TARIFF TANGO: CANADA AND USA'S ECONOMIC DANCE OF DOOM

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Hey there, economic disaster enthusiasts!

Giga Chan here, your friendly neighborhood economic tragedy reporter, coming at you with the latest installment of "How to Make North America Financially Miserable 101." Grab your overpriced coffee (thanks, inflation!) and settle in for a wild ride through Canada's economic hellscape and the spectacular Canada-US trade war that absolutely nobody asked for. But first a word from our sponsor:

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INFLATION: THE GIFT THAT KEEPS ON TAKING

Remember 2019? When we complained about paying $4 for avocado toast? Oh, the innocence! Fast forward to post-pandemic Canada, where inflation went from a cool 0.7% in 2020 to a spicy 6.8% in 2022. That's not a spike; that's Mount Everest on an economic chart.

What happened? Well, a delicious cocktail of:

• Supply chain meltdowns (turns out, global shipping is important!)

• Pent-up demand (everyone suddenly wanting to travel/party/buy stuff)

• Food prices doing their best rocket impression

• Energy costs that made filling your gas tank feel like buying a small car

• And let's not forget shelter costs! Rents up 7-8% and mortgage interests that made homeowners consider living in tents

By early 2025, we've managed to wrestle inflation down to around 2-3%, but don't break out the champagne just yet. Your groceries and housing costs are still eating your paycheck faster than you can say "fiscal responsibility."

LIBERAL LOVE AFFAIR WITH DEFICITS

Our beloved Liberal government under Justin Trudeau has been in a committed relationship with deficit spending for nearly a decade. Before COVID, they were already dropping $70B+ annual deficits like they were Spotify playlists. Then the pandemic hit, and they went full "money printer go brrr" mode.

The result? Federal net debt rose from about 31% of GDP in 2019 to around 42% by 2024. That's like maxing out your credit card, getting another one, maxing that out too, and then telling yourself it's fine because you're "investing in your future."

Even Bank of Canada Governor Macklem – not exactly known for dramatic statements – warned that "large spending increases... could get in the way" of lowering inflation. Translation: "Please stop throwing money at everything. Pretty please."

But hey, at least we got that one-time federal sales-tax holiday (Dec 2024-Feb 2025)! It shaved a whole 0.8 percentage points off inflation. It's like putting a Band-Aid on a broken leg, but we'll take what we can get.

TRADE WAR: BECAUSE ECONOMIC STABILITY IS OVERRATED

Just when you thought things couldn't get more exciting, enter President Trump (Part 2: Electric Boogaloo) with a flurry of tariffs! In early 2025, he slapped 25% tariffs on most Canadian imports, calling it a "national security emergency action." Because nothing says "national security threat" like Canadian maple syrup and hockey sticks.

Canada, not to be outdone in this economic suicide pact, immediately retaliated with 25% tariffs on C$30 billion of U.S. goods. It's like watching two neighbors set fire to each other's houses while yelling, "That'll teach you!"

What does this mean for you? Higher prices on basically everything! Cars, tools, agricultural products, energy – you name it. Economists describe tariffs as "simply inflationary," which is economist-speak for "you're going to pay more for stuff, sorry not sorry."

MARK CARNEY: SAVE US WITH MORE... SPENDING?

Enter our economic savior Mark Carney with his "Canada Strong" platform. His solution to our fiscal woes? checks notes Even LARGER deficits and MORE spending! A bold strategy, Cotton, let's see if it pays off.

The Liberals project roughly C$130 billion in new initiatives over four years. That's an extra 0.5-0.6% of GDP per year in stimulus, because clearly what an economy with persistent inflation needs is more money pumped into it!

Carney's plan includes deficits of C$62.3B in 2025/26, gradually tapering to a still-eye-watering C$47.8B by 2028/29. But don't worry – there's a promised "balanced operational budget" by Year 4. It's like promising to stop eating dessert... four years from now.

On the plus side, Carney would repeal the federal carbon tax on consumers from Day 1. On the minus side, this removes a price signal that was actually helping tame inflation (albeit minimally).

As Bank of Canada Governor Macklem delicately put it, these new spending plans "could start getting in the way of getting inflation back down." That's central banker speak for "ARE YOU KIDDING ME RIGHT NOW?!"

THE GRAND FINALE: ECONOMIC DISASTER BINGO

So here we are, playing Economic Disaster Bingo with a full card:

• Inflation that's technically better but still hurting your wallet ✓

• Government debt that would make your financial advisor faint ✓

• A trade war that absolutely nobody benefits from ✓

• Political promises of more spending that could reignite inflation ✓

What's the solution? According to our esteemed economists, we need to "balance disinflation without stifling growth" and "finance ambitious programs without destabilizing public finances." Which is about as helpful as saying the solution to drowning is to "breathe while not inhaling water."

In conclusion, dear readers, buckle up for a wild economic ride. The good news is we've survived inflation peaks before. The bad news is... well, everything else I just told you.

Stay financially vigilant (or just develop a sense of humor about economic collapse),

Giga Chan
Chief Economic Disaster Correspondent
CanAmericanNews.com

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