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I know that this is insanely complex with everybody protecting their own economies, but I think this is where middle powers working together more strongly could help. Imagine that Canada, the EU, and Britain worked together as an economic NATO, where a tariff attack on one is a tariff attack on all. It would hurt the US much more to bully one of these economies.
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UK used to have that kind of protection up until a few years ago, but they decided it was not worth it.
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Canada and the EU already have a trade agreement since 2016. The UK economy is about 1/5th that of the EU, not enough to move the dial, and they kind of went off in the opposite direction around that same time...
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You'd need n^2 "NATO"'s then, because EU has implemented many really shitty policies too and someone would want to fight back against that too. UK may do the same.

And we already have an actual NATO example, where one member attacks countries around the world, one of those countries fights back, threathening to attack american bases even in europe if needed... and now other nato members might get involved in a war that was started by one of it's own members, that no one else really wanted, and side on the side of the agressor ( https://www.aa.com.tr/en/europe/nato-chief-reaffirms-allianc... ). To turn back into economics, what happens when EU declares an "economic war" against china, china retalites (by eg. banning exports of something we really need)... does canada go along and threathen it's own economy? Or do they form a new "NATO" with "everyone-else except EU"?

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There is also the factor that Canada has been propping up unsustainable dead end industries on a massive scale for years, and that this will make any pain from such a situation, deal or no deal, that much worse.

Most obviously Southern Ontario is living in a dreamland where inexplicably ICE autos remain a viable industry ad infinitum.

Some forced reality, by any means, will in the long run prove to be welcome.

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That will continue with only cars made in Canada not having Canadian tariffs. You make 100,000 cars in Canada everything above that amount is subject to tariffs.
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The last ~60 years have been a process by which the North American auto industry has been so heavily integrated that there is no such thing as a car made entirely in one country or another, especially in the Detroit–Windsor corridor.

Canada has manufacturers that the US doesn't (and won't for at least 5 years) and vice-versa.

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Autos are more obvious than the dairy industry, even though Trump claimed a couple of days ago that the reason there was an imminent deal is because Canada allegedly agreed to eliminate dairy tariffs? Trade negotiations have stalled almost certainly because Canada isn't actually willing to give up dairy tariffs.
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Besides dairy, one of the last major quota based protected industries in Canada was the taxi industry. It's interesting to compare and contrast the two. It used to be that if you could put together enough of a down payment to get a loan to pay $1M for a taxi license or for a quota allocation for 20 cows you'd be set for life, as long as you were willing to put in long hours. We had no qualms throwing the taxi drivers under the bus, but are willing to go to the mat for those dairy producers. Is it because taxi drivers were mostly brown skinned?
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Food is much more important on Maslow's hierarchy than taxis.
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Which is why Canadians wanting a protected monopoly is especially interesting. Usually when something is considered important we want everyone to have access to it, not only the handful of elites who get legal control over it all.

I suppose that explains why Canadian's won't allow the staple foods to also be supply managed, only accepting it for luxury foods (and once tobacco) that wouldn't cause a crisis if they disappeared, but on that realization we're back to dairy being more like taxis than essential calories.

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The dairy cartel is very strong in Canada (similar to the maple syrup one). They are deeply embedded in the government.

It'd be like trying to convince the US to reduce their Corn cartel. Except the corn industry keeps prices low, paid for by the American tax payer and demand mandates, and the Dairy cartel keeps prices high so consumers pay for the lack of competition.

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Plausible.

The Quebec PM did say that if the dairy industry wasn't happy they wouldn't put US alcohol badk on the shelves, which would have effectively killed the whole thing.

While a factor I doubt this is the whole story though.

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> While a factor I doubt this is the whole story though.

No story can be told in a HN comment. No story can be fully told in words.

However, having spent much of my existence around the Canadian diary industry it is clear that it has always been the biggest sticking point in US and Canada relations. Not just today, but that's been the case for my entire life.

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> you have never been able to buy American milk in canada.

That’s not really true. The US has 5% of the quota, tarrif free. Which they don’t even fully use. But, to be sure, it does get used. You absolutely can buy American milk products in Canada.

The problem is that they have to go through the processors to satisfy the processors' own quotas so by and large the meager 5% isn’t worth the operational complexity vs just buying milk locally for the processors. The US wants to be able to go directly to the grocery stores.

