25% tariffs on Canadian and Mexican imports.

[Blake Hampton]

7 minutes ago, james22 said:

Do they protect our borders like an ally?

 

Do they contribute to our mutual defense equally like an ally?

 

Only 43 pounds of Fentanyl were caught at the northern border in all of 2024. 

 

43. Pounds.

 

Some of you have no idea what you're talking about.

 

[Viking]

22 minutes ago, Spekulatius said:

Companies like Linamar will be hit hard. The auto supply business has <10% EBIt margins, so they can’t rats the price. The customer will have to pay more or not get parts. How quickly can you get an alternative supplier in the US to deliver a few million of those after an RFQ?

 

I am not in auto but lead times for all sorts of things have just mushroomed since about the pandemic and never went back. Some stuff that had 6 week lead times are now 26 weeks. There is no spare capacity sitting around anywhere. Will be interesting to see. In the short terms (<6month) I think customer have to eat the cost increase, I think.

 

 

Linamar is on my watch list (should the stock sell off significantly from here). 
 

Here is what Linamar’s CEO had to say about tariffs. Yes, her view is likely biased. But it is likely directionally accurate. 

It really is crazy town… a giant game of chicken. The tail risks are widening.

 

Tariffs will halt North American auto production and trigger layoffs: Linamar

• https://www.theglobeandmail.com/business/article-tariffs-will-halt-north-american-auto-production-and-trigger-layoffs/

U.S. President Donald Trump’s 25-per-cent tariffs will quickly force North American auto plants to stop production, warns Linda Hasenfratz, executive chair of Linamar Corp., an Ontario-based supplier to the major automakers.

 

Mr. Trump said he would impose the tariffs on Feb. 1 to correct trade imbalances and spur Canada and Mexico to improve their border security, despite warnings from economists the levies will drive U.S. inflation and damage the economy.

 

The U.S. has a merchandise trade deficit with Canada of about $100-billion, but excluding Canada’s exports of oil the U.S. has a large trade surplus with Canada. The trade in cars and autos parts between Canada and the United States is about balanced, TD Bank economist Andrew Foran said in a recent research paper.

 

Ms. Hasenfratz said the costs of the tariffs will be borne by her customers — car makers — who require highly specialized components. It can take 12 to 18 months to source and engineer alternative parts, she said in an interview.

 

“It would just create an exorbitant amount of cost, and our customers can’t afford to absorb that,” Ms. Hasenfratz said in an interview Saturday. “Consumers certainly aren’t going pay it, so demand will disintegrate. So in my opinion, it wouldn’t be more than a week before we would see vehicle production in North America grind to a halt, and that means millions of people laid off, the majority of which would be in the U.S., and I can’t see how that’s a good thing for America.”

Edited 18 hours ago by Viking

[mananainvesting]

Anyone planning on adding $FRFHF / $FFH.TO if it drops on Monday??

[RichardGibbons]

26 minutes ago, cwericb said:

 

How about Canada restricts or stops electricity and oil exports? 

 

I think the other obvious one is potash.  The USA mines 400 tonnes, and consumes about about 6000 tonnes, 77% of which is imported from Canada. Potash is quite important if you want to grow food.

 

Farmers would be hit first, and many of them are in red states. Then I imagine there would be significant inflation in the cost of food.

[cubsfan]

27 minutes ago, Spooky said:

Bunch of people I have been talking to in Canada are saying they are not going to travel to the US this year for vacation.

 

Do you realize that trade benefits both parties? The US is abandoning the free market system it built and benefits the US tremendously.

 

 

It's not totaly about money. It's about the safety of US citizens. It certainly has gotten people's attention now. Art of the Deal all over again. Now leadership can have a fruitful discussion, just like when NATO lost their minds.

 

It's so simple.

[dwy000]

I suspect (and am hopeful) that this will all blow over in a couple of weeks.  An agreement will be reached with Trump declaring some major victory, the tarriffs will be cancelled and ultimately nothing will change.  Fentanyl will still be around, illegal immigrants will continue to cross the borders etc.

