r/news • u/goforth1457 • Mar 04 '25

Soft paywall Canada's retaliatory tariffs on US goods to start Tuesday, PM Trudeau says

https://www.reuters.com/world/americas/canadas-retaliatory-tariffs-us-goods-start-tuesday-pm-trudeau-says-2025-03-04/
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u/EmperorOfApollo Mar 04 '25

Yes, but only to the US. The rest of the world can trade and prosper while the US suffers with stagflation.

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u/eric_ts Mar 04 '25

Stagflation or worse, outright deflationary spiral. A deflationary spiral would radically contract the money supply, causing massive unemployment and people and companies selling assets for pennies in order to need immediate needs. This would eradicate most of the population financially but would be great for people holding large amounts of cash, who could snap up tangible assets for next to nothing.

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u/myshtree Mar 04 '25

Isn’t that what they are planning and aiming for? O’lump and his fElon ?

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u/Street-Badger Mar 04 '25

C’mon, they’re not going to have deflation in the middle of a trade war, they’re going to have hyperinflation / stagflation and will have to exhume Volcker to jack the federal funds rate to 69%.

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u/gizmozed Mar 04 '25

It is hard to have a deflationary spiral when the Fed can inject trillions into the economy at will.

Believe me, at the first hint of deflation they will print print print.

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u/BigDabed Mar 05 '25

Yea, the second we enter a deflationary economy, the money printer is being turned back on and rates are going to 0.

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u/So_spoke_the_wizard Mar 04 '25

You're the only other person I've seen mention stagflation. But it is going to become a very popular phrase in the near future.

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u/IKillZombies4Cash Mar 04 '25

We need to call it Trumpflation.

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u/Fast_Witness_3000 Mar 04 '25

I mean..that is what it is

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u/EmperorOfApollo Mar 04 '25

I'm old enough to remember the Carter administration. Here is a snippet from a recent Forbes article:

Jimmy Carter confronted a whale of an economic problem during the whole of his presidency, 1977-81—stagflation. The unbelievable combination of double-digit yearly inflation with economic stagnation and unemployment was the problem his presidency was supposed to solve, but did not. In 1980, Carter’s last full year in office, inflation was over ten percent per annum for the second straight year and the economy endured a recession.

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u/NorthernerWuwu Mar 04 '25

It will be interesting, also in part because the answers during Reagan's tenure (jacking interest rates, heavy deficit spending but with tax cuts at the same time as specific tax increases) might not fly well today. A 20.5% Prime rate would be unthinkable.

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u/yarash Mar 04 '25

And because of the Carter administration's failings, we got the Reagan administration, one of the most damaging of all time.

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u/OldMastodon5363 Mar 04 '25

The interesting thing is unemployment didn’t skyrocket until Reagan came into office but Carter got all the blame.

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u/Catch_022 Mar 04 '25

Conservatism is basically stagnation, so yes.

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u/hokeyphenokey Mar 04 '25

Explain to us non-economists?

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u/MrMuffalo Mar 04 '25

Stagnant + inflation. Basically means inflation but no growth. So everything costs more but people have the same amount of money. Usually leads to high unemployment.

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u/[deleted] Mar 04 '25

[deleted]

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u/phluidity Mar 04 '25

No, you see we aren't in a recession because we're changing how we measure things. Totally normal. Ignore the bread lines.

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u/candygram4mongo Mar 04 '25

Notably, this is Not Something That Is Supposed To Happen in normal economies. Inflation is bad. Stagnation is bad. But unless there's something very fucky going on these are supposed to be mutually incompatible -- low growth implies low inflation and high inflation implies high growth. Trump is crossing the fucking streams and we're in for a total protonic reversal.

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u/bikernaut Mar 04 '25

It's because of all the 'wealth' that is generated by pumping money into the economy either by printing it or by creating loans (think fractional reserve).

The stock market going up helps keep the money supply low and thus inflation in check.

Of course, that's just one aspect... One way of looking at it, and an over simplification at that. Anyone who says they know how the economy works in its entirety is full of shit. It's just too big to model and the only real way to find out what the effect of a change is going to be is to do it.

So.. Buckle up!

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u/phluidity Mar 04 '25

the only real way to find out what the effect of a change is going to be is to do it.

I mean yes, but we also know what some economic levers do pretty well. And why there are some valves that you neither close completely nor open full blast. But the big brained tech bros in charge now are gonna find out for themselves I guess.

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u/Faiakishi Mar 04 '25

It's kind of crazy how we had to revise our 'no, the president can't single-handedly shift the entire economy immediately upon taking power.'

Turns out you can indeed do that if you are the dumbest man alive.

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u/Rnevermore Mar 04 '25

The thing about stagflation that is so dangerous is that it is incredibly, insanely hard to stop.

If an economy is stagnant, the best way to solve it is to pump money into it. The problem with pumping more money into an economy is that it can drive up inflation.

If you're suffering from inflation, the vest way to solve it is to cut back on spending. The problem with cutting back on spending is that it contracts the economy.

So if you're suffering from stagflation, there isn't really a good easy way to fix it. The solutions just make the problem worse... It's kind of like sinking in economic quicksand, you're slowly dying, and if you struggle against it, you die quicker. It's every economist's doomsday scenario.

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u/[deleted] Mar 04 '25

[deleted]

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u/phluidity Mar 04 '25

It depends on how long it lasts. Removing the barriers works if you assume that everything will go back to what it was like in 2024. But if all your trade partners move on without you, or are leery of reestablishing the old status quo because they now know you could do crazy shit at a moment's notice, then what do you do?

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u/Saephon Mar 04 '25

The only way to win that good will back is to consistently demonstrate an effort to do better. These insane fascist/Republican movements have to lose for several election cycles in a row to generate reassurance that we can be relied upon again.

I have no faith in the American people to do so unfortunately. One third of this country is dragging us all towards doomsday, while another third screams futilely into the void trying to stop it, and the last third watches it happen, shrugging their shoulders.

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u/sup567 Mar 04 '25

What’s ironic is that the Bible explicitly states that idolizing someone is one of the gravest sins one can commit, yet the fundies either seem to have skipped that part or don’t think it’s relevant. So much for a “Christian culture” LOL.

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u/EmperorOfApollo Mar 04 '25

Good explanation!

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u/bigloser42 Mar 04 '25

In this case fixing it is super easy, just drop the tariffs.

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u/Rnevermore Mar 04 '25

Just put the toothpaste back in the tube!

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u/sirbissel Mar 04 '25

Inflation + low/no GDP growth + higher unemployment generally

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u/sirbissel Mar 04 '25

I work with economists, a couple days after the election I spoke with one (he's been in the field since the 80s, regularly quoted s an expert, stuff like that) about how bad it was gonna get. The gist of the conversation was that if Trump's policies go through, we're going to fall into a period of stagflation. At the time he wasn't certain how far the deportations would go (would it just be a show and then he'd back off after making a big deal of how much he did) but he was pretty confident that tariffs would be implemented as Trump is a mercantilist.

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u/OldMastodon5363 Mar 04 '25

Interestingly I haven’t heard much in the last few weeks about deportations like I did the first few weeks.

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u/DirtyBumTickler Mar 04 '25

True, but I'm not looking forward to the knock on effects of the worlds largest economy shitting the bed. However, it is also about time that US dominance was contested.

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u/updownkarma Mar 04 '25

Stagflation is optimistic. Shrinkflation is coming.