America's "Best" Trading Partner!

President Donald Trump has launched a world-wide trade war. He has applied tariffs against all countries on Earth that have significant economies, except Russia, in an attempt to adjust trade relations, and return manufacturing to America from countries that he alleges are "ripping off America."

Some countries are obviously ripping America off. Those countries have non-tariff barriers that make it virtually impossible for American companies to sell products. Others are long standing trade partners that have trade surpluses with America in some areas, and trade deficits in others. President Trump is concerned about manufacturing in particular, as he wants manufacturing jobs to return to the USA.  

Of America's main trading partners, which one is the best, with "best" meaning that this country imports the most stuff from the United States, and therefore more willingly accepts the idea that trade should follow comparative advantage, where countries should just do what they do best, and trade between these countries allows for each to benefit from the other's comparable economic advantages?

Total imports of American goods and services to a country does not tell the tale of who is America's best trading partner. To get a sense of the "best", it is suggested that an analysis of imports of a per capita basis would be better as it would show the level to which the citizens and businesses in a given country are comfortable with importing both goods and services from the United States.

America's main trading partners, and their relative imports of American-made goods and services on a per capita basis, are listed below (2024 numbers in $ US). Services are included with goods as services are a massive proportion of the American economy, and inclusion of services provides a better picture of the overall trade relationship.

China - $164.6 Billion/1.415 Billion people = $116 per citizen

European Union - $630.43 Billion/450 Million people = $1,401 per citizen

Japan - $85 Billion/123 Million people = $691 per citizen

UK - $78.3 Billion/69.23 Million people = $1,130 per citizen

Australia - $61.6 Billion/27.2 Million people = $2,265 per citizen

South Korea - $87.2 Billion/51.75 Million people = $1,690 per citizen

Mexico - $384.4Billion/130.9 Million people = $2,937 per citizen

Canada - $764.9 Billion/41.29 Million people = $18,525 per citizen

For every $1 US in goods and services that China imports from the USA on a per capita basis, Canada imports $159 US. 

Canada's relatively massive imports of goods and services from the USA are driven both by acceptance of the basic precepts of free trade, and by the very close proximity of the two countries. Still, it is what it is - based on who actually imports goods and services from America, there is simply no question which country is America's best trading partner.

Note - the board of mewetree.blogspot.com is Canadian and drives a car that was made in America. Of nine homes in the neighborhood, four have American-made cars in their driveways. How many neighborhoods in China, the EU, Japan or South Korea could say the same thing?

 

Trump Fraud Case - Update #2

The team here at Mewetree.blogspot.com has questioned the validity of the fraud case against Donald Trump in New York State.  Please see below...

mewetree: Trump "Convicted"!! - Trump's Fraudulent "Fraud" Conviction

mewetree: Trump Fraud Case - Update

A New York appeals court has throw out the massive $450 Million penalty applied in that case against Donald Trump and his business corporation. 

The court said this...

In the prevailing opinion, the judges wrote, “While the injunctive relief ordered by the court is well crafted to curb defendants’ business culture, the court’s disgorgement order, which directs that defendants pay nearly half a billion dollars to the State of New York, is an excessive fine that violates the Eighth Amendment of the United States Constitution.”

The appeals court left restrictions on Trump's business activities in place.

This decision will be appealed. It will get to the United States Supreme Court where it will be entirely reversed.

To recap, the decision is based on the use of consumer protection law, where it was alleged that Trump defrauded his creditors by overvaluing his properties in order to get higher loans than he was entitled to. His creditors have never complained about those loans. It is a consumer protection case where no "consumer" thinks they were defrauded. 

The United States Supreme Court will be savage in its condemnation of this obvious prosecutorial and judicial overreach. It is possible that both the prosecutor and presiding judge will face sanction by their relevant law societies stemming from their participation in this outrage. 

Trump's Tariffs Will Make Trade Great Again!

President Trump took office to start his second term at 11:00 am, January 20, 2025. A key plank in his electoral platform was to introduce tariffs to incentivise industry to locate to the United States to create jobs and rebuild the American industrial base. (BTW - Obama invented with word "incentivize".)

Trump's Tariff Terror was unleashed on the world on April 1, 2025. Here is President Trump on Liberation Day... 

(NB. the 70% here is on the high side and is "for effect". Trump actually imposed a basic tariff of 10%, not 70%, on April 2, 2025. Still, this looks pretty good.)

