 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 | | |  | Donald Trump's latest tariff threat comes due this week. (Evan Vucci/Associated Press) | | | It's going to be another weird week, so hold onto your hats. If you've had a hard time keeping track of all the various tariff threats and deadlines, you are not alone.
My colleague Alex Panetta has a handy guide for what threats come due on what dates here.
This week, we face the first hurdle. U.S. President Donald Trump has threatened to impose 25 per cent tariffs on all Canadian goods (including a 10 per cent tariff on oil).
These are the tariffs threatened over what Trump calls the "situation" at the border with fentanyl smuggling.
They were initially going to be imposed Jan. 20, then Feb. 1, which became Feb. 4 and eventually March 4.
Tariffs on steel and aluminum (25 per cent) are scheduled to be imposed on March 12.
On April 1, a whole array of reports and studies are set to be completed, which may lead to yet more threats or tariffs.
And on April 2, Trump has said he will impose a 25 per cent tariff on imports of pharmaceuticals, semiconductors and auto imports.
Plenty of experts have said the deadlines this week (and next) are most likely going to be pushed back again.
But last week's trade numbers in the U.S. show American importers aren't waiting. | | |  | | | | | The same thing happened in 2018, when Trump imposed tariffs on steel and aluminum. Importers tried to stock up as best they could before tariffs kicked in.
Then imports declined sharply, only to rebound when the tariffs were lifted a year later.
This time, economists are trying to figure out what the impact will be.
It's not an easy job. Do you add up all those tariffs?
Twenty-five per cent on everything, plus 25 per cent on steel and aluminum, plus 25 per cent on cars and pharma? That's... well, that's a lot.
Tariffs also have a weird impact on data. They drive up prices in the short term. But as demand falls and output shrinks, they also drive down prices.
In a speech in Mississauga last month, Bank of Canada governor Tiff Macklem said without tariffs, the Canadian economy is forecast to grow about 1.8 per cent in both 2025 and 2026.
"But in the tariff scenario, the level of Canadian output falls almost three per cent over two years. That implies tariffs would all but wipe out growth in the economy for those two years," said Macklem.
Randall Bartlett, deputy chief economist at Desjardins, shows what the potential downside would look like. |  | | | That chart comes from a good report Bartlett and his team put out last week.
All this to say, it's going to be another breathless week and it will set up more whirlwind weeks ahead.
So brace yourselves. I'm down in Washington for the week and our team will be updating on CBC TV, Radio and online all week.
So stay tuned.
What do you think will happen?
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forwarded to you. | | |  | | The next deadline for Donald Trump's threatened tariffs comes on Tuesday. There's another deadline of March 12 for steel and aluminum tariffs and more reports coming in April. | | | | | | We will get the latest balance of trade numbers on Thursday. These will lay out how much Canada imports and how much Canadian businesses export. The trade deficit with the U.S. is a key point of contention with the Trump administration. | | | | | | Canada's job growth will return to the spotlight this Friday. Economists believe Canadian employers added about 60,000 jobs last month. | | | | | Three things to read, watch and listen to this week | | |  | Mar-a-Lago is the golf club, home and centre of political gravity for Trump's administration. (Carolyn Kaster/Associated Press) | | | 1. What is the Mar-A-Lago Accord? | | | There's an idea floating around Wall Street these days based on something called The Mar-A-Lago Accord.
The idea is not fully formed and depending on who you ask, it may mean different things. Its proponents say it follows in the footsteps of the Bretton Woods Agreement, which shaped the global economy after the Second World War.
The basic idea of the Mar-A-Lago Accord is that the centre of U.S. political power lies in the private gold club owned by the American president.
And from Mar-a-Lago, people close to the Trump administration are talking about a new deal that would encompass foreign policy, sweeping debt restructuring and a conscious effort to devalue the American dollar.
Put simply, the idea is to dramatically restructure how America does business with the world. That is as much about restructuring American debt as it is about tariffs. It's about weakening the U.S. dollar to bring down borrowing costs.
On this episode of the Bloomberg podcast Odd Lots, hosts Tracy Alloway and Joe Weisenthal speak with Jim Bianco, president and founder of Bianco Research, who has been briefing his clients about the possibilities of the Mar-A-Lago Accord.
"You have to start thinking big and you have to start thinking bold about what is going on here," Bianco said.
He doesn't think the idea is imminent (or even necessarily possible), but he does think it's a sign of how radically the Trump administration is thinking.
"The dollar has been holding back manufacturing in the U.S., trade in the U.S. It's been this trade-weighted dollar that's been getting stronger and stronger and stronger," he said.
Bianco says there are two measures of the U.S. dollar's strengths. The most common one weighs it against a basket of global economies (mostly European). By that measure, the U.S. dollar is down five per cent over the last 40 years.
But the Federal Reserve also looks at something called the trade-weighted dollar, which compares the exchange rate against the currencies the U.S. does the most trade with (26 countries, but the big two currencies are Canada and Mexico's).
That trade-weighted dollar is up 218 per cent over the past 40 years.
Bianco says the idea here is bigger than just the dollar or even just the $36 trillion US in debt.
"If you want to talk about bringing the dollar down, dealing with the deficit, dealing with the amount of debt in the United States, they're all inter-related — if you fix one, you fix the others," said Bianco. "They all are part of a larger whole and that's what I think the idea of the Mar-A-Lago Accord is."
Check out the Odd Lots podcast on the Mar-a-Lago Accord here. | | | 2. History corner | | | I wrote a couple of weeks ago about the last time the U.S tried to invade Canada — during the war of 1812, and how the soon-to-be-Canadian troops marched south to Washington and set the White House ablaze.
Well, if you liked that, have I got a podcast episode for you.
History Hit with Dan Snow is a fantastic show and always a good listen. Dan Snow is the English son of former CBC journalist Ann MacMillan, so we can claim at least half of him.
In this episode, he explores the long and tumultuous history of the times the U.S. has tried to make Canada a state.
We all know about the War of 1812.
But Snow reminds us that was hardly the first attempt.
The first came before the United States was even a state. During the early days of the Revolutionary War, a force led by Benedict Arnold captured the key Fort Ticonderoga in what is now New York.
From there, the rebelling colonialists had an idea of attacking British strongholds in Quebec. They figured they could knock out the British holdings, which would put more pressure on the empire and perhaps hasten a peace treaty.
Quebec City was in their sights. There weren't a lot of soldiers there. Arnold and the Americans figured "it would be easy," said Snow.
One thrust went north and captured Montreal. The other moved through the dense woods from Boston, through Maine, and up toward Quebec City.
"So really, the first great offensive military operation in the history of the American republic, in the history of the U.S. military, is an invasion of Canada," said Snow.
Everything was going swimmingly. Until it wasn't.
On New Year's Eve 1775, the two thrusts joined up and launched an attack on the old walled city. They wore paper banners in their hats that read "liberty or death."
"This was the moment when Trump's dream of Canadian statehood probably came as close as it's ever been," said Snow.
"They were metres away from the walls, the most significant British stronghold in Canada, the loss of which would see their little forts and garrisons cut off from British support across the Atlantic and forced to surrender. This was the battle for Canada," said Snow.
But as close as they came, the Americans were smashed upon the walls of Quebec City.
Half the force was killed or captured.
"This tiny force now attempted to besiege Quebec. The British apparently sent out sex workers who they knew had smallpox," said Snow.
By the spring, British reinforcements flooded into the area and what few Americans who survived retreated to New England.
Snow also tells the story of some of the battles of 1812 and 1813. He goes through the various border disputes between Canada and the U.S. and the election of 1911, which debated economic ties to the United States and how Canadians were upset some tariffs were.... removed.
Smart, interesting, timely. Give it a listen.
Listen to History Hit with Dan Snow. | | | 3. How to fix the housing crisis | | | The list of things that need tending to right now is long. Our biggest trading partner is suddenly doing its level best to weaken our economy, productivity is at crisis levels, growth was already weak and the lingering impacts of inflation have stretched wallets across the country.
But ask anyone what their biggest concerns are, and the issue of housing will be near the top of the list.
Everybody I know has written one of those "10 ways to fix the housing crisis" pieces. I even wrote a couple.
None of them hold a candle to a piece by the Missing Middle Initiative.
This newsletter and podcast is put together by economist and housing researcher Mike Moffatt, producer Meredith Martin and journalist Cara Stern.
The piece lays out precisely what it costs to build a home.
Then it offers 10 pathways to fix the problem. I could probably just list all of them here. But you'd be better off reading the piece yourself
They range from the obvious but difficult, with ideas like "raising middle-class wages" to "lowering government taxes and fees."
Yes, there is a difference between pathways and policies, but you need to articulate the outcome if you want to build a policy that works.
"Construction-related taxes can account for over 30 per cent of the cost of some projects. Reforming development charges and the other alphabet soup of municipal housing construction taxes is massively overdue," writes the Missing Middle Initiative team.
I also really like when pieces like this flag a problem and make it clear they don't know the exact way to solve it.
"Banks require a certain gross profit margin before they will finance a project. We are unsure if there are any policies the government could enact that could lower this rate without unduly adding risk to the system, but as we have said a few times in this piece already, it is worth studying," they write.
This is smart and the kind of article I print up and keep handy, as I know I'll reference it often in the months ahead. You should, too.
Check out the Missing Middle Initiative's piece here. | | | How the economy looks beyond Bay Street | | | GDP update | | | I'm trying to use this space to follow up on data points from the week before. Many of you have flagged that we discuss what's coming and what to watch for, but don't always say what ended up happening.
So last week we were looking at GDP and how Canada didn't have a lot of economic cushion heading into a potential trade war. We also flagged that per capita GDP was likely going to start turning a corner soon (if only because population growth was cooling).
Well, the latest numbers were released on Friday and came in much stronger than expected. | | |  | The per capita measure also came in stronger than expected. Statistics Canada also revised its figures for Q2 and Q3 (April, May and June as well as July, August and September).
Those revisions showed Q2 per capita GDP growth actually dipped back into positive territory for the first time since January of 2023. And the year ended on another (slightly) positive note.
On a per capita basis, GDP rose 0.2 per cent in October, November and December. It's a start.
But there's a lot to undo still. For the full year of 2024, per capita GDP was down a whopping 1.4 per cent.
What do you think?
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