April 7th 2025
I have been thinking all day about what to write today. My goal is to try and write about the events of this crisis each day as long as it lasts. In part it is because I need to work things out and not go insanes, and in part because when major global events happen, when that change happens, we forget how things felt the day before.
I should have started this sort of thing in 1989 as communism fell. Or the start of the Ukraine war, Or numerous other events. But I did not. All the previous events did not suck the soul out of me each and every day like Trump is.
This crisis is also different because it only exists because the President of the United States is stupid and has no understanding of economics, governance, or business. We are headed into a recession, which will very likely be the worst one of my life.
A recession will happen because the tariffs will harm the exchange of goods for money. In theory it is still possible for for Trump to call this off but that would require him to clearly state this week that his strategy is a huge mistake and he will not do this again.
Something like $10,000,000,000,000 has been lost by American investors. The US GDP is only $28,000,000,000 per year. In the space of three business days and a weekend, the American economy lost 1/3 of the projected total production of value by the American economy. The American stock markets have not yet accounted for the coming recession, not really. The markets have also not accepted that Trump is serious about the tariffs.
I am not sure what it would take for Trump to step back from the brink and stop what he is doing. Clearly it is not trade negotiations since his tariffs are not connected to the reality of trade. He is also not treating countries fairly. Trump only cares about the goods trade deficit, but he still put tariffs on countries that the US has a surplus with.
Let us say the American economy really crashes, something much worse than 2008/09. Would that be enough to change his mind? Will he withdraw his tariffs and declare victory? I am not expecting him to apologize for the harm he has caused. Even if he backs down now it is likely too late.
Canada has the longest free trade relationship with the US, the core of which was the 1965 Auto Pact. The North American car industry has been integrated for 60 years now. This is what both of the countries wanted and the industry has spent two generations working as if there is no border.
Donald Trump was still in high school when the Auto Pact was signed. He does not really remember a time when the car industry was not integrated.
I am bothered by Trump constantly saying how the US is suffering and he has to do this to make it the biggest economy on earth. Did I miss the memo? Did the US at some point cease to be the large booming economy it is? The US is a very wealthy country, how will the tariffs make it wealthier?
One way I can be certain a recession is coming is that the loss of Canadians going to the US and the total drop off of buying American produce is more than amount the American economy was predicted to grow by six months ago,
Attacking Canada he way he has means that alone will start the recession. Increased cost of Canadian aluminum will hurt. The car industry will have a drop in sales and that alone would cause a recession. Now, imagine all the products from China being 50% more expensive. I do not see how Walmart survives this as they are China's retailer in the United States.
And then there is the rest of the world.
This is not going to be a recession, this is going to be a bad American depression. Unemployment like not seen since the early 1930s.
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