Told you so!
Donald Trump doesn’t give two hoots about the true agenda that might actually make America freer and more prosperous again. We are referring to the principles of—-
- peaceful commerce with every nation, entangling alliances with none.
- minimalist, solvent, constitutional government at home.
- sound money and market-driven interest rates and asset prices.
- maximum scope for personal liberty and free markets.
- decentralized, Federalist arrangements for any necessary functions of the state.
Now, if there is one politicians in all of the Washington Swamp besides Senator Rand Paul who stands four-square for these essential principles, it is Congressman Thomas Massie, also of Kentucky. In fact, Tom Massie is so steadfast, learned and consistent on these matters as to be the very living embodiment of libertarian principles on the great stage of national politics.
And yet, and yet. In the face of what is a hugely debatable issue with respect to the latest continuing resolution (CR) tabled by Speaker Johnson, which is another total capitulation to Washington spending as usual, the Donald has now unleashed a vicious, bully-boy attack on Rep. Massie.
But for crying out loud, Donald, Congressman Massie has actually read every line of this 110 page abomination and knows that it provides spending authority of $1.658 trillion, which is 47% more than Big Spender Obama’s last budget. It will virtually cancel every dime DOGE has allegedly saved.
And, besides, enough with the clownish ALL CAPS sloganeering already. Instead, how about you give Rep. Massie the apology he deserves.
Thank you to the House Freedom Caucus for just delivering a big blow to the Radical Left Democrats and their desire to raise Taxes and SHUT OUR COUNTRY DOWN! They hate America and all it stands for. That’s why they allowed MILLIONS of Criminals to invade our Nation. Sometimes it takes great courage to do the right thing. Congressman Thomas Massie, of beautiful Kentucky, is an automatic “NO” vote on just about everything, despite the fact that he has always voted for Continuing Resolutions in the past. HE SHOULD BE PRIMARIED, and I will lead the charge against him. He’s just another GRANDSTANDER, who’s too much trouble, and not worth the fight. He reminds me of Liz Chaney before her historic, record breaking fall (loss!). The people of Kentucky won’t stand for it, just watch. DO I HAVE ANY TAKERS??? Anyway, thank you again to the House Freedom Caucus for your very important vote. We need to buy some time in order to MAKE AMERICA GREAT AGAIN, GREATER THAN EVER BEFORE. Unite and Win!!!
Based on the above rant, however, we are not sure what they put in the Donald’s orange juice this morning because it appears he was just getting cranked up when he took off after Rep. Massie. Since then he’s come out swinging against Canada, and ordered his Secy of Commerce to raise the tariff on steel and aluminum to 50% in response to a threat from the equally loud-mouthed premier of Ontario that Canada might tax electricity exports to the US.
Needless to say, the social media rant below conveying this intention was surely posted by the Donald himself. It is full of the ALL CAPS hyperbole, factual exaggerations and outright nonsense that are the trademark evidence of unfiltered conveyance straight from the Donald’s brain to the worldwide web.
The one good thing you can say here is that there is no staff intermediation, scripting or spinning in the bluster, blather and bile posted below. Indeed, after four long years of anonymous staff ventriloquists talking through Teleprompter Joe, it’s actually refreshing to know that what you get from the Donald is pure Trump-thought.
Unfortunately, what we also have is a classic case of Forrest Gump’s box of chocolates:
You never know what you are going to get!
And not just the good stuff like his order to stop the insanity in Ukraine or wondering out loud whether he could convene a summit with Putin and Xi aimed at a global agreement to cut defense spending by 50%. Or knocking the DEI, woke and Climate Change Scam out of the park like he did in his SOTU speech to Congress and the American people. That’s all marvelous!
Still, today’s social media eruption should be an off-setting cause for concern because it shows that on the large matter of global trade and the strategy for returning America to capitalist prosperity, the Donald is just as off-base, uninformed and ill-tempered, as he was this morning regarding Rep. Massie’s principled stand to vote “nay” on the CR.
Moreover, we are not just referring to the utter nonsense in the second column below about Canada as the 51st state. By now the Canucks are not remotely interested in the proposition, of course, but, more importantly, if Trump were even a lukewarm conservative, to say nothing of being semi-sane, he’d recognize that annexing Canada is not even a joke.
To the contrary, it’s an absolutely awful idea because the United States, like the EC, is already way too big to be governed honestly and effectively. That is to say, anyone truly worried about constitutional liberty and capitalist prosperity today would be advocating for defunding, dismantling and devolution of the Leviathan on the Potomac, not vastly expanding the territory from which it can suck revenues and resources.
Moreover, annexation of Canada aside, the Donald’s madcap posting today shows that he is hopelessly ill-informed factually and also analytically out to lunch on the matter of global trade. In that arena, in fact, the very last thing he ought to be attacking—even as a wanna be protectionist—-is Canada.
After all, Canada was a party to the NAFTA free trade area, and now, by virtue of the Donald’s bigger and better USMCA arrangement after his phony redo of NAFTA in 2020, is even more blameless when it comes to the “unfair” trade file.
As we will show below, Canada actually has a lower tariff barrier to trade than the United States and most certainly is not remotely “ONE OF THE HIGHEST TARIFFING NATIONS IN THE WORLD”.
Consider his point above about Canada’s anti-farmer tariffs, which he claims rise to 250% to 390% of various US dairy products.
