 Welcome to Mind Your Business ! Consider this your weekly guide to understanding what’s happening in the worlds of economics, business and finance. By Peter Armstrong
|  | Pressure is mounting on the federal government to get something done. (Natanael Ginting/Shutterstock) | | | The trade war with the U.S. and the damage it's doing to the Canadian economy is becoming clear. We have heard from businesses big and small across the country that have seen a dropoff in demand.
They've told us how the uncertainty has weighed on their businesses. Economists have said the uncertainty alone will weaken the Canadian economy, and many believe Canada has already started to slip into a recession.
But until now, we hadn't seen that weakness show up in the data.
Last week, we saw the first measurable signs of damage.
Exports collapsed in April. The trade deficit climbed to a record-high $7.1 billion.
We all knew this was coming. Almost immediately since he was elected president, Donald Trump has been threatening the Canadian economy.
We have heard a lot about what Canada could do to offset the tariffs. We could knock down internal trade barriers; we could increase our exports to the rest of the world.
But in the seven months since Trump was elected, Canada hasn't done a whole lot.
Much of that can be explained. The former prime minister resigned, the Liberal Party held a leadership contest, then there was an election.
But now, we are starting to see some action. The first glimpse came in those export numbers released last week.
We saw a small, but measurable uptick in exports to countries other than the United States. | | |  | | | | | Yes, that's a tiny increase.
But it's a sign Canadian companies are looking at expanding into other markets.
Then on Friday we got the first batch of legislation that would give the federal government a way to spur growth in specific industries, through specific projects.
In theory, that addresses what have historically been some of the biggest obstacles to growth. One streamlined process to get selected projects completed. The removal of barriers to inter-provincial trade will spur growth in its own right.
With two key domestic balls rolling, the federal government will turn its attention to preparations for the G7 Summit in Alberta, which starts on Sunday.
Prime Minister Carney invited Indian Prime Minister Narendra Modi to the summit. Mexican President Claudia Sheinbaum has also been invited (though she has not yet said whether she will join).
And CBC News reported last week that Carney has had a series of conversations with the U.S. after his meeting with Trump in Washington.
Remember, Trump promised a series of deals within "days" when he was elected. At some point, the pressure to actually complete one of those deals will come to a head. |  | | | I know this feels a little all over the place, but I think there are a handful of threads that could well come together at the G7.
Last week's export numbers are a stark reminder that time is not in Canada's favour. All those stories we have heard about business slowdowns and drop-offs in demand are real.
They're only starting to show up in the official data; none of the trendlines are particularly good right now. Unless we see some real action soon, they're only going to get worse.
What do you think will happen? Email me at peterarmstrong@cbc.ca
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forwarded to you. | | |  | | The G7 Leaders' Summit kicks off in Kananaskis, Alta., this week. Leaders will begin arriving on Sunday. | | | | | | We will get a look at the latest inflation numbers out of the U.S. this week. CPI data will be released on Wednesday. (Canada's numbers follow on June 24.) | | | | | | We will get a look at the state of Canada's manufacturing sector on Friday. Statistics Canada will publish both manufacturing sales and wholesale sales figures for April. | | | | | Three things to read, watch and listen to this week | | |  | Donald Trump and Elon Musk's relationship imploded last week. (Kevin Dietsch/Getty Images) | | | 1. The big breakup | | | The implosion of the relationship between Donald Trump and Elon Musk has been eye-popping.
It is the ultimate intersection between business and politics. The richest man in the world knocking heads with the most powerful man in the world.
They say you should never pick a fight with someone who buys in by the barrel. But surely there's also some wise old saying about not picking a fight with someone who controls an arsenal of nuclear weapons.
Whenever I want to understand the goings-on of a tech company or magnate, I turn to the one and only Kara Swisher.
She and podcast co-host Scott Galloway have been longstanding critics of Musk. And Swisher called this breakup months ago, saying two men with such giant egos would eventually clash and the relationship would fall apart.
In this episode of their podcast Pivot, they skip the victory lap and get straight to a debate over who loses more as the relationship crumbles.
Galloway began by pointing out that Tesla's stock took a giant hit as the public feud began to play out. Tesla and other Musk companies like SpaceX and Starlink are reliant on government contracts (and in the case of Tesla, government subsidies).
But Swisher says Musk has shown time after time that he's willing to go further than anyone else.
"Elon is willing to go nuclear," said Swisher.
More to the point, she says other business leaders are watching this closely.
"CEOs all want to say this to Trump. They want to stop being pushed around. If [Musk] is doing it, it will give permission to everyone else to start pushing back on Trump."
Galloway, however, says those same CEOs will see the damage to Tesla's stock as a cautionary tale.
"I think every CEO looks at a 14 per cent decline in the stock in one day and thinks, I don't control my board, I can get fired for this shit. I mean, Tesla shed $150 billion [US] in value."
Galloway says both Trump and Musk are petty and willing to go to great lengths to hurt the other. And on that front, Galloway says Trump has more ammunition.
In the end, the two hosts agree on one thing.
"This is bad for both of them," said Swisher.
Musk may throw money at next year's U.S. mid-terms. He may embolden other business leaders to speak out. None of that would help advance Trump's agenda.
Trump, in turn, could do damage to Musk's companies and turn his MAGA supporters on the mercurial business leader.
Either way, it's going to be fascinating to watch. As Wedbush Securities tech analyst Dan Ives told CNBC last week, "Get the popcorn out. I don't think we're done here."
Listen to the Pivot podcast here. | | | 2. A new Gilded Age? | | | Whenever a new president arrives in the Oval Office, they add some personal flourishes to the room. Art is switched out with subtle nods to history and ideology.
But shortly after Trump returned to the White House, reporters noticed he had added something else: gold. Lots and lots of gold.
