The Canadian Boycott is About More than Economics | The Professor Is In
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What recent updates have occurred in the US‑Canada trade war?
What's that called? Twinkle? Uh jazz hands. Jazz hands. Wow, we just got to do jazz hands on an economics podcast.
Hi Justin. You released a video recently about Canada's retaliation against President Trump's tariffs. You talked about the whole US Canadian trade war, including the nineteen sixty-five Auto Pact, NAFTA, the fentanyl tariffs, and then the surprise 50% tariffs on hundreds of Canadian goods. And ultimately, you concluded that although this is a small hit economically for Canada right now, this is extremely important because of what it means for the American Canadian. Canadian relationship in the long term. Today I have several follow-up questions about this trade war that come from our audience. Hi, I'm Augusta. I'm a producer here at Plotypus.
I'm Justin Wolfers. Uh this is the Professor is in think of this as office hours, where Augusta walks into my office with your questions. Uh hit me with it, Augusta.
How did the “infinity percent” tariff on Canadian goods come about?
Okay, so first I just want to ask for an update. What has happened since you filmed that video?
I have a feeling I can't remember if I did, I have a feeling in that video I might have called this the dumbest thing that ever happened. Um and if I didn't I should have. Sorry for beating around the bush. Um well I woke up this morning with a headache. It got dumber. So The Canadians were lightly measured. They said they'd do dollar for dollar retaliation against the American uh tariffs And their um tariffs were twenty billion dollars to match the American twenty billion dollars. They were somewhat carefully crafted to minimize the pain on Canadian consumers, so they tariffed things where Canadians could buy Canadian made goods or else goods from Europe or Asia instead. But it was fairly measured. And so of course the president the next day has responded with his retaliation to the Canadian retaliation
From the American retaliation on the Canadian retaliation to the president's tariffs. Hey, here's a weird thing. I just want to remind you about this. You know what hasn't changed? The governing law in both countries is a free trade agreement. Right. If you're American, you call it the USMCA. If you're Canadian, you call it Kuzma, because for you, Canada always comes first. Right. Um, but what we now have is I think we got f something like five presidential proclamations yesterday. One thing I want you to notice there, Congress wasn't involved. I also want you to notice that the Constitution gives the power over tariff. tariffs to Congress, which means it's not totally clear whether any of this will end up um standing up to to scrutiny.
The president has told the general services administration, they're basically the folks who stock the stationary cabinet throughout the federal government. They said stop buying stuff from Canada. Just to be clear what that means for America is for taxpayers, it means that what they're going to do is if Canadians were the cheapest source, they're going to go from the cheapest source of stationery. And remember, wood and paper products are a big thing coming out of Canada because they've got all those trees. Uh they're going to buy the expensive one instead. Um, with my tax dollars. Uh the number of goods that got the fifty percent tariff has gone up and it's been rearranged.
Why does an import ban punish American buyers more than Canadian producers?
I haven't yet had time to run all the numbers on that about how big that will be. And then just in case you're worried, and I know you were worried about this Augusta, you know, you said to me, Oh goodness gracious, a fifty percent tariff, do you think that's big enough? Could we do something sillier? What number's bigger than fifty, Augusta? fifty one? Big uh be be ambitious. Fifty two. Come on, be the present, be audacious in your dreams.
Sixty?
Infinity. We now have infinity percent tariffs on Canadian alcoholic beverages, dairy products and motor vehicle products. Um, I love this. This is the president daring to dream. You might, I mean, you showed a distinct lack of ambition when you're like, oh, 60 would be good. We only got up to 145% tariffs with the Chinese. But if there's one thing I know about this administration, we hate the Canadians.
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Chapters
8 chapters
1
What recent updates have occurred in the US‑Canada trade war?
0:00–1:00
2
How did the “infinity percent” tariff on Canadian goods come about?
1:00–3:16
3
Why does an import ban punish American buyers more than Canadian producers?
3:16–4:14
4
Do consumer boycotts by Canadians actually affect US businesses?
4:14–4:55
5
What is the hidden economic cost of the political “clowning around”?
4:55–8:26
6
How large is the overall hit to the US economy from these tariffs and boycotts?
8:26–10:37
7
Should Canada diversify its trade away from the United States?
10:37–11:39
8
What long‑term implications does this trade conflict have for North‑American sovereignty?
11:39–19:55
Speakers
1 identifiedMore from Platypus Economics with Justin Wolfers
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