And now, tariffs

This has not been our finest hour, but it still could be.

After weeks of uncertainty, Donald Trump will make good on his tariff threat on Saturday, February 1.

It turned out we couldn’t fix his problems, because they were imaginary. The money he gets from import duties, however, was not.

A 25% tariff on goods coming from Canada or Mexico, and 10% on goods coming from China. There are some caveats, of course – as there always are when dealing with Trump.

First, oil will be hit at a lower rate (10%). Second, that rate will not take effect until February 18. Third, as I write this, we do not yet know the response – from our governments or from Americans who are only now starting to realize that this might affect the cost and ways that business is done in America.

No matter how generous your curve, the Canadian response up to this moment hasn’t been great – most clearly illustrated by a leadership vacuum caused by a prime minister who overstayed his welcome and has no moral authority, and a premier who has set aside her usual obsession with governments staying in their lane to create new foreign policy for Alberta. Another premier has decided this is a great time for an election.

But there’s nothing so clarifying as a crisis. So here’s hoping our politicians get on the same page, get serious and get down to the business of moving us through the short term and long term challenges these tariffs present.

As this becomes real, new considerations arise.

First – we need to react to the situation as it unfolds, not as we planned or hoped. Donald Trump has shown his hand by saying oil should only have a 10% tariff. I absolutely guarantee he’ll begin exempting other things (certain pharmaceuticals, etc.) when the consequences become felt. When he does such things, he’s telling us what his pain points are. We’ll see what the federal government does with that information.

Second – we need confidence that internal debate about what Canadians are doing is free from both foreign interference and the appearance of foreign interference. It’s probably not great that most of our daily newspapers are owned by an American hedge fund.

Maybe we can even take a page out of somebody else’s finest hour and create a media “lend-lease” plan. Nationalize Postmedia and immediately distribute ownership evenly to each of its Canadian-based employees. Put a lien on each of those shares for the cost of the nationalization, to be repaid upon sale or transfer of the share. If anybody working there doesn’t want their share, that’s fine. Just reduce the number of ownership shares by one, reallocate accordingly.

Third – we’re going to have to give the federal government at least a bit of the benefit of the doubt. There is no shortage of ideas as to how to approach Trump’s tariffs. Part of me would love to see the federal government introduce incredibly punitive countervailing tariffs. The other part feels this would just add needless self-destruction to the pile of destruction. Neither of those parts has access to the resources of the Government of Canada – the detail, the intel, the modelling, the other conversations that might be happening with global allies.

There is a huge information disparity that exists between being inside the government and outside the government. This does not mean government is always right – far from it, governments can become paralyzed by how much they know. But good strategy comes from good analysis and nobody has access to better analysis right now than our federal officials. Let’s give them a shot.

Fourth, and most importantly – we need to stick together. Families fight and families hold grudges. But when they’re attacked from the outside, they stick together. If you love this country, now’s the time to act like it. Put the grievance politics aside. Burn the ledgers where you calculate who’s paying the most and getting the least. None of us are getting through this without a bit of sacrifice. Some of us will have to sacrifice more.

It's okay to disagree about what’s best to do. Right-brain Canadian pride and left-brain Canadian education in finance can whipsaw us all back-and-forth on the appropriate response. You can have the same goals and different perspectives.

Hopefully our leaders keep that in mind too, as we move through the next few weeks and months, and lower the internal temperature as the external one rises.

Good luck, everybody.