Like many others, I'm of the opinion that shit is about to hit the fan in terms of the economy. Too many alarm bells, too many attempts by the admin to cover up and distract from the pillars starting to show cracks.
I hope the recession ends up being smaller in length and magnitude than the 2008-2009 recession because that one wrecked an entire generation in terms of wealth and psychology.
From someone outside the US (Canada) and in a country that's been abused by its giant next-door neighbour -- longer than just the current, explicit abuse -- I kinda hope this recession is deep and hurts badly.
We've already seen some huge, positive structural changes to our economy and a down-and-out, bleeding US will have nothing but positive effects for the rest of us.
I'd have some sympathy but this is an entirely self-inflicted wound and Americans could collectively use a bit of humility.
At least in 2024, the US was the largest importer of Canadian exports, by a large margin.
If the US economy is in recession, it likely means less spending in general and so less spending on Canadian goods which is likely a problem for the Canadian economy. I'm sure there would be some benefits for Canada as well, but in a connected world economy, when one major country suffers, it's negative for most other countries.
That said, yeah it'd be nice if we (US) learned a lesson here, but we don't seem to be quick learners.
May as well hang a comment here, some blathering on a Canuck viewpoint, not directing this really at you toast0.
You're not wrong in who imports the most Canadian goods. Or on how we're all interconnected globally. But just for the record, if you take away oil, we import more from the US, than the US from Canada.
And our imports from the US are waaaay down. Funny thing, but when the US talks about annexing Canada, or applying tariffs until we "capitulate and join the US", we get a annoyed. Everywhere I go, especially for groceries, each price tag now has a Canadian or provincial flag on it. They didn't before, but they sure do now. And the outcome is obvious.
And really, it's buying from Canada or what... Middle East dictatorships? Or of course drilling more in US territory, which is fine, but hardly Canada's fault. And the funny thing is, we sell our oil at a massive discount to the US.
Like our copper. And iron. And 100 other things, all typically at a discount compared to world market pricing.
A funny thing has already started to happen, in fact the following video is 2 months old. Instead of trading with the US, and the US trading with the world? We're all just trading with each other instead. When this video was made, Canadian exports were up world wide, and down to the US. And overall?
Exports were just up.
Right now we're feeling some pain from recent tariffs on steel. But we'll just weather it, and bypass the US, like has happened with everything else:
I believe the end result is the rest of the world will just trade with each other, not with the US, resulting in little difference for everyone else. And disaster for the US. Long term of course.
The weirdest part of all of this is, the US specifically wanted more integration. Forced us to take on the FTA then NAFTA in the 80s and so on. Told us we'd be screwed if we didn't comply. And every year since, our real world earnings have gone down per capita, as the US absorbs us economically.
And then some guy shows up and tries to claim we're taking advantage. Huh?! What? You made us take on free trade, forced us to integrate economically, we were worse for it, but.. we're taking advantage??
We're basically more than happy to use these opportunities to cut financial ties with the US, because they current arrangement wasn't working out well anyhow.
That's great for you. We (US) messed up worse than I realized.
Your economy will clearly turn out better after this mess (perhaps already), which is great... neighbors helping neighbors and all that. (I don't think we can claim a 3d chess victory of helping the world economy by shooting ourselves in the foot though) I think you would still be better off when the US is not in recession though...
But our economy won't be better off. And even when we eventually return to sanity, we won't be able to return to where we were.
Maybe we can import ketchup and all dressed chips when relations normalize!
> And then some guy shows up and tries to claim we're taking advantage. Huh?! What? You made us take on free trade, forced us to integrate economically, we were worse for it, but.. we're taking advantage??
Yeah... the US clearly benefits from free trade and I don't understand how he thinks we're being taken advantage of by most countries. Like OK, maybe China but it's complicated. Blanket tarrifs are madness, especially when a lot of imports can't be sourced domestically.
I think the biggest issue is the rapidity of introduction, and secondarily, the 'on/off' nature of it. I'm sure it's been said to death, but stable means time to adapt and not random.
Picture Trump sitting in his office. A concerned, confused look is on his face. Clearly his mind is dwelling on an issue, a problem.
After a while, he picks up the phone and dials a number. The phone connects and a person wearing a headset, at a call centre answers.
"Support!", they say, "How may I help you?"
Trump replies "Hi. My tariffs aren't working. Can you tell me what's wrong?"
Support answers "Have you tried turning them off and on again?"
