In December of 2016 when we discussed the possibility of President Trump’s then new and unique tariff approach, we predicted negligible impact – if any at all.  It was a theory at the time, but predicated on the looming possibility that impacted nations would inevitably devalue their currency. It was the currency devaluation, in combination with directed subsidies, that would offset any tariff impact to U.S. consumers.

By the time we got to December 2019, we were no longer discussing theory.  Deflation due to currency devaluation, subsidy and a rising dollar actually became reality.  The lookback data (2017 through 2019) proved the tariffs did not raise prices. In fact, the opposite happened, we were importing broad-based deflation.

Now it’s 2025 and again China is hit with tariffs, along with Canada and Mexico.  With history as a reference, watch the Canadian Dollar and the Mexican Peso.  Initial impact shows the same thing repeating again. The U.S. dollar is rising in value, and the Canadian dollar is dropping quickly.

If this trend holds, the 25% tariffs against Canada (and Mexico) will have minimal impact, if any at all.  The lowered value Canadian dollar and Mexican peso will work as an offset and imports will be paid with higher value dollars.  Depending on the scale of what happens in the next few weeks, there is a strong possibility Canada might have just walked into a trap set by Trump.

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President Trump has triggered punitive tariffs against Canada, Mexico and China for their role in the manufacture and delivery of fentanyl into the United States while disregarding their responsibility to secure the U.S. border.

In response, Canadian Prime Minister Justin Trudeau announced responsive tariffs against American goods.  However, the responsive tariffs are primarily the products that Canada has exploited through the Free Trade Agreement (FTA) loophole.

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It is obvious Canada’s response is in consultation with the U.S. democrats, as is the customary norm for the Trudeau administration.

(Politico) – Canada’s prime minister, Justin Trudeau, on Saturday night made a televised address announcing concrete measures including a tit-for-tat 25% tariff phased in across C$155bn ($107bn) worth of American products. Trudeau said Trump had put at risk US consumers’ and industries’ access to much-needed Canadian critical minerals and resources including oil, energy and timber. The prime minister promised to work with Canada’s provinces to review dealings with the United States.

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President Trump signs a batch of Executive Orders and takes questions from the assembled press pool in the oval office.

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This is excellent news.  There are two distinctively different sets of tariffs scheduled to roll out in the next few days, weeks and months.

One set of long-term tariffs called MACRO tariffs focused on reciprocity and based primarily on economic fairness.  The second and more urgent set, are focused on the immediacy of national security, border security and the demand for allies to shut down their support for fentanyl distribution.

The Border Security tariffs of 25% against Mexico and Canada start on Saturday.  The media and corporate interests in/around Wall Street are in maximum apoplexy mode; however, Commerce Secretary Howard Lutnik previously explained the reason for the urgency.  The video is 5 minutes and well worth your time if you want to avoid the confusion being pushed by media. WATCH:

WASHINGTON – President Donald Trump on Thursday said he will impose 25 percent tariffs on Canada and Mexico beginning Saturday, reiterating concerns about illegal migration, fentanyl and trade deficits in remarks to reporters.

“I’ll be putting the tariff of 25 percent on Canada, and separately, 25 percent on Mexico, and we’ll really have to do that,” Trump told reporters while signing executive orders focused on aviation safety.

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Within this example the American people not only see the deliberate nature of President Trump’s intent to carry out America-First policy, we are also getting an unmistakable confirmation of how our government could have previously stopped all of the bad activity in the past.

Using economic influence as a national security strategy, President Trump responded to the repatriation denials of the Colombian president with focus and the benefit of very fortuitous timing. With Valentines Day only two-weeks away, and with all floral contracts with Colombian growers previously locked in, any tariff, inspection delay or import embargo would have destroyed their industry.

President Gustavo Petro was facing an immediate 25 percent tariff on all goods imported from Colombia, visa restrictions, a travel ban, enhanced border patrol inspections and financial sanctions. Petro conceded to Trump’s responsive terms within hours, even retweeting the message from Press Secretary Karoline Leavitt.

