LYTLE: As Canada fights for the right to pay more for butter...

Before 'free trade,' I had a Marxist professor for a graduate-level macroeconomics course. Much to my surprise, he was fair-minded and quite funny and put up with my insistence on the validity of Reagonomics. I was all in for the stimulative nature of tax cuts — especially if it was my taxes being cut. Those ones stimulated me to no end.Apart from wondering whether the supply side economics of the Reagan years had ended the business cycle, we were concerned about the nature of protective tariffs. The globalist international agencies were moving towards free trade, and Milton Friedman made a fortune consulting to liberalizing Latin American countries. But my Marxist professor was not so sure. “When you get into bed with an elephant you know two things; he will roll over and you will be crushed. You just don’t know when.”Now we have the “when.” The US has rolled over and we are bereft of sheets and breath. The tariffs are on. It is my view that Mr. Trump is motivated by a need to raise money without going to his taxpayers directly and he really wants Canadians to wake up to geopolitical realities. But what do I know? I think we have responded to the tariff crisis (if in fact, it is a crisis, which I doubt) with Oscar-winning ineptness. In fact, my metaphor for Canada’s response is Monty Python’s Black Knight scene. Failure to see reality leaves one looking stupid. It is worth the watch.Remember — Mr. Trump’s tariffs bring pain to Americans. Our pain comes from Mr. Trudeau’s tariffs.Economics being the dismal science, I hesitate to push my views too vigorously but I am intrigued by the Monty Pythonesque back and forth between Trudeau and Trump.“Tariffs at 25% eh? Well, take these 25% tariffs, you orange coloured demon!”“Fine! I will see your 25% and raise you to 50%, you puerile imposter!”When will it end? When we have lost all of our economic limbs? But what exactly is subject to tariffs? The government of Canada has very nicely provided a detailed list, and you might be as surprised as I wasSadly, the cost of my American cockroaches, grasshoppers and other insects is now 25% higher. Perhaps out of range of my constrained budget. There are tariffs on US milk products, of course, but these products were always subject to Laurentian tariffs to keep Quebec dairies in business. US meat and edible offal, particularly if boneless, is now more expensive. But perhaps Canadian meat packers will now have to price their product for a Canadian rather than US market. Maybe meat prices will come down due to oversupply in a reduced market. Predicting the results of tariffs is a tough sport.No more buying Gallus domesticus from our American cousins which, I suppose, is a shame. Especially the ones with the cute southern accent. And no more buying US bird eggs. Did we ever buy US bird eggs? Their prices are a lot higher than ours so maybe that market was restricted to idiots in Laurentia. Maybe that explains Mr. Trudeau’s food bill. No more US coffee and tea! The US produces coffee and tea? Did Juan Valdez move? The most surprising product subject to tariff is maté. The only maté with which I am familiar is the tea and paste made from coca leaves from which comes cocaine. Since when has the US become a net exporter of indigenous cocaine precursors? No more US wheat, rye, barley, oats, rice and canola for my table. Canadian farmers will rejoice given that Canada has always been a major net exporter of such things. Wine, of course, is going to go up in price. At this rate BC wines will now be competitive with California wines in Ontario. Cigarette and other tobacco smuggling has just gotten 25% more lucrative and it would seem we will no longer be importing sand from the US. Cosmetics and shaving products are now more expensive so I will have to go back to lye soap and stains under the armpits of my shirts. Wood and wood products from the US are going up in price but, in a country with enough trees to save us from net zero, do we actually buy wood and wood products from the US? If so, then shame on us.I could go on. My conclusion to all this is that China will do well enough to compensate in small measure for their losses in the US market and we will boast of trading our pique for a price hike. This will get sorted out when Mr. Trudeau is finally a diminishing speck in Canada’s political rear view mirror. If Mr. Carney is elected Prime Minister, then our problems will be a lot larger than tariff impacts and if Mr. Poilievre is elected, we may have an adult to sort it all out.In the meantime, I think we will survive. Get used to more brand names like Bosch and LG in your homes.

LYTLE: As Canada fights for the right to pay more for butter...

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