> We've already seen some huge, positive structural changes to our economy
None of this is good for working Canadians right now. The shit is about to hit the proverbial fan in this country in the next few months. And as bad as things might get in the US they're likely to be worse here.
Maybe in the long run we'll be on a stronger footing but it could also just lead to even more entrenched monopolies in the Canadian economy, and a victimized Canadian consumer.
China has many internal problems and is not looking for the world dominance, at least not in the medium term. It wants to continue building up its economy, not get involved in conflicts on the other side of the world. Rapid expansions lead to societal changes at home and is something China is really keen to avoid today. My 2c.
How does that square with belt and road? I would agree they aren't looking for world dominance, but from my POV they certainly are looking to be a more major player internationally. Especially in the '3rd world', they will likely end up with more influence than the US since we dropped USAID.
I see belt and road as orthogonal to the above. This is an initiative focused on a mix of PR and economy. While there are likely many layers of the intent behind it, I think the main one is to establish resource access as well as access to the markets for China exports and enable the stable growth of the Chinese economy.
The success of the initiative still remains to be seen: it is definitely not a failure, but many things can derail it, both inside and outside of China. In either case I see very little desire from the China to throw its non-economic might around outside of what they consider to be part of the Greater China territorial area (Taiwan, South China and Philippine seas). My 2c.
The US has the same demographic issue. Actually, every potential successor to US hegemony has the same issue. The only reason why it doesn't show up in the birth rates as bad here is because America takes in (or, used to take in) lots of immigrants from countries that still have babies.
China takes in immigrants in numbers so tiny they might as well not have an immigration program. Either Korea is an authoritarian nightmare no one wants to immigrate to. Europe, and to a lesser extent Japan, takes in immigrants, fails to integrate them, and then engenders a bunch of far-right nutjobs calling for revocation of citizenship and other Hitlerwords. As a double irony, those immigrant communities also trend far-right, and the argument between the two is just big and little endianism[0].
The US was special in that it was the world's "backup democracy". Nobody is equipped to replace it.
OK, but why doesn't China just fix the demographic issue instead of papering over it with immigration? Well, we already know the fix: uninvent birth control and trick horny kids into having lots of teen pregnancies. That's the circumstances of life in places with high fertility rates. Except that it unambiguously sucks to live life in a human breeding farm. Having a bunch of kids with absentee parents is extremely destabilizing to the social fabric of a country. That's the shit Nixon did to the Black community to spark a crime wave. That's why there's so many people emigrating from countries with high birth rates. And if you're thinking of further rules to prevent that, well, congratulations. You've just reinvented medieval Christian sexual mores.
The cure is worse than the disease.
[0] As in, the factions from Gullivers' Travels, not the byte order of CPUs
As a US citizen I wish Canada well. US needs serious competition and IMO the ideas of economic world group hugs, globalization benefiting everyone, etc. are no longer working. They may have been net positive initially, but are not anymore.
Unfortunately starting the rebalancing often requires a crisis. I hope the next one will lead to a world with several stronger, independent and competing clusters, not a weaker, beaten up version of the current setup.
What a vile response. I hope you feel some of the pain that you wish to dish out. There are a lot of us in the US who don't want this bullshit and haven't wanted it. A lot.
I am not as optimistic as the parent comment, about a US recession being of benefit to the rest of the world. I think we're all various degrees of fucked if it all falls apart, though it is probably true that other countries will benefit in the long run.
Many of our current problems stem from awful people never suffering any consequences for their actions that actively made the US a worse place for other people.
The US spent several months threatening to annex Canada. It's still threatening to annex Greenland AFAIK. Get your house in order before getting all triggered over people being upset about that.
The "but the blue states" line worked in the first Trump presidency.
Canadians aren't buying it now. The last election just made us shake our heads, and the crap that came after, the threats to us about which 90% of Americans treated as either "YEAH!" or "Oh, that's just trolling".
Just over the border outside of Buffalo I see red all over. Even the bluest of states like Vermont have areas that went Trump last election.
Sorry, it's just bleak to watch and when your nation makes war on our economy, there's no need for us to differentiate "baddies" from "goodies". We have no voice in your elections and we can't march on your streets to protest your broken regime.
But you do. Go fix it. So far I'm not impressed by the domestic opposition.
It's not just war on our economy. It's an attempt to steal our country from us. To take our homes, our nation away.
Repeated '51st state' blather. Threats of using tariffs until we capitulate and join. Talk of re-drawing the border because someone thinks it "looks weird". and stealing our land and water by force.
If someone wants to add tariffs to imports, it's silly, dumb, misguided, but well.. the US is free to do that. But try to take our identity away? Our home? Our nation.