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In addition to all other notes evident in this example, all other national leaders are now on notice about what will happen if they refuse repatriation of illegal aliens.  #FAFO

Secretary of State Marco Rubio will be well received in his previously scheduled upcoming visits.

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Today at 10:30am former North Dakota Governor Doug Burgum will appear before the Senate Energy Committee as part of his confirmation process for Interior Secretary.  Livestream Links Below: 

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Aligning with the concept of using tariffs to fund government operations, President Trump has announced his intention to create the External Revenue Service.  It appears to be a collection and enforcement mechanism to gather income from tariffs, duties and other sources that will pay for access to the U.S. consumer market.

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One of the issues the External Revenue Service will likely address is the de minimis loophole.

The de minimis loophole comes from back in the 1930s. The idea back then was, say you went on a vacation to Paris, you shouldn’t have to file customs paperwork or pay taxes if you decided to ship some little Eiffel Tower statues to your friends back home.

Congress in 2015 then raised the de minimis threshold from $200 to $800.  However, the e-commerce world exploded, and Chinese companies began using the de minimis loophole to ship cheap goods (ex. Temu and Shein) into the USA direct to consumers without paying any customs duty.

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Senator Eric Schmitt (R-MO) appears on Fox News to discuss H1B visas and the inherent fraudulent use of the system by companies trying to cut costs and avoid hiring American workers.

Schmitt says H1-B visas are being “abused” in the U.S. and argues that many American workers are being forced to “train their replacements.” WATCH:

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Treasury Secretary Janet Yellen has announced the U.S. debt ceiling is likely to be reached mid-January, while Joe Biden is still in office.  President Trump tells congress to deal with the issue now.

First, here’s Secretary Yellen:

WASHINGTON, Dec 27 (Reuters) – The U.S. Treasury Department may need to take “extraordinary measures” by as early as Jan. 14 to prevent the United States from defaulting on its debt, Treasury Secretary Janet Yellen told lawmakers in a letter on Friday.

Yellen urged lawmakers in the U.S. Congress to act “to protect the full faith and credit of the United States.”

U.S. debt is expected to decrease by about $54 billion on Jan. 2 “due to a scheduled redemption of nonmarketable securities held by a federal trust fund associated with Medicare payments,” she added.

She said: “Treasury currently expects to reach the new limit between January 14 and January 23, at which time it will be necessary for Treasury to start taking extraordinary measures.”

Under a 2023 budget deal, Congress suspended the debt ceiling until Jan. 1, 2025. The U.S. Treasury will be able to pay its bills for several more months, but Congress will have to address the issue at some point next year. (more)

The Biden spending is already baked into the proverbial cake. Congress will have to raise the debt ceiling limit and President Trump is urging them to do it now, before he takes office.

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When I read the New York Post article proclaiming that President Trump supports the fraudulent system known as H1B visa hiring, I knew something was amiss because we previously looked at Trump’s various business hires and use of the visa process.

Apparently, the NY Post called President Trump to get him to weigh in on the controversial subject that has been triggered by Elon Musk saying he would “go to war on this issue” to maintain the H1B visa system -and subsequent foreign employment for tech skilled workers- his various companies depend upon.

Here’s the topline takeaway from the article that has triggered many:

(NY POST) President-elect Trump told The Post Saturday he supports immigration visas for highly skilled workers, appearing to side with Elon Musk in the roiling intra-MAGA debate on the issue.

“I’ve always liked the visas, I have always been in favor of the visas. That’s why we have them,” Trump said by phone, referring to the H-1B program, which permits companies to hire foreign workers in specialty occupations.  

“I have many H-1B visas on my properties. I’ve been a believer in H-1B. I have used it many times. It’s a great program,” added Trump, who restricted access to foreign worker visas in his first administration and has been critical of the program in the past. (more)

However, if you go to the Dept of Labor website, search or download the database of H1B employment, specifically filtering to Trump’s various companies, what you will discover is that Trump Inc doesn’t use the H1B visa system at all. [Check for Yourself Here]

How does this reconcile? Well, having previously looked at the visa use by President Trump in his various companies {SEE HERE}, I can confidently assert (Occam’s Razor) that within the interview President