Apparently, in addition to halting trade negotiations with Canada, an additional 10% tariff is to be applied to imports from Canada. It’s unclear which imports will be tariffed (i.e., will USMCA-covered goods be affected?).
Figure 1: EPU-trade from Baker, Bloom and Davis (blue, left scale), and Trade Policy Uncertainty from Caldara et al. (red, right scale). Source: policyuncertainty.com and Iacoviello.com.
To me, it will be interesting to see (1) how much measured policy uncertainty rises, and (2) whether anybody believes in the durability of Trump’s latest trade threat.
Trump: “They cheated on a commercial. Ronald Reagan loved tariffs and they said he didn’t. And I guess it was AI or something. They cheated badly. Canada got caught cheating on a commercial. Can you believe it?”
You know, folks can see and hear the complete speech with their own eyes and ears. Will they deny what they see with their own eyes in fealty to the Dear Leader? It’s just astonishing the extent to which followers will accept the Big Lie.
Do you think Trump really believes it was AI? Is he so senile that he believes everything his handlers tell him? Or is he just a bald faced liar? Or maybe all three.
By the way, the youtube of the speech was posted on the internet decades before the invention of AI. And its not just that speech. Reagan expressed similar sentiments about tariffs in many other recorded speeches.
I wonder which tariff law exemption allows the President to impose a tariff because he is embarrassed by a TV commercial that demonstrates that he is a fool. Trump’s own National Insecurity?