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It’s important to understand that the 25% tariffs announced by President Trump today are NOT imposed on Canada — they will be paid by American consumers and businesses who buy goods imported from Canada. Tariffs are a tax, and Americans who will have to pay more or go without our products will be the first to suffer. Of course, Canadian exporters of these goods will as a consequence lose clients, contracts and sales, and will be forced to cut down on production and lay off workers. Or they will lower their prices to keep market shares and will see their profits diminish. Because 75% of our exports go south of the border, our economy will for sure be very negatively impacted by this. The stupidest thing our government can do however to deal with this crisis is to impose the same kind of tariffs “dollar for dollar” against US imports. The US economy is ten times bigger than ours, much less reliant on trade than ours, and much less dependent on our market than we are on theirs. Not only would retaliatory tariffs have much less impact on American exporters, they would immediately impoverish Canadian consumers forced to pay more for imported goods, as well as destabilize Canadian businesses that need inputs from the US in their production processes. It would more than double the harm of the US tariffs to our economy. Trade wars are bad for everyone, but they are much worse for a small country with fewer options. We simply cannot win a trade war with the US. It’s very unlikely that Trump will back down. All we will do is provoke a massive economic crisis in Canada, until we are forced to capitulate. Another self-destructive thing to do would be to set up giant “pandemic-level” bailout plans to support everyone affected by this trade war. This will simply bankrupt our governments even more than they already are and make us even weaker. So what should we do? 1. Double down on efforts to control our border, crack down on fentanyl dealers, deport all illegals, and impose a complete moratorium on immigration, to answer Trump’s immediate concerns about Canada. 2. Tell the US administration that we are ready to renegotiate North American free trade and put dairy supply management and other contentious issues on the table. 3. Wait and see to what extent Trump is willing to keep tariffs in place despite the harm it does to the US economy. Despite his pretenses that Americans don’t need our stuff, the reality is that on the contrary they have few other options for crucial resources like oil, lumber, uranium and other minerals, etc. He will stop acting like a bully when he sees that he can get more results by sitting down and negotiating. 3. To reduce our dependence on the US market, immediately implement an ambitious plan to tear down interprovincial trade barriers and help our impacted exporting industries find alternative markets in other countries. 4. Immediately implement a series of bold reforms to make our economy more productive, including: reduce corporate and personal taxes, abolish the capital gains tax, abolish all corporate subsidies, get rid of excessive regulation, remove impediments to the exploitation and export of natural resources, drastically cut government spending, mandate the Bank of Canada to stop printing money and start accumulating a gold reserve to prepare for the global monetary reset (which is likely part of Trump’s plan). In short, instead of adopting a suicidal strategy to confront Trump, we must do what we should have done a long time ago to strengthen our economy and our bargaining position. The transition will be rough, but not as much as complete bankruptcy and disintegration.