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Can you please stay within the site guidelines when commenting on HN? Your last several comments have been breaking them in various ways.

https://news.ycombinator.com/newsguidelines.html

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You probably wont regardless. milk itself wants to be drunk pretty quickly after being produced, and thus pretty close.

what changes is parts that arent so visible - milk powders, sugars, proteins, etc, that are inputs into ultraprocessed foods like a cheezit

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It’s a cool story but one only has to go to Statistics Canada/Agri-food Canada to see exactly how much US milk is imported into Canada. Hint: it is substantially more than none.
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Milk vs. dairy products. I'm sure there's plenty of cheese/dairy based products. But liquid milk?
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Canada imports roughly 65 million litres of fluid milk from the USA each year.
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Canada produces ~9-10 billion litres of milk a year. 65 million is less than a percent. That also doesn't mean 65 million of litres of liquid milk ends up on store shelves, that could be going into other products. It's extremely hard to find non-Canadian liquid milk on Canadian store shelves.
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> 65 million is less than a percent.

I mean, what were you expecting? Like before, they only have access to 5% of the market tarrif-free, and, in practice, cannot even use all of that due to the practicalities of 5% not being all that operationally useful to the Canadian processors. The US hasn't been bemoaning these tariffs for longer than I've been alive (and I'm quite old by HN standards) because the market is flush with their goods...

> It's extremely hard to find non-Canadian liquid milk on Canadian store shelves.

Hard is a long way from never. Yes, the volume is negligible, but known to be non-zero. Although we'd really have to understand the makeup of the milk to know how common you consuming it is. If every jug has a tiny drop of US milk in it then the chances of you encountering US milk on store shelves is actually quite high. It is highly unlikely that any jug will be 100% US milk. It is not like anyone is going to take the time to painstakingly separate it into a separate tank before bottling. Milk is milk.

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As a Canadian, I am willing to suffer if it means long term benefits.

Carney is very popular for a reason.

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No deal is better than a bad deal.
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No deal is a bad deal. Just for an indefinite term.
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Is anyone else getting that feeling about hearing the world "deal" so much that it's losing any meaning whatsoever?

What exactly does this word mean? It definitely doesn't mean a stable set of agreements that can be relied upon to ensure a stable future business environment. That's not in the cards.

What I suspect Carney is doing, and fully support as a Canadian, is running down the clock. An agreement is America isn't worth anything without leverage to back it. The main goal is to stall to delay the damage as much as possible while diversifying away our economic dependence on the US. There is no other long-term goal - everything else is just appearances and showmanship.

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I'm sure many Canadians are fine with a "bad no deal" if it means not negotiating with an unreliable partner that consistently engages in threatening Canada's national sovereignty.
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This implies that the US respects the agreements it signs
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Trump’s deals also are of indefinite terms. Ask the Saudis - their big nuclear deal fell apart within a day as Trump added new conditions out of thin air.
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You can't respect someone who doesn't respect their self. It's a mistake to attribute personality features to countries, but not to their leaders.

Similarly, people who don't have self-respect don't respect others.

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I think you're right that this will be more painful for Canada, economically, but I'm not so sure about "way more". But politically, it will be much more painful for the US side of the negotiation than for the Canadian side. The Carney administration is on much firmer political ground than the Trump administration. Time is on Carney's side.
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>The Carney administration is on much firmer political ground

I don't think so. Time really isn't on Carney's side either.

Carney's new tariffs fall on those who, in aggregate, did not vote for him. The average Carney voter has been very vocal about wanting to pursue this tactic- that's why they elected him. (That average voter is an Eastern retiree whose holdings are generally in real estate, so they don't care about any other economic sector beyond that which keeps their property values high, especially compared to the feel-good Elbows Up stuff.)

But Carney's currently having trouble just keeping the country together at this point. That's why he's approving projects he really doesn't want to approve out West, like those oil pipelines, because the West has credibly signaled that that they might just ban Carney and his Eastern voting block from making law and collecting tax from them if development of their part of the country is hindered any further. But if it's not hindered, they'll grow in political power, which is also an inherent threat to Ottawa's power (just not immediately).

And yet here Carney is- for the second time now- imposing more economic roadblocks that drive up consumer prices and put more people out of work for no reason other than his voting block wanting it that way. "Just retaliate" might be the least bad option for Carney to pander to that voting block, but every concession to them drives the country closer to separation, and that has time pressure too.

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I think you're mistaken about the effect that the Albertan premier's artificially manufactured "independence" campaign is having on the electorate.

Outside of the small fringe communities that support it, the reaction of the broader country has been to actually shift MORE into hardline stances against the US, as the effort is seen largely as an American manufactured thing.

Additionally, I'd advise to take with caution perspectives from any sources that would characterize the province of Alberta as "the west".

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>the broader country

Not really, though. Despite what even a good chunk of Canadians (or yourself) might think, the country doesn't end at Toronto.

