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Written by Ray Jepson on 2025-01-17 at 14:32

Hey #economics on Mastadon. What would you project would happen if #Canada didn't put retaliatory #tariffs on the #USA? We know that they won't change #Trump 's mind, so it seems like they will just increase prices for Canadians.

What does the profession think?

[#]canpol #uspol #economy

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Written by BerlinFokus on 2025-01-17 at 14:39

@mister914

One sided #tariffs put a trading partner in a disadvantage, which in the long run would hurt the economy more than a short term #inflation because of penalty tariffs.

The concept isn't to "change Trumps mind" but to encourage ones own people & businessnes to seek alternatives to US products.

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Written by Ray Jepson on 2025-01-17 at 15:43

@berlinfokus what about tariffs on citrus? That doesn't grow in Canada, although I guess they could be substituted with other fruit.

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Written by BerlinFokus on 2025-01-17 at 15:52

@mister914

Historically in a #TradeWar the "partners" try to go escalating steps, that are somewhat face saving for the other side. At least at the beginning.

So they won't probably start with something that is really hurting the "enemy" economy, but rather with something symbolic to show "we're ready & willing to act - negotiate now!".

But things can escalate, and with Trump in office pretty fast I guess.

So I'd say everything is on the table & things could get very messy.

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