I notice that Bloomberg news is starting to switch from Trump is pro-business to whispers of a recession. Of course, the take there seems to be oh well some people will lose their jobs but the Fed can then lower interest rates. BTW, can the mainstream media stop saying Republicans are good for the economy?
Also – something nobody talks about – what happens to local economies when public benefits are cut? Does the local Dollar General store go out of business and we start getting our consumer goods from the Salvation Army Family Store?
Also didn’t Trump and the GOP promise that they would lower my Piggly Wiggle bill and my gas bill? Didn’t the Treasury Sec promise to increase oil production by 3%? I guess he didn’t realize that most of the energy/fossil fuels in the upper Midwest comes from Canada?
H Brown
These numbers are a bit baffling. Canada’s GDP is ~C$3 trillion and exports of goods are ~C$800 billion, of which more than 70% go to the US. If exports fell by 25% in response to Trump’s tariffs, which seems modest to me, GDP would take a direct hit of C$140 billion or ~4.5% before any second round effects. McKibbon’s estimate of ~2.25% in 2027 seems impossibly modest.
H Brown: You’re working with unit elasticity with respect to price in USD. If tariff pass through is incomplete — perhaps because the CAD depreciates — one could imagine less than a 4.5% hit.
Bank of Canada has an interesting calibrated simulation, with similar numbers. https://www.bankofcanada.ca/publications/mpr/mpr-2025-01-29/in-focus-1/
I notice that Bloomberg news is starting to switch from Trump is pro-business to whispers of a recession. Of course, the take there seems to be oh well some people will lose their jobs but the Fed can then lower interest rates. BTW, can the mainstream media stop saying Republicans are good for the economy?
Also – something nobody talks about – what happens to local economies when public benefits are cut? Does the local Dollar General store go out of business and we start getting our consumer goods from the Salvation Army Family Store?
Also didn’t Trump and the GOP promise that they would lower my Piggly Wiggle bill and my gas bill? Didn’t the Treasury Sec promise to increase oil production by 3%? I guess he didn’t realize that most of the energy/fossil fuels in the upper Midwest comes from Canada?
These numbers are a bit baffling. Canada’s GDP is ~C$3 trillion and exports of goods are ~C$800 billion, of which more than 70% go to the US. If exports fell by 25% in response to Trump’s tariffs, which seems modest to me, GDP would take a direct hit of C$140 billion or ~4.5% before any second round effects. McKibbon’s estimate of ~2.25% in 2027 seems impossibly modest.
H Brown: You’re working with unit elasticity with respect to price in USD. If tariff pass through is incomplete — perhaps because the CAD depreciates — one could imagine less than a 4.5% hit.
Bank of Canada has an interesting calibrated simulation, with similar numbers.
https://www.bankofcanada.ca/publications/mpr/mpr-2025-01-29/in-focus-1/