors in the canadian economy. this might look like it's in order to protect canadian suppliers but, even if it does lead canadian businesses to buy more canadian inputs, it's still going to lead to price hikes in the price of these canadian goods. this is going to make a swath of canadian finished goods as well as canadian food processed with harvesters (wheat, canola, etc but also potentially peaches, cherries, strawberries, etc) more expensive and therefore less competitive. so, if they're going to enforce the tax on the capital investment, they should put the tariff on the finished good, right? tax the harvester, but tariff the canola; tax the wood, but tariff the table. but the point seems to be that they don't want to do that. the result is that canadian finished goods made with these inputs are going to increase in price and become less competitive, and no tariffs exist to mitigate it. if the companies making the goods fail, the companies making the inputs will fail, too.

a good rule of thumb - a rule of thumb because tariffs are complicated - is that you only ever put tariffs on finished goods, and never ever tariff inputs. i don't have a citation, but i feel like that's textbook, and that canada is making a fundamental mistake in poorly applying the economic theory of tariffs. these tariffs were clearly chosen to blindly match the ones put down on us in an emotional knee jerk reaction that either wasn't thought through or is intended to cause longterm harm to our economy. there's a reason economists don't like tariffs.

it's an open question if the revenue collected by the corporate tax hike will be enough to fund the retraining programs, but that's probably what they're thinking. 

i will reiterate that it would be better to provide tax incentives to buy canadian capital investmentsand perhaps to tariff the final products, if we must. but tarifding inputs is bad. it's scary bad. it's confusingly bad. and i'm concerned about what that suggests.

so, the result of these tariffs will be the following:

- a functional 25-50% corporate tax hike on firms operating in canada in the sectors impacted

- little to no effect on the protection of canadian industry

- high inflation on canadian finished goods in those secrors 

- no subsequent tariff on american  finished goods the canadian finished goods compete with

- less competitive canadian companies n those sectors 

- those companies selling less, failing, shedding employees

- canadian suppliers losing buyers and needing to sell

- failing canadian supplers.

oops.

tariffs are hard.

this guy was supposed to get it and not do this. he's not living up to expectations.