President Trump has variously imposed, stopped, reimposed and then stopped again tariffs against many of countries as negotiations proceeded to address his central claim that the entire world had been taking advantage of the United States. Because of this, it is hard to track what he has actually done vis a vis tariffs since January 20, 2025. Nonetheless, here is a good summary of what tariffs he has actually imposed since then.

January–April 2025:

• Feb 1: Imposed 25% tariffs on imports from Canada and Mexico, and 10% on Chinese goods, citing national emergencies like fentanyl trafficking.
• April 2: Announced a universal 10% tariff on all imports, with higher “reciprocal” rates for countries with trade deficits.
• April 3–5: Sectoral tariffs hit foreign-made cars (25%), steel, aluminum, and copper (25%) heavily impacting Canada and Mexico.

July–August 2025:

• Trump threatened and then implemented 35% tariffs on Canadian goods, citing lack of cooperation on drug enforcement and trade retaliation.
• Tariffs on dozens of countries—including the EU, Japan, South Korea, Taiwan, and Vietnam—were raised to 15–20% starting August 7.
• India was hit with a 50% tariff due to its continued purchase of Russian oil, prompting a pause in U.S.-India arms deals.

As an aside, it is worth noting that President Trump's tariffs will, if continued at present rates, raise just about enough new revenue to off-set the budget deficits that the United States will run owing to the massive tax cuts to the rich that were provided by way of the Big Beautiful Bill, at least out to 2035. The rich will get tax cuts, importers and the poor and middle class will get to pay tariffs. The word you are looking for is "Oligarchy". For a previous post on new political science terminology, please see here...

mewetree: New Poli-Sci Terminology!

So how are President Trump's tariffs going to make us great again? 

Explaining this requires a quick review of economic history.

The world has moved from free trade, to isolation and tariffs, back to free trade again regularly since the British repealed the Corn Laws in 1846. The concept of free trade - that countries should concentrate on whatever economic activity in which they excel, and trade with other countries that similarly concentrate on what they excel, meaning the world will benefit from the best that every country has to offer thereby "lifting all boats" - became international economic orthodoxy very quickly thereafter. Soon after the British opened their door to free trade, everyone was on the bandwagon. By 1854, for example, Canada and the United States had concluded a Reciprocity Treaty that ran to 1866.  

Free trade promised great things for everyone, everywhere! Then politics got in the way. 

The historical epochs with free trade have relied to a very great extent on trust. In short, countries have to trust that their trading partners aren't trying to gain an unfair competitive advantage in order to continue to leave their markets open to foreign goods, services, agricultural products and raw materials. When trust has dissipated, owing either to legitimate allegations of cheating, or to other political developments that resulted in one country canceling its free trade arrangement with another to punish that country - the United States cancelled the Reciprocity Treaty with Canada in 1866 owing to British support of the Confederacy in the Civil War - then the world has returned to tariffs and isolation.

The ultimate achievement in the history of free trade was the phenomenon of Globalization that was established after the end of the Cold War. One main beneficiary of this, without question, was China. In the span of a little over a generation, China moved from Third World status, to become the second strongest economy in the world. In so doing, the Chinese likely cheated, with this cheating being a large reason why trust in free trade started to dissipate starting at least a decade ago. The specific allegations are that China cheated through subsidies, forced technology transfers, the wide-spread theft of intellectual property, and a regulatory system that favoured domestic over foreign firms.

Another huge beneficiary was Mexico, which, through a free trade agreement with the United States and Canada, has grown its manufacturing base from essentially nothing to the point where it produces 25% of all automobiles in North America, and it supplies 40% of the entire American automobile market. Like China, Mexico faces allegations that it cheats, in the case of Mexico by artificially keeping industrial wages so low that the United States and Canada cannot compete.

Regardless of the fact that Donald Trump is President of the United States, the world was moving back to tariffs and isolation because the dissipation of trust is now a world-wide phenomena. Trump is a symptom, not a cause, of retreat from the world-wide consensus that free trade is a good thing.

And what a symptom he is! 

President Trump's almost war-like assault on free trade through the invocation of unprecedented tariffs against just about every country on Earth is having the effect of pushing the entire planet very quickly into the next epoch in our collective economic history, which will be a time of isolation and tariff barriers, accompanied as it always is by economic stagnation, recession, and for some countries, depression. 