This will not be put aside for decades
When you get stabbed by a random nutjob, it hurts, but whatever. When you get stabbed in the back by a friend, a brother? The hurt and pain is like a nova. It will never be forgiven, never put out of mind.
It feels like the US individual tax rates are on the left hand side of the larger curve especially for high earners. It’s especially to the left for estate taxes. If these were corrected to maximize revenue, I doubt we would have these gaps. Didn’t hear Elon proposing that.
The US has the most progressive income tax system in the developed world, and its middle and lower classes are probably the least taxed (due to the combination of the statement above and the lack of a VAT).
I'm not sure where this misconception comes from that the upper class of the US would be more highly taxed elsewhere, but it continues to pollute any attempts to have honest discussions about reform.
> I'm not sure where this misconception comes from that the upper class of the US would be more highly taxed elsewhere
In the relevant comparison cases, this does not appear to be a misconception.
I am not an expert in global taxation, and with the caveat that tax rates have many complications ... some quick research suggests the following:
A top-bracket earner from Texas would have a higher tax rate in 55 other countries, e.g. Aruba, Australia, Austria, Belarus, Belgium, Canada, Chile, China, Croatia, Czech Republic, DR Congo, Denmark, Finland, France, Germany, Greece, Greenland, Iceland, India, Ireland, Israel, Italy, Japan, Morocco, The Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Romania, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, United Kingdom, Zimbabwe. (I skipped some)
A top-bracket earner from California would have a higher tax rate in 11 other countries: Aruba, Austria, Belgium, Canada (the parts where people live), Denmark, Finland, France, Ireland, Japan, Portugal, Spain.
(You might argue that "upper class" does not include "earners", which would be a good way to be technically correct but would miss the point.)
Additionally, the capital gains rate is higher in 24 other countries, including most of the obvious ones.
And the top corporate tax rate is higher in 133 other countries.
Yes, most people are thinking about individuals in high income tax states because that's where most high earners live (CA, NY, MD, CT, NJ all come to mind immediately).
So we'll go with your CA example given the site we're on. Only 11 countries have a higher tax rate, and how much higher is it for them vs. how much higher it would be for the median income household in the state?
Also, that CA resident has to pay a 13.3% state capital gains tax, pushing it over 30% (in the best case) in total for high earners, which is higher that the vast majority of developed nations.
Corporate income taxes are a separate beast to some extend, but until recently the US had the second highest rate in the world.
I think you're right, unfortunately. Looking at the causes and the current actions of the US government (and, other governments worldwide tbh), this looks like an almost deliberate attempt to create a new class divide and supply of low-education workers. A depression would cement this. If you aren't already rich by the time it really kicks off, you probably won't make it out.
"Never attribute to malice that which is adequately explained by incompetence."
On the other hand, "Sufficiently advanced incompetence is indistinguishable from malice."
In the end, it doesn't matter whether these are incompetent or malicious people. These are people who are going to ruin a lot of lives around the world. The trick is, how do we get them out of power (in several countries) before they do too much damage?
So what's everyone think is a good place for their money to be?
I'm pretty vexxed by this question. To me it seems obvious that a lot of what is happening is going to hurt, both short term (tariffs) and long term (destruction of the US advantage in science), but markets have kept going up and up.
Something like the Frontier-3. Small cap value, long term treasuries, and gold. That portfolio does amazing at all time periods and still hit 10% a year in the lost decade after the 2000 crash.
> I hope the recession ends up being smaller in length and magnitude than the 2008-2009 recession
Not a chance. Were it just the tariffs, the recession would be quite small. The tariffs might even be cancelled if the SCOTUS remembers to do it's job.
But it's not just the tariffs.
The US economy is currently being kept afloat by AI R&D and infrastructure spending. It's stock market kept alive by 7 companies who are all neck deep in AI hype.
This not only disguises the malaise in the rest of the US economy, it's a bubble. Everyone knows it. Nvidia's the only one making any money and even they are now relying on vendor financing and other such red flags. Even one who believes that the technology of AI is here to stay, has to face the reality that it's not a golden goose of infinite dollar bills.
We're looking at something that's going to be at least as bad as the Dotcom crash. 'At least' because while the bubble is of only comparable size, other conditions are much worse.