If the government wasn't worried about the effects, they wouldn't be in any hurry to approve the infrastructure projects; they've been in the works for a very long time, stalled out. Urban Easterners claim to believe the planet will explode if they're built, and the governments they elect act accordingly, but it's really just a power thing.

Additionally, I'd advise you to not think you know better than the people that actually live here.

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This sort of rhetoric leads me to believe you've been enmeshed in the online and more um.. "engaging", rhetoric on this which no doubt paints a very compelling narrative.

The government's actions are much better explained by a sudden actual, panicked focus on actual development of the economy towards some combination of diversification and domestic demand - after the governing party's leader was replaced by arguably a much more results oriented PM after having been governed for a while by a much more vibes oriented PM.

Opening up the pipeline projects required more than just "conceding" to Alberta, it required negotiating with BC and the native tribes that would have a say in the path and ensuring they got the concessions they needed. Boring work. Not really meme material and doesn't make the headlines.

Between all the things the government has been doing - the oil sector work, the acceleration of military procurement, the various bilateral trade agreements, and work on easing internal trade restrictions, acceleration of internal projects - it's easy for some interest or another to cherry pick a particular set of events and use them to paint a narrative.

These narratives would be more compelling and maybe work better at other times, but the issue currently is that the American president is just so effective at drowning out any of these. There's nothing quite so unifying as an obnoxious tyrant rambling on about your country in disrespectful terms.

The commentary (mistakenly) assuming my nationality could probably have been left out of your response :)

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To me, it seems like you have a myopic view of the situation that is overweighting the importance of a political movement that has high salience for you, but fairly low salience for most of the electorate.
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I'm so tired of Albertan exceptionalists grabbing attention. They annoy their neighbours no end (including far too many Albertans I know).
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a loud minority in rural Alberta is not "the West"
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It's all relative. I'm sure you're right that Carney will lose some support because of this, but he'll also gain and solidify some other support. And he has lots of room to give. We haven't had leadership in the US as popular as the current Canadian leadership for over 15 years. Whereas the Trump administration's approval is so low that the only question is whether there is even any room lower to go.
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> Unfortunately, Canada (where I live) will feel way more pain from this than the US. I am not sure Trump will have respect for this at all, but the alternative was to put in a permanent trade deal that significant disadvantaged Canada.

It's unfortunate and in some ways unfair. I hope the Canadian economy will move towards more open trade partners and will proposer.

The thing that I really struggle to understand is what the grand vision behind this is. A logical consequence of the tariffs is that Canada, Europe and other American allies focus more on those who are willing to trade with them, including China.

If I put a 2/3y contract in place with an American supplier, there's a fair chance that I might have to deal with 10-50% tariffs at some point during the contract. This does make (long)-term business deals with the US risky.

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There is no grand vision. Trump has an irrational love of tariffs. He just likes them, they feel right to him. It is entirely that we have a presidential system with an executive that is capable of too much unilateral action, and we elected someone to that office who is unfit for it.
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Does the admin’s affinity for tariffs have anything to do with Lutnick? His “former” firm bought tariff credits from companies for pennies on the dollar - huge upside if you knew what was coming.
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Trumps been talking about tariffs since the 80's https://www.youtube.com/watch?v=iEDVdSclDqg
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I'd say that's more effect than cause.
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I do think that Trump is irrationally attached to protectionism, but I also think that tariffs have at least 2 concrete benefits for him: 1) as a tool of economic coercion to achieve geopolitical ends, and 2) as a form of corruption to solicit de facto bribes in exchange for exemptions.
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When you are forbidden to expand taxation on the people with money, because "ideology" and your country is accruing debt at historic levels, tariffs are about the only revenue source that you have that won't make the oligarchs angry.
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I don't think this has anything to do with revenue or the national debt. They don't seem to care about that at all.
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Trump is one of oligarchs.
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  > The thing that I really struggle to understand is what the grand vision behind this is.
Religious zealots and the new barons want to go back to the Gilded age. If that means the house needs to burn down first, the house will burn down first. In the mean time, there is lots to gain from crises.

This is something so far removed from the way normal, constructive way people (have to) think and behave with each other as a prereq to participate in society that they will inevitably fail to see this parasitical dynamic, because there is no way they can relate to that from their own frames. Even when we learn about this we will instinctively dismiss it. It doesn't fit our frame of reference, so we decide this can't be true.

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Perhaps, but Canada will emerge stronger. The US doing to flip Congress by a margin of 2 and just lock in Trump insanity until something really bad pops.
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