Ontario to Slap Export Tax on Electricity to U.S.
wsj.com
wsj.com
I hope provinces extend this to all critical exports, including potash, nickle, uranium and oil.
The US deserves to suffer for this trade war. You guys elected this dictator from Temu, you should bleed as much as he's going to make Canada bleed.
The US themselves are tariffing potash at 25% from Canada coming into the US.
In Canada
> Section 91(2) of the Constitution Act, 1867 gives Parliament exclusive jurisdiction over “the regulation of trade and commerce.”
OTOH, if Alberta asked for one, the federal government would comply.
Its been very controversial, especially because most of the land gows through Maine, cutting a line across it. Without doing much to improve Maine's grid. Mainer's passed a ballot initiative to halt the project, but courts ruled that Mainer's didn't have any right to halt the project.
So, the Central Maine Power (the power company) Corridor - officially called the New England Clean Energy Connect (NECEC) - was back on. With various rounds of tax increases for various states & federal grants. Total cost has gone from $1B to over $1.5b.
Conceptually seems like a good idea! It's so unfortunate that it's such a visible cut through & across the land. And now, with this madness, who knows what the future holds.
1.2MW is ~1600 HP, or two modern EV's at peak power. Let's hope that's not what all the fuss is for! :)
Oddly its Mexican tariffs that will have a bigger deterrent to Trump as his base is the red southern region of the US that take more Mexican imports.
Looks like inflation is back on the table for the US, and this time they've done it to themselves via higher prices from tariffs.
One other thing to watch is that this is currently weakening the Canadian dollar and Mexican peso, which means the USD is getting stronger which is the opposite of what Trump wants ultimately.
So far the markets in all countries just hate this news.
China has taken the following actions as well this morning
- China to Levy Tariffs on Some US Products Including Chicken
- China to Impose up to 15% Tariff on Some US Goods
- China to Levy Tariffs on Some US Products Including Soybean
- China Adds 10 US Firms to Unreliable Entity List
Smart as this targets the US farmers, so Trump is almost certainly going to do what he did last time and just print money and hand it out like candy to the US farmers.
The worst case outcome and one that analysts at all major sell site institutions are now considering to be a possibility is worldwide stagflation.
Normally the economy of one or two powerhouses is humming along while others are going through cyclical downturns which helps smooth things over.
The United States seems very determined to crash the entire worlds economy at the same time, which will mean all major economies will be printing and spending cash all at the same time in an effort to prop up their economies.
The US has just started their printing press, and Beijing has been doing so for a year to try and fix their already hurting economy.
The world is in for a lot of pain in the next 2 years.
and upstate NY is all republican voters which borders Canada. Id think that's the area that actually effected? Blue/Red state is misleading, you need to look at smaller areas to see how people voted. Its urban vs rural for the most part.
If there was a lot of domestic suppliers and (more importantly) a lot of domestic competition, inflation might be avoided. But none of that exists, so expect consumers to pay for the tariffs directly and then more.
This time, there are more tariffs coming at the same time, and the trick of moving production abroad to avoid steel tariffs is no longer viable.
Trump's 2018 tariffs were narrow enough that they were easy to digest. Trump's 2025 tariffs are fairly broad and we won't be able to move production around in multiple places to deal with it, so much of the economy is going to eat the cost directly. So if money supply stays the same, Americans simply reduce their lifestyle to compensate (buy 25% less stuff, eat 25% less food), but I don't think that Trump (as someone who is addicted to excess) will see that as viable, so money is going to be printed and injected into the economy somehow.
Despite not having concrete proof, I think there's a fairly plausible chain of events from tariffs to broader price increases. Trump's tariffs include a 10% tariff on Canadian oil and gas. If you're in a region that relies heavily on these things coming from Canada you're going to see prices go up on your monthly energy bills, fuel for your vehicle, etc. This also affects local businesses and directly increases their costs. Businesses can only absorb so much of an increase before they raise prices. Now you're able to buy even less between your increased monthly expenses and the higher prices in stores. This makes you go to your boss and ask for a raise just so you can keep up with what your purchasing power used to be. If your boss gives you that raise, the business sees their expenses go up again and may need to raise prices as a result.
In the scenario I described above, what step do you think won't happen that allows us to prevent higher energy prices from leading to inflation?
[0] https://carnegieendowment.org/china-financial-markets/2021/0...
Tariffs result in higher costs to consumers in the short term due to the additional tax consumers have to pay. This extra tax is harmful to the economy. The reduction in economic growth is deflationary and sufficient to counter inflationary pressure from higher prices on tariffed goods. As a result, tariffs should lead to deflation or have at most a neutral effect on inflation.
Did I sum that up correctly?
I'm not sure there is overall inflationary pressure from the higher prices on tariffed goods, but yes. It's a dynamic system, and I believe that people change their behavior and buying patterns in response to taxes. This is my belief, and I have no real evidence other than the fact that the rate of CPI growth did not increase after the 2018 tariffs until after the COVID stimulus came into effect.