Well, no, in 2024 Canada did not collect one single Canadian dollar or US dollar or even plug nickel of tariff revenue from US dairy exporters of the four leading dairy export products—fluid milk, butter, cheese and skim milk powder. That’s right, the tariff on US dairy exports of these four products was zero, nichts, nada and nothing, respectively.
And the reason for that lies in the so-called TRQs (tariff rate quota) that the Donald himself negotiated with the Canadians in the course of attaining his ballyhooed USMCA deal in 2020.
These TRQ arrangements, of course, are Rube Goldberg devices of the kind that anti-free market government bureaucrats love to tinker with, and the Donald’s were no exception. So what they negotiated was a “tariff free” amount of US dairy exports up to a specified quota level, after which the huge Canadian dairy tariffs the Donald referenced in his rant would become effective.
These TRQs, in turn, were to be phased in over six year—so as of 2024 we were almost there. Yet on the four leading dairy products listed in the table below, US exports did not reach the quota level in any of them. Therefore, no tariff was applied to nearly 71 million pounds of US dairy exports to Canada, meaning that the Donald was ranting this morning about a problem he had already fixed!
For instance, consider the largest category, which is fluid milk right off the cows’ teats: The Trump quota was 91.9 million pounds but US exports in 2024 amounted to only 34.7 million pounds or 37.7% of the allowable amount that can come in tariff-free. And in the case of cheese, the ratio was much closer at 95.6%, but still no tariff cigar; and so on for butter and skim milk powder, as well.
In all, the Donald’s own quota amounted to 136.9 pounds in 2024, but US exports only reached 70.5 million pounds or half of the quota on these four products. So the remaining headroom under the quota for Wisconsin or New York state dairy farmer supporters, as the case may be, is considerable.
And yet, this isn’t even the half of it. As it happens, the average value of these US dairy exports in 2024 ranged between $0.50 per pound for fluid milk, to $1.20/lbs for SMP, $2.00/lbs for cheese and $2.50/lbs. for butter. The long and short of the math, therefore, is that America’s tariff-free dairy exports to Canada in these four categories amounted to $83.7 million in 2024, which, in the scheme of things, is not even a fly on old Bessy’s ass.
As it happens, during 2024 total US goods exports to Canada totaled $349 billion and goods imports from Canada were $413 billion, leaving a merchandise trade deficit of $63 billion. So the dairy piece of the picture is a mere pimple. The export figure for the four products analyzed above amounted to just 0.02% of total US exports to Canada.
Moreover, on the services side of the trade ledger it was the opposite. US exports of $90 billion exceeded services imports of $65 billion, thereby generating a surplus on services of +$25 billion. So the net deficit on the goods and services account of stuff flowing north and south across the border was a tiny $38 billion.
In other words, even if you think the trade surplus or deficit with any single country is the end all and be all of policy, which it surely isn’t, the US does not remotely have a “trade problem” with Canada. The actual shortfall or cash difference to the US amounted to just 2.7% of two-way trade in goods and services and just 0.1% of GDP.
Stated differently, total trade turnover in goods and services with Canada in 2024 amounted to $917 billion. That figure captures a huge flow of business activity north and south across the 5,525 mile border with Canada—the longest border in the world. And yet we have the Donald ranting about phantom dairy tariffs on a tiny $84 million chunk of dairy exports to Canada, which amounts to 0.01% of America’s trade flows with Canada.
And, yes, even when you add in branded dairy-based manufactures like yogurt, ice cream and whey products, which also have not been constrained by TRQs, total dairy related US exports to Canada of about $1.1 billion are still a tiny fraction of 1% of the aggregate trade turnover with America’s partner to the north.
Finally, the Donald’s bombast today about Canada was rooted in his huge misconception that unfair tariffs and other trade barriers abroad are the reason why we have massive trade deficits and have seen huge parts of America’s industrial base 0ff-shored along with the good jobs and middle class incomes which went with it.
So as highlighted in the Donald’s rant above, we have the familiar Trumpian claim that Canada is “ONE OF THE HIGHEST TARIFFING NATIONS IN THE WORLD”.
Well, no, here are ten major categories of imports into Canada in 2023 and the applicable tariff rate on each category. Together they comprise Canada’s $559 billion of imports from all worldwide partners.
As is evident from the second column total at the bottom, Canada is the very opposite of a big time tariff collector. In fact, the average tariff on all products in 2023 was, well, 0.8%.
Indeed, the above not only proves that the Donald is out to lunch on the matter, but also that he probably shouldn’t by throwing stones from a glass house. As we will amplify more fully later this week, the weighted average effective tariff on imports into the USA is considerably higher at 2.0%.
So were the Donald to actually impose some kind of reciprocal tariff, the 2.00% tariff average for the USA less the 0.80% average for Canada would generate a receipt of – 1.20%. That is, to equalize the two countries’ import duties, the Donald would owe Canada about $5 billion per year in tariff equalization rebates!
In short, the last three things that Donald Trump should be attacking are Congressman Massie, Canada’s trade policies and the dairy TRQs of the USMCA.
In the lingo of sports, the first two of these amount to “unforced errors” and the latter consists of scoring an “own goal”, if there ever was one.
Reprinted with permission from David Stockton’s Contra Corner.
