Depends on "how" Canada stops surrendering since Trump would go off the rails on even little things. In other words, if Canada is going to fight back, they should go big and make the US feel it. Trump hates Canada for some reason (my own opinion is he is still pissed at Trudeau for laughing about him with some EU leaders back in Trump 1.0 on a hot mic. He is that petty and insecure.)
Canada is the #1 export nation for the US (ex-EU as a bloc...need updated data..shutdown) with the highest value-added US export product mix. So a trade war would hurt both the US and Canada. The fertilizer and potash supply and other resources is critical for US ag and the same for low-cost heavy crude for refiners at steep differentials to WTI. Canada would get punished, but the US would get hurt also. It comes down to tariffs on US ag and the CAD export plan on key natural resources. That would be the breaker for US ag!
The Canadian provincial dysfunction makes it tough to handicap. Market would hate it (equities and HY spreads), but the market questions Canada's resolve. It could not be small or the market would ignore. It is a recipe for stagflation if it is a real fight. We have broken out the export-import mix in earlier research on the site (use search function)
Couldn't agree more. What if Canada stops surrendering?
Depends on "how" Canada stops surrendering since Trump would go off the rails on even little things. In other words, if Canada is going to fight back, they should go big and make the US feel it. Trump hates Canada for some reason (my own opinion is he is still pissed at Trudeau for laughing about him with some EU leaders back in Trump 1.0 on a hot mic. He is that petty and insecure.)
Canada is the #1 export nation for the US (ex-EU as a bloc...need updated data..shutdown) with the highest value-added US export product mix. So a trade war would hurt both the US and Canada. The fertilizer and potash supply and other resources is critical for US ag and the same for low-cost heavy crude for refiners at steep differentials to WTI. Canada would get punished, but the US would get hurt also. It comes down to tariffs on US ag and the CAD export plan on key natural resources. That would be the breaker for US ag!
The Canadian provincial dysfunction makes it tough to handicap. Market would hate it (equities and HY spreads), but the market questions Canada's resolve. It could not be small or the market would ignore. It is a recipe for stagflation if it is a real fight. We have broken out the export-import mix in earlier research on the site (use search function)