We should thank Trump for this! 

Here's why...

The move from free trade, to isolation and tariffs, then back to free trade is cyclical and normal.  

The move from isolation back to free trade stems from economic stagnation occasioned by isolation and the realization that with free trade everyone will do better. 

The move from free trade back to isolation and tariffs stems from years living comfortably with the benefits of free trade - to the point that we forget what it was like to be poor and to struggle - coupled with the end of trust usually occasioned by one country or the other cheating the system. 

We have been seeing this second movement underway for over a decade.

The move from free trade to isolation and tariffs would normally take perhaps decades, as it requires the neutering of trade systems that were themselves meant to last for decades, if not forever. If politics had continued as normal without President Trump arriving on the scene, it could have taken perhaps another ten or twenty years to get to the point where we have arrived at our foreordained future of economic stagnation from isolation and autarchy.

But Trump has pushed all of this forward at a record pace!

The speed with which he has applied tariffs and overthrown the world-wide free trade order means we may very well get to economic stagnation much faster this time - expect a world-wide recession within 12 months. This is arguably a good thing as it also means we will likely see a cyclical movement back to a free trade consensus much faster than we would have without Trump's Tariff Terror.

And so, Trump can be seen as a fortuitous catalyst for rapid cyclical economic change. In the end, Donald Trump will make Free Trade Great Again.

Thanks. 

State of the US Economy with Trump Redux

There are worrying trends in the United States economy, especially in the last six months.  

Here are some basic measures.

House Prices: After recovering post-COVID-19, median house prices in the USA have dropped by about 7% since the start of 2023. 

Median Sales Price of Houses Sold for the United States (MSPUS) | FRED | St. Louis Fed

Total Car Sales: Car sales in the USA rocketed after COVID-19. They have dropped on an annualized basis by 15% in just five months.

Total Vehicle Sales (TOTALSA) | FRED | St. Louis Fed

Used Car Prices: Used car sales and prices are a key indicator of the state of the economy as they are a direct measure of how the poor and lower middle class are fairing. Here are used car prices in the USA. These prices exploded by 63% in the four years after COVID-19. Prices have dropped by 15% just in the last six months.

Consumer Price Index for All Urban Consumers: Used Cars and Trucks in U.S. City Average (CUSR0000SETA02) | FRED | St. Louis Fed

If these trends continue, the US economy will stagnate as housing and cars are the foundation of that economy. So far, this is not happening. Regardless of these trends, basic measures of economic performance are still holding up.  

Here they are.

Unemployment Rate: The US unemployment rate is holding around 4%. This is excellent, and near the natural rate of unemployment. If you want a job in America, you can likely find one.

The Employment Situation - June 2025

Labour Force Participation: After plummeting in COVID-19 to about 60%, this rate has recovered, and remains steady just over 62%, although it has not yet recovered to its pre-COVID-19 level.

https://fred.stlouisfed.org/series/CIVPART

Inflation: The Trump Tariff Terror threatens to raise inflation as tariff costs are passed on to US consumers. So far there is scant evidence of that, with the rate of inflation only rising from 2.3% in the spring, to 2.7% in June.

https://tradingeconomics.com/united-states/inflation-cpi

Personal Debt: The proportion of annual income that is devoted to debt repayment has risen slightly to just over 11%, but is still nowhere near to its historic peak of over 15% in 2008. Those who preach about the perils of debt may be off base. Still, with higher interest rates, this could become more of a problem over time.

https://fred.stlouisfed.org/series/TDSP

Conclusion:.... 

Trump's management of the economy may be causing ripples in terms of a loss of confidence in places, and there is some cause for worry in the automobile and housing markets, but so far there is almost no evidence that he is having a negative impact on the US economy. 

(P.S. I know many of my readers want me to pillory the guy.  Sorry, the evidence simply isn't there.)

Is Carney Real?

 Please take a close look at this...

Does this not look like an AI-generated photo? 

He's walking from out of a cement railing! 

His left leg is screwed up! 

Is he walking up a step or what?  There is a step on the right, but there does not appear to be one on the left!  

The shadows from his legs are in different directions!  

The plant holder to the left looks as if it is part of the cement railing!  

The Capitol Building looks just slammed into place!

Does Carney even exist?  

Congress v Trump = Dead MAGA

The American President has levied a wide range of un precedented tariffs against about 180 nations and sub-national jurisdictions world-wide.  