"New gold vermeil figurines on the mantle and medallions on the fireplace, gold eagles on the side tables, gilded rococo mirrors on the doors, and, nestled in the pediments above the doorways, diminutive gold cherubs shipped in from Mar-a-Lago. Even the remote control for the television down the hall is wrapped in gilt," CNN reported.
Trump sees the use of gold as a symbol, a sort of throwback to his favourite era, the Gilded Age.
"We were actually probably wealthiest of any time, relatively speaking, at any point in the history of our country. In the 1890s, we were so wealthy," Trump said in one of many musings about what he sees as the peak of American prosperity.
That has prompted the good folk at The Indicator from Planet Money to do an excellent episode on whether we are entering a new Gilded Age.
The Gilded Age began around 1870, right after the end of the U.S. Civil War. The population nearly doubled in a short period of time. Industrialization had come to America. Factories were popping up everywhere. The railroad was connecting the country in ways and at speeds previously unimaginable.
"For the average American, the Gilded Age does produce a fair amount of wealth, a fair amount of, you know, upward mobility of what we now call the middle class does expand. But there are millions of Americans who are feeling left behind. And, you know, data shows that they're left behind," said Edward T. O'Donnell, a historian at the College of the Holy Cross in Massachusetts.
So, farm workers were moving to the city, the nature of work is changing. And as ever, change is hard.
"Farmers are losing money to new kinds of financial middlemen. Factory workers are exploited and subjected to dangerous working conditions. Conflicts between employers and unions were incredibly common and often turned violent," said co-host Adrian Ma.
But moments of change are also moments of opportunities. And much like today, some of the world's richest men were deeply involved in the politics of the day.
"Wealthy business tycoons were not shy about using their money to shape power in Washington. In 1896, the oil tycoon J.D. Rockefeller and the financier J.P. Morgan reportedly each spent a quarter million dollars to help elect William McKinley president," said co-host Darian Woods.
Wealth inequality shot up during this period. Back then, about half the country's wealth was held by the richest one per cent of Americans. Today, the one per cent hold about 30 per cent.
The show asked O'Donnell if that means we are currently in a sort of Gilded Age Lite.
"This Gilded Age is, in some ways, more severe than the first one, in terms of people's difficulty getting ahead," he said.
O'Donnell explained that as the U.S. economy expanded, whole new industries were opening up. Entire fields of work were invented, like travelling salesmen or pink-collar work for women who were starting to get office jobs.
"It's hard to see today new fields opening up like that, [which] provide people with better wages and better working conditions,' said O'Donnell.
I loved this episode and hope you do, too.
Check The Indicator from Planet Money here. | | | 3. Tech titans in a funhouse mirror | | | I'm going to watch the new movie Mountainhead this weekend. It's the send-up of today's corporate culture from the guy who created the hit show Succession.
Succession, of course, was the story of a media mogul and his dysfunctional family. It sparked worldwide conversation about where the characters in the show intersected with real-life people in the American media landscape.
So there was much anticipation and speculation about who would fall into writer Jesse Armstrong's crosshairs in his next project.
Writing in Esquire, Josh Rosenberg has the answer.
"In Mountainhead, the satirist takes aim at Elon Musk, Mark Zuckerberg, Peter Thiel, Sam Altman, and more."
Rosenberg offers a breakdown of which characters are based on which tech titans (no spoilers).
One of them, Venis, we are told is the richest man in the world. So, duh, you guessed it.
"As the richest man in the world in Mountainhead, Ven’s most obvious parallel is Elon Musk. For starters, the character is immediately in trouble in the beginning of the film for launching an untested AI tool on his social media platform, Traam," writes Rosenberg.
Steve Carrell plays someone with eerie similarities to Peter Thiel, the early Facebook investor. The character Jeff Abredazi, played by Ramy Youssef, seems at first to be based on OpenAI founder Sam Altman.
"However, as the film progresses, Jeff seems to grow a conscience about AI’s effect on the world. This switch more closely aligns his character with Dario Amodei. Amodei is the former VP of research at OpenAI, who left to form his own company, Anthropic, after he became worried about OpenAI’s lack of safety measures," writes Rosenberg.
The last character, Hugo "Souper" Van Yalk, seems to be the hardest to pin down.
"As the group’s only non-billionaire, Souper is the one hanger-on in Mountainhead. He’s incredibly envious of his friends’ success and is desperate to make his first billion dollars," writes Rosenberg.
There are a few real-life titans that may have inspired the role, but Rosenberg seems unsure.
Instead, he quotes Jesse Armstrong from an interview with Time magazine.
“For people who know the area well, it’s a little bit of a funhouse mirror, in that you see something and are convinced that it’s them,” Armstrong told Time. “It’s a good parlour game.”
Read Esquire's character breakdown here. | | | How the economy looks beyond Bay Street | | | Canada's jobs market remains remarkably resilient | | | Last week, we were talking about the state of Canada’s labour market.
At issue was whether (and when) the impact of the U.S. tariffs and ensuing uncertainty would start to show up in the data.
Mid-week, the export numbers we discussed above were the first official signal that what we were hearing from businesses was happening in large scale across the country.
So there was an expectation the jobs numbers would reflect the trend.
In the end, they did not. Canada actually added 8,800 jobs last month.
That’s much better than expected, but it still pushed the unemployment rate to a level we haven’t seen (outside of the COVID-19 pandemic) since 2016. | | |  | But if you look under the hood, the details are pretty lousy.
The manufacturing sector is really struggling and the overall job market is softening month by month.
“In little more than two years, the jobless rate has risen by 2 percentage points, as we have gone from a situation in 2022 and 2023 when it was difficult to find workers to, today, when it is difficult to find work,” wrote BMO’s chief economist Doug Porter.
What do you think?
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