Sundance was right: Canadian Trade Reversal Now Seems Increasingly Likely – Nervous Freeland/Trudeau Trying to Position for Political Face Saving…

Trudeau shouldn't have so publicly disrespected Trump.  There are consequences when the US President enjoys crushing his enemies, driving them before him, and hearing the lamentations of their women.

You can bet other world leaders, and especially the Communist Chinese, are watching this play out very carefully.  I wonder what the words are for "oh chit.." are in Mandarin?

The pertinent part of Sundance's latest analysis:

Team Trump has positioned this perfectly. By using NAFTA section 2202, to construct a modification of the original 1993 agreement, Lighthizer is intending to send a 90-day notification letter to congress informing them the U.S. and Mexico have agreed to modifications of their bilateral trade agreement.

This approach allowed Trump/Lighthizer to position Canada with a take it or leave it option.  If Canada didn’t accept, Lighthizer files a simultaneous section 2205 notification withdrawing the U.S. from a NAFTA partnership with Canada.  If Canada did accept Lighthizer adds them to the 2202 (modification) notification.

A 2205 withdrawal meant Canada and the U.S. would need to enter a bilateral trade deal entirely separate from the U.S-Mexico deal.  President Trump already publicly said what the terms of that bilateral would entail.  In the interim he would initiate a 25% tariff on Canadian made automobiles (massive leverage).

However, in order for Canada to accept or join, via 2202 modification, they would need to agree to the modification terms.  For Canada they would have to: drop their protectionist tariffs on the dairy sector, open their telecommunications and banking sectors and eliminate the subsidies on aeronautics and soft-wood Lumber sectors.   In essence open their economy to fair market competition and agree to intellectual property protections.

Canada had to choose between taking on Trump individually, a NAFTA withdrawal, or accepting the terms of modification.  The prism for Canadian decision-making is entirely about politics.  Justin and Chrystia have to make a political decision, or change their perspective and look at the economics.  Incredibly, it now appears Canada is going to accept the modification route.

The Canadian electorate will not return Trudeau to power. That's my prediction - bank on it.

Chrystia and Justin appear to be polishing up their knees, to properly bend the knee.  The children are being taught by the master, although it remains to be seen if they are capable of learning their lesson.

I have to say, that although the Canadians are our allies and brothers and sisters, Trudeau is not, and Castro's spawn is not worthy of respect. After Obama's humiliating groveling and bowing to all and sundry overseas, it's simply great to have a President that takes no chit, and makes those who give him grief pay and pay again.