The United States Constitution is crystal clear regarding the authority to levy tariffs. See here...

"Article I, Section 1 of the U.S. Constitution, known as the Legislative Vesting Clause, provides that "[a]ll legislative Powers herein granted shall be vested in a Congress of the United States." Article I, Section 8 includes among Congress's specific powers the power to "regulate Commerce with foreign Nations"4 and the power to "lay and collect Taxes, Duties, Imposts and Excises." The Constitution thus gives Congress the power to enact legislation imposing tariffs on U.S. imports, although it limits this power by providing that tariffs "shall be uniform throughout the United States." (https://www.congress.gov/crs-product/R48435)

This congressional authority over tariffs has been delegated to the President of the United States in certain circumstances.  

These include the following...

• Section 232 of the Trade Expansion Act of 1962 - tariffs based on national security of importation of a particular article;
• Section 338(a) of the Tariff Act of 1930 - tariffs on articles of any foreign country that discriminates against articles that affect the growth of the United States;
• The International Emergency Economic Powers Act - tariffs to deal with any unusual and extraordinary threat to the national security, foreign policy, or economy of the United States, should the President of the United States declares a national emergency with respect to such threat;
• Section 301 of the Trade Act of 1974 - tariffs if American rights under a trade agreement are being denied; and, 
• Section 301 - tariffs “if an act, policy or practice of a foreign country .... is unjustifiable or restricts United States commerce.” (https://cdhowe.org/publication/jon-johnson-does-a-us-president-have-the-power-to-unilaterally-impose-tariffs/)

These authorities come from the United States Congress. The tariffs that President Trump has imposed are not supported by the majority of federal legislators. It is just a matter of time before Trump loses a stand-off with Congress, and the tariffs are revoked.

On that, the United States Senate has voted to halt tariffs on Canada - 51 to 48.  The Senators in question do not accept the Trump Administration's rationale for tariffs on Canada, which is based on alleged and completely non-existent massive imports of Fentanyl. The vote has to be confirmed in the House of Representatives for the tariffs to actually be revoked. As of writing, there is no plan for this to happen.

It doesn't matter. The Senate's vote to revoke tariffs on Canada will be small potatoes compared to what is coming. As Trump's completely unprecedented and massive tariffs work their way through the world's economy, sparking inflation in the United States and an unprecedented world-wide recession, American legislators will either have to take action, or face the wrath of American voters at the mid-terms in 18 months. 

These tariffs are the solvent that will finally dissolve the glue that has kept the MAGA movement together. 

No one who is up for reelection in November, 2026 can stand for office if they did nothing to stop this economic madness. The only thing holding them back will be the prospect of delivering massive tax cuts to their corporate and wealthy benefactors - the screams of their constituents will overwhelm this inclination.

Trump is about to suffer a political defeat that may break his presidency. 

Having checked Trump in Congress, and in light of the fact that he will be a lame duck president in less than two years, Republicans may finally show some backbone and cut him loose. Other than facing one or two more impeachment trials for misbehavior in office, Trump may well spend most of his time golfing as Americans struggle to recover from the leadership of a man who has not had an original economic thought in 40 years.

This is a matter of "Shooting yourself (and the rest of the world) in the foot..." (WB 🐰) 

Amen!

Canada Will Not Become The 51st State - Here's Why...

North America is atwitter! The new American President has variously commented on the possibility of Canada becoming the 51st state, or he has actually threatened to make Canada the 51st state through the use of economic pressure.

He is full of shit up to his eyeballs. Here is why...

By "51st state", what is clearly meant is that Canadians would become Americans in every sense of the word, especially when it comes to political rights. President Trump has never suggested something like territorial status for Canada, akin to the status of Puerto Rico. 

The prospect of 41 Million Canadians voting in elections for the House of Representatives, the Senate and the Presidency will cause Republicans to reject any notions of Canadians becoming Americans. The political implications for Republicans are so dire, that Canadians will not become Americans even if they were asking for the honour (Note - spelled "honour", not "honor".)

For starters, 41 million Canadians becoming Americans would work out to about 55 seats in the House of Representatives. Looking at the results of the last five congressional elections, the largest majority that was obtained by either the Republicans or Democrats was a 47 seat majority for the Republicans in 2016. Right now, the Republicans have a razor-thin 3 seat majority.

