The same people who just spent four years telling us that inflation was a fairy tale are now terribly concerned that President Donald Trump’s tariff wars will cause inflation. It’s funny to watch.
On Saturday, America’s greatest president ever threatened 25% tariffs on all Mexican and Canadian imports unless they get their act together on securing our borders. The sky was suddenly falling. The prices of maple syrup and avocados were going to skyrocket! But within 48 hours, the trade war and the pending inflation were all over. What happened?
According to all the Smart News People™, the American people were about to SUFFER irrevocably because of Trump’s reckless actions against our precious trade partners.
The wily Canadians even floated a plan to impose stiff tariffs on things that people in red states like to export to them. Prime Minister Justin Trudeau encouraged Canadians to stop drinking orange juice from Florida. Take that, Trumpers!
One thing that the shortest trade war ever revealed was the Canadians and Americans are not as friendly with each other as we previously believed—especially on Twitter (now X). Rude things were said about the Stanley Cup. Insults were hurled in both directions. It escalated quickly.
I’ve literally never seen a Canadian woman who was attractive.
— Jarvis (@jarvis_best) February 3, 2025
By Monday, Canada’s blackface-wearing Prime Minister Justin Trudeau had completely capitulated to President Trump’s demands. Canada will spend $1.3 billion to deploy new helicopters and technology to secure the border with the US. An additional 10,000 personnel will be hired and stationed for border security.
They’ve also agreed to appoint a fentanyl czar and the Canadian government will designate the drug cartels as terrorist groups.
Mexican President Claudia Sheinbaum was all bluster at first, too. She promised a robust response and Mexico was going to crush us and blah blah blah. She also caved on Monday.
Mexico is now sending 10,000 troops to the border to intercept fentanyl and illegal aliens. They arrested a minor cartel boss first thing on Monday in Nuevo Laredo.
As a show of good faith, President Trump has paused the tariffs on Canada and Mexico for 30 days. Both foreign leaders talked a tough game initially and then completely submitted to President Trump’s demands. It was a total surrender and they’re going to go even further in helping to secure the border before this is over.
We’re not going to face crippling inflation, even if a full-fledged trade war does ignite. Anyone who has taken an Econ 101 class could explain this. Unfortunately, very few people in Congress or the mainstream media have ever taken Econ 101, so we get subject to a lot of the-sky-is-falling hyperbole.
Mexico, Canada, China, and all these other countries have a parasitical trade relationship with America. They’re the parasites, we’re the host.
Canada, for example, exports a lot of timber and other goods to the US. But they don’t reciprocate that relationship. They viciously protect Canadian industries and businesses by restricting what we can even export to them. This is known as “free” trade, in which foreign countries walk all over us.
We have a trade surplus of about $85 billion with Canada. That represents about 2.8% of Canada’s GDP, but -0.2% of our GDP.
Mexico has a $171 billion trade surplus with us. That represents nearly 10% of their GDP, but only -0.8% of US GDP.
Same thing with China. They have a $1 trillion trade surplus with America. That’s 5.4% of their GDP and -4.4% of ours.
If we impose tariffs on those countries, it will crush their economies while enriching ours. The “free” trade agreements that previous American presidents have set up always put American companies at a disadvantage. Foreign competitors take sales directly away from American businesses, while they don’t allow us to export comparable amounts to them.
The first thing that a country always does in this lop-sided situation if tariffs are imposed against them is devalue their own currency. This makes their people poorer and makes Americans richer. The proposed tariffs against Mexico, Canada, and China would result in a direct increase of 5.4% to America’s GDP, to the tune of more than $1.2 trillion. The economies of Mexico, Canada, and China would shrink by nearly 6% as a result.
Don’t listen to the hyperventilating from people who don’t even have a high school-level understanding of economics. President Trump’s trade advisors, led by Peter Navarro, know exactly what they’re doing.
We hope you’re not tired of all this winning yet because there’s going to be a lot more of this!