Tariffs - What do they mean?

Tariffs

A tariff is paid by the importer. The amount paid to CRA is the amount legislated by the federal government. The amount that continues to be discussed is 25%. In Canada, the federal government controls tariffs and trade policies, as outlined in the Constitution. Provincial governments don't have the authority to unilaterally impose tariffs on goods coming into or going out of their provinces.

The mechanics are that a company in Canada would order products from a company in the USA. If the product cost is $100.00, the Canadian company would have to add 25% to the product cost and REMIT 25% or $25.00 to CRA. 

The problems are evident:

1. Product costs would increase and be passed on to every wholesaler, retailer and eventual consumer. The HST paid by the consumer would increase by $3.35 for every $100.00, provided the importer has sold directly to the retailer and no additional middlemen exist, otherwise the HST the consumer pays would increase. 
2. Until the tariff laden product is sold the importer's cash supply would be impacted. The importer would have paid $100.00 to the seller in the USA and $25.00 to CRA. If the product remains in inventory the importer will require more cash or working capital to carry on business. This may impact credit terms for a potential customer.
3. This cash crunch could limit inventory levels, and with potential higher demand for the product, inflation would rear its ugly head. Retailers would be impacted if supply were to be restricted. This would likely cause lay-offs.
4. Ultimately this will impact the consumer and disposable income. With prices of everything going up this would be the nail in the coffin.
5. As previously mentioned, tariffs would impact the Canadian dollar and the central bank rate. The dollar would continue to plummet, and the central bank would have to increase the interest rate to save a plunging dollar. This would add to the cost of almost everything, especially housing and automobiles.

If the IRS adds tariffs to Canada's exported goods the impact may not be as dramatic for the U.S. importer, or American consumer:

1. Adding 25% to a 68 cent dollar only means the imported cost of the product would be 85 cents. Americans are used to paying this amount for Canadian goods.
2. If we stop exporting, production will be lessened, and corporate revenue would take a nose dive. 
3. CRA and provincial governments would see a reduction in income tax revenues - the reduction in income taxes would exceed tariff revenue. We would need tariffs to support Canada's income tax quandary. 
4. Unless Canada finds alternate customers for its products abroad Canada's GDP and jobs would be impacted. Canada's corporate and banking sectors would be severely hampered by the tariffs.
5. Because the U.S. would be collecting more in tariffs, (i.e. from global exporters worldwide)  it could subsidize the cost of imported goods in the short term - until it found alternate suppliers or it rebuilds its manufacturing base. Example - Greenland has already stated that it is prepared to negotiate mining and rare earth resource exploration with the USA. These are key export commodities for Canada.
6. The USA is in a favourable position because Canada is being held hostage by a Marxist dictator disguised as a prime minister. Trudeau has no influence on Trump, because Trump hates him. This bodes horribly for Canada. A delayed Federal election would work right into the hands of the WEF agenda. The destruction of Canada.
7. The hidden horror is that Canadians do not know how the tariff revenue would be managed and/or allocated by CRA. We know Trump will use it to reduce the U.S. national debt. 

The scenarios above could continue, but I believe you get the picture. Canada cannot win the tariff war, no matter what our politicians say. Trump declared an economic war and he may invoke it on February 1, 2025 or April 1, 2025, or never if we are smart.

The irony is that Canada has no clue how to prevent the tariffs because Canadians do not know what Trump wants to stop them from being added to imported goods. Rather than use diplomacy our politicians continue to threaten Trump. Bad move. Is Trump strictly about borders, immigration, NATO and drugs, or is there another agenda. If Trump wants an economic union, he will eventually get it because Canada's economy will falter. 75% of our trade is with the USA.

An Episcopal Bishop said some unfavourable things abouts Trumps' immigration policy. She is paying dearly for those comments and Trump has demanded an apology.

You gotta talk to Trump, not attack him. Please remember that our common bond is that both our countries were settled by and built by predominantly Caucasian Christian Europeans. We are conjoined on one land mass as well. I believe this means something to Trump, even if everyone else thinks it does not. The scary part is that Trump has an affinity for Israel and Satanic Zionists.

Thank you,

Joseph Pede