If former Canadians could vote in US elections, recent polling shows that they would vote between 42% and 62% for the Democrats, and only 14% to 21% for the Republicans. There were a large number of undecideds in these polls. Apportioning these undecided preferences across the given results, we get about 72% support for the Democrats, and about 28% for the Republicans. If this were to hold, the Democrats would see another 38 - 40 seats in the House of Representatives each election, and the Republicans would receive about 15 - 17 seats.

Conclusion - With Canadians voting in American elections, it may be virtually impossible for the Republicans to ever win a majority in the House of Representatives, absent a generations-long demographic shift in voting patterns.

If Canada went into the United States as one state, it would get two senators. But it would also be larger than the other fifty states combined. This makes no sense. To maintain some semblance of geographic balance, and to respect the substantial cultural, economic and political differences between Canadian provinces, it would make more sense for the ten Canadian provinces to go in as separate states, with the territories accorded something like territorial or commonwealth status. 

Doing this would net Canadians twenty seats in the Senate. If present voting patterns held, Alberta and likely Saskatchewan would vote Republican; Quebec would vote for an independent senator who would easily identify with the Democrats - think in terms of a French Bernie Sanders - and the other six Canadian states would vote for the Democrats. The result would be 16 new Democratic senators to only four Republican senators.

Right now, the Republicans only have a three seat majority in the United States Senate.  

Given how close the election results normally are in the Senate, bringing Canadians into the American political fold would mean that the Republicans may not win the Senate ever again.

Finally, 41 million Canadians would get about 75 Electoral College votes in every United States presidential election (N.B. number of Senate seats plus number of seats in the House of Representatives.) If Canadian voting intentions held, and assuming that only Alberta and Saskatchewan went Republican, bringing Canadians into the United States political system would net the Democratic candidate about 60 out of a possible 75 Electoral College votes in every presidential election. 

In last year's presidential contest, Donald Trump won 312 Electoral College votes to Kamala Harris's 226. Adding likely Canadian voting results to this would have had Trump at 327, and Harris at 286, so the result would have been the same. Nonetheless, with former Canadians voting in American elections, Republican presidents would face a permanently hostile Congress.

Republicans can do math. They no doubt completely understand the implications of absorbing 41 million Canadians in to the United States political system, and that those implications would be dire for their collective political prospects. Because of this, it wouldn't happen even if Canadians were asking to join.

But that is not all....

Canadians have a different political culture and experience than that of Americans. They have a history of either voting for regional parties, or for voting for national parties with strong regional biases. This raises a delicious possibility...

What if Canadians, after having been forced to join the United States, refused to vote as either Republican or Democrats, and voted for a Canada Party instead?

A Canada Party would almost always hold the deciding vote on every single piece of legislation, and every single budget initiative in the House of Representatives and the Senate as neither the Republicans not the Democrats could normally obtain sufficient seats to constitute a majority and pass legislation without Canadian support. 

In short, to get any work done in the form of new laws or budgets, the Republicans and/or the Democrats would have to buy Canada's vote.

Canadians are very familiar with the brokerage style of politics in the USA - "You scratch my back and I'll scratch yours." One can just imagine the number of bridges to nowhere and hockey museums that Canadians' ability to blackmail the American legislative and budgetary process could buy!

And there's more!

If Canadians were forced into the American political system with full political rights, presumably they would be able to run for the office of the President of the United States! 

What would happen if a Canadian candidate for the presidency offered stronger labour protections (Note - spelled "labour" not "labor"); a "free" single-payor health care system; and the taxation of the wealthy in favour of income transfers to the poor and middle class to an American citizenry that has been duped into thinking that their subservience to the wealthy; diminishing economic well-being; and scant access to health care is "freedom"? 

These people have been betrayed by political sell-outs across the American political spectrum - both Left and Right. Would something like this coming from a Canadian presidential candidate shake up the "swamp"? 

Yup, and that's why the Democrats, who offered none of this in the last election cycle, would also not want Canadians in the American political system. 

The Democrats are sell-outs?

Here is Bernie Sanders' response to President Trump's inaugural address. It covers everything Sanders thought Trump should have addressed in his speech if he actually cared about Americans. What he didn't say was that it was also everything that Harris wouldn't or couldn't promise either. 

The Democrats know who gave her $1 Billion for her campaign, and what they are expected to not do for the American people in return. 

https://www.youtube.com/watch?v=vHH-KI2yk8s