 

The longer term impacts however will be less obvious and more impactful.  Much like Germany realizing it was over exposed to a single counterparty in heating gas, Canada, Mexico, China and others will realize they need to diversify away from being too exposed to uncertainty and the whims of a single partner.  The big winner will likely be China who will run around signing trade pacts with everyone.  Just my guess 

[cwericb]

1 minute ago, RichardGibbons said:

 

I think the other obvious one is potash.  The USA mines 400 tonnes, and consumes about about 6000 tonnes, 77% of which is imported from Canada. Potash is quite important if you want to grow food.

 

Farmers would be hit first, and many of them are in red states. Then I imagine there would be significant inflation in the cost of food.

 

Then there are also certain minerals that the US needs from Canada as well. We can live without US orange juice and booze, etc, but can the US get along without the minerals, potash, electricity, oil, gas that Canada exports?

[Spekulatius]

 

@Viking Her 12-18 month estimates directionally correct. Any competitor will need to build anew plant (greenfield or brownfield ) to produce these parts I quantities.It is not like aus suppliers have huge spare capacity. now this problem is multiplied by having those tariffs on Mexico as well l so there is going to be lots of inquiries coming in that are possible to meet.

 

Then, if you are an US supplier thinking about adding those low margin products, you need to think about how attractive this business is l getting a reversal of polices (rug pull) as Trump changes his mind etc. There is no quick solution, stuff is going to get more expensive.

 

I also don’t see people lining up for these jobs, it not like these jobs are paying that well. Inhaber seen tech quitting for running cashier jobs in supermarkets because the pay wasn’t that different and the job is easier. We also have already and engineering talent shortage in the US.

[Spooky]

9 minutes ago, cubsfan said:

 

It's not totaly about money. It's about the safety of US citizens. It certainly has gotten people's attention now. Art of the Deal all over again. Now leadership can have a fruitful discussion, just like when NATO lost their minds.

 

It's so simple.

 

The wealthiest and most powerful country in the history of the earth can't compete effectively against goods made in socialist Canada so they need to put Tariffs on them.... what a world.

[Dinar]

2 hours ago, Blake Hampton said:

 

I did.

 

What do you expect him to do, talk bad about our fascist leader?

You have no clue what fascist are.  Had Trump been a fascist leader (Mussolini and Hitler), your ass would be in a concentration camp.  You have a right to criticize Trump all you want, and I think a tariff on Canada is foolish, but you don't have the right to distort the English language (hello George Orwell.)  When you use such absurd language, you force everyone not to take you seriously.  

[Buckeye]

The Leftist Rag WSJ had an article a few weeks back about the effects of the tariffs from Trump’s first term. 
 

They showed that capital expenditures started to turn lower about 15 months after the tariffs were first imposed.  We then ran into Covid, so it’s tough to know how things would’ve worked out. 
 

I guess we’ll see if things turn out different this time (could AI spending keep growing the economy), or will things start to slow? 
 

I think tariffs act more like sand in the gears of the economic machine.  

[LC]

3 hours ago, cubsfan said:

But most Americans agree they have had enough of fentanyl deaths, child sex trafficking, crime, open borders - especially with Mexico. Why would they care about the WSJ - a leftist rag.

 

 

Tariffs are going to stop illegal drugs, sex trafficking, and illegal immigration.

 

Remember when Nixon imposed 10% tariffs across the board in the 70s, and it totally solved the War on Drugs? Yeahhhhhhh....

[KFRCanuk]

31 minutes ago, Eng12345 said:

Thanks for bringing this one back up Spek. I traded it in December but decided to get out due to the tariff risk. I will be watching this one heavily. 

 

I would point out that giving a step wise change downward Alsea may be unavoidable, especially when you consider their revenues may not be affected. 

https://www.elorafergustoday.com/local-news/tariffs-would-bring-auto-industry-to-its-knees-linamar-ceo-10141899

 

Also RAV4 and CRV are built in Ontario and exported to USA. We will see if those plants will be idled in the coming weeks.

 

Stellantis exports lots of vehicles to the USA. They have been having severe structural problems in North America. I would be shocked if they survive long term.

[Spooky]

15 minutes ago, Buckeye said:

The Leftist Rag WSJ had an article

 

This is just too funny

[Red Lion]

43 minutes ago, Blake Hampton said:

Only 43 pounds of Fentanyl were caught at the northern border in all of 2024. 

That’s a shitload of fentanyl. 
 

* I don’t think tariffs will fix this problem just to be clear. 

Edited 17 hours ago by Red Lion

[cubsfan]

11 minutes ago, LC said:

 

Tariffs are going to stop illegal drugs, sex trafficking, and illegal immigration.

 

Remember when Nixon imposed 10% tariffs across the board in the 70s, and it totally solved the War on Drugs? Yeahhhhhhh....

 

So you want to distort what I have been saying - go right ahead @LC

 

You left out this part: tariffs with the Narco State forces President Sheinbaum to the table.

It costs her and her corrupt government big, big money - until such time that she sends the Mexican army to the border and LOCKS it down - just like happened during Trump's first term.

That was a huge success.

 

[Grafter]

39 minutes ago, mananainvesting said:

Anyone planning on adding $FRFHF / $FFH.TO if it drops on Monday??

 

I will be watching and potentially looking to do so.  But then, I'm also a johnny come lately to the Fairfax story.

[Red Lion]

1 minute ago, cubsfan said:

 

So you want to distort what I have been saying - go right ahead @LC

 

You left out this part: tariffs with the Narco State forces President Sheinbaum to the table.

It costs her and her corrupt government big, big money - until such time that she sends the Mexican army to the border and LOCKS it down - just like happened during Trump's first term.

That was a huge success.

 

I agree with this but Canada? Seriously? 

[dwy000]

8 minutes ago, Red Lion said:

That’s a shitload of fentanyl. 

Yes but to put it into perspective there was 26,700 pounds from Mexico in 2023. 

Edited 17 hours ago by dwy000

[Parsad]

21 hours ago, SharperDingaan said:

 

Inter provincial trade barriers would never have come down were it not for Trump. Similarly, a national energy policy, a national water policy, cross country rail and pipe transportation that  stays entirely within Canada, and new pipe going east.

 

Pipe entirely made from Canadian steel, laid by Canadian crew, using European fittings wherever possible, and with minimal US financing and/or involvement - to prove that it can be done.

 

And if some of that financing were Chinese .... well if you don't like it, buy them out at the Trump tariff!

 

SD

 

 

 

 

MACA - Make Canada Great Again...thanks Trump!  Cheers!

[james22]

48 minutes ago, Blake Hampton said:

Only 43 pounds of Fentanyl were caught at the northern border in all of 2024. 

 

43. Pounds.

 

Some of you have no idea what you're talking about.

 

Ironic.

 

You know fentanyl isn't really the issue, right?

[KFRCanuk]

50 minutes ago, Blake Hampton said:

 

Only 43 pounds of Fentanyl were caught at the northern border in all of 2024. 

 

43. Pounds.

 

Some of you have no idea what you're talking about.

 

Today, data produced by US civil service is considered as accurate. Going forward, not so much. I'm glad we can trust the Canadian government data.

[Blake Hampton]

Just now, james22 said:

Ironic.

 

You know fentanyl isn't really the issue, right?

 

By all means, please let us in on the real issue

[KFRCanuk]

I totally missed the Canada should join the EU articles... LMFAO. Would an epic troll.

 

Edited 17 hours ago by KFRCanuk

[Parsad]

5 hours ago, cubsfan said:

It's interesting to see all the predictions of US isolationism, the tariffs won't work, will cause inflation, blah, blah, blah. It's simply a realignment that focuses on our citizens.

 

Tariffs will be used to seal the border, reduce drug trafficking, increase security and increase middle-class  jobs in America - and lastly, reduce the trade deficit.

 

It's a wonderful thing for the country - even though it may get a little painful for everyone involved.

But it will be particularly painful for Mexico, given the asymmetrical relationship the US has with them. 

 

Unfortunately, you lose sight of the greater picture for $50B in annual trade deficits.  Barry Penner wrote a terrific op/ed piece for the Vancouver Sun yesterday. 

 

https://vancouversun.com/opinion/op-ed/barry-penner-an-upside-down-world-the-importance-of-keeping-u-s-canada-relations-on-an-even-keel

 

No one in the world is going to target Canada really.  But the U.S. is the biggest target in the world.  Your security was stronger working with Canada, with the World, than against.  Cheers!