We can argue all we want but the fact remains that Trump is doing what he campaigned on, trying to muster the best deals possible. Tariffs have been used to shelter local industries, keeping foreign competitors at bay. Unfortunately, times have changed and globalization has technically failed. These global supply chains have become so intertwined that if a disruption occurs, through any political or unexpected event, delays are often the result and production curtailed. 

Negotiations rather than retaliation need to be the method employed. This week, Trump doubled the tariffs on steel and aluminum to 50% from 25% with a stipulation that Canada reduce tariffs on dairy products from 390% and 250% respectively. Meanwhile, the Chinese have hit Canada with 100% tariffs on agricultural products that will be devastating to Canadian farmers, yet the Media is barking at Trump, looking for a trade war with our largest and most strategic ally.  

Consequently, Ontario threatened to cut electrical power from the grid and charge an additional 25% tariff. Of course, Ontario pulled back from its threat, seeking negotiations because it just isn’t feasible to get into a prolonged match of tit for tat confrontation. You got to know when to fold them, know when to walk away, then know when to run!

The reality of the overly exuberant Canadian job market has come to fruition as the Canadian economy only gained 1.1 thousand jobs in February. This was well short of the 20k expected, following a gain of 76 thousand in January. As I alluded to the previous week, with the example presented by Vince Gaetano from Owl Mortgage, the actual payroll rolls were more accurate than the bloated misrepresenting government statistics. 

This morning, the Bank of Canada (BOC) lowered the interest rate by 0.25% bringing the bank rate to (2.75%). There doesn’t seem to be any bluffing going on at the table. The ramifications are real and the hurt will be amplified. Be prepared for another round of economic chaos. 

The USD Index remains steady below the 104.0 level as inflationary fears are rekindled. Consequently, corporate profits could be squeezed as this economic transformation continues at light speed. The implementation needs to be done before the American Mid-terms. A positive tone and rebound seems to be occurring after Trillions of dollars were wiped off the balance sheets of stock exchanges around the world. Let’s hope cooler heads prevail and dialogue supersedes rhetoric. 

Precious Metals continue to maintain their lustre as inflationary pressures provide the fuel to their upward trajectory. Gold rises above the USD$2920/oz level and Silver above USD$33/oz. On the other hand, Oil climbs above the USD$67/B level and the CAD$ inches above the 0.69 cents mark, as Ontario pulls its threat as mentioned above.

Lastly, Bitcoin had a rough ride falling to the USD$76k/coin vicinity and now back around the USD$82k/coin level. 

The only thing we can control is the space around us and the interactions we maintain. Stand for what you believe, even if you stand alone and definitely, protect the cantina!