Trump is trying to seize the fed. Big Tech is tearing the copper wiring out of it's own walls to keep AI going a little longer, and their plans for cutting costs is to dramatically increase H1Bs and outsourcing. (One wonders if there might be a non-economic reason behind this, given it's one specific country they're seeking to hire from >.>)
And underneath it all: A timebomb. Much, much, much more of consumer spending in 2025 is from pensioners than it was in 2000. When the stock market eats a 50% loss and stay there for a decade, those pensions will be cut dramatically. This drives down consumer spending, in turn driving down the stock market, a vicious cycle.
If 80% of postal traffic was commercial and just being used to not pay duty/tariffs, then the tariffs are achieving what was intended.
I don’t like the broad application of tariffs that is implemented today. They should have been better targeted. But this is one area where they are achieving what was intended.
Don't worry, it also hits birthday cards from my cousins, Christmas presents from my siblings, care packages with those favorite candies and coffees that aren't sold in the US. My sibling can't send me hand-knit items or hand-me-down kids items, items truly of de minimis monetary value.
It may be accomplishing what was intended -- but I don't think that people in the US (even those paying attention) understand what was intended. The lack of clarity in terms of regulations and collection of fees/tariffs show that it is not about efficiently collecting the $ but instead about breaking the chain of goods, from big business to small business to family ties, and cutting off flow to the USPS, supporting the privatization of the entity.
I agree that the de minimis exemption was being abused at scale.
I'm also salty that my family can't send birthday or Christmas presents, even a home-made card.
Whatever you want to say about this administration, always look one level down for the wholesale reconfiguration of supply chain and international connections that they're aiming for.
> It may be accomplishing what was intended -- but I don't think that people in the US (even those paying attention) understand what was intended.
this is what i suspect too. most of his common supporters i interact with parrot the “america first will revitalize the economy and job market” and then when that doesnt happen they do the same with “i’m willing to deal with temporary bit of pain in order to ensure american interests are protected.” these comments are almost always framed against the Obama and Biden administrations and never stand on their own merit (e.g. “unlike biden who …”).
to be perfectly fair, I’m not entirely sure what the ultimate goal is, though. My perception of the character of the person of the president has been dim for many decades so when it’s something that he champions I immediately chalk it up to something that would serve his own self interest above that of any group of other people
If all the systems were in place and working correctly then indeed there would be no effect, but the point of the article was that many countries have entirely suspended shipments because they have not got the relevant systems in place to handle the tariffs and regulations required.
It was used to buy stuff from abroad. Now, selling the stuff to USA requires the seller to pay US tax on behalf of the American citizen to US government and then take that tax back from the American citizen.
It is ridiculous. And also, if you are buying/selling low amounts and there is an intentional legal rule that says "small mounts are not taxed", then you are not avoiding anything nor using a loophole. You are legitimately buying a Canadian or Mexican item.
The purpose of de minimus is to streamline small shipments, commercial or not. It can't really be abused unless the declared value is false and it is really over $800.
If you are taking issue with Temu-like shipments, that is more of a postal treaty issue.
There is probably a subset of people here who ordered consumer goods from Alibaba or wherever but I literally couldn't tell you the last time I ordered something (directly) from somewhere international.
In think a lot of those good are simply not flowing anymore. Suddenly a bunch a products are from companies around the world are no longer viable to sell until current stock is purged and the price of everything goes up.
A lot of vendors are still locked in with pre-tarrif pricing to big box stores so all of them need to go bankrupt before the full price increase takes effect.
chaos and uncertainty are the result of what appears to be fundamental ignorance of how complex economic systems work. policies are being drafted and executed based on a cursory understanding of how things work, and undergirded by barely-suppressed racism.
A VAT is specifically designed to try and distort the market less (by taxing the value added at each step). With a tariff the whole point in the distortion, the goal is to make the imported goods less competitive.
It's long overdue. I'm not sure exactly how long bitcoin, tech stock speculation and private equity rollups were supposed to support an actual economy.
The question is whether you impose protectionism before or after you crater.
> I hope the recession ends up being smaller in length and magnitude than the 2008-2009 recession because that one wrecked an entire generation in terms of wealth and psychology.
It's going to be longer, and worse. Especially since there's no one in the ruling class that doesn't think that the way to get out of recessions is the massive-scale disinvestment that comes with austerity. We only got out of the last one because while America was preaching austerity, it was giving handouts to every wealthy person in America, while Europe was actually dumb enough to do austerity for real.
Upper-middle class people will be fine. During covid their wealth doubled through no particular effort of their own. It was just a gift from taxpayers to show them we love them.
I hope the recession ends up being smaller in length and magnitude than the 2008-2009 recession because that one wrecked an entire generation in terms of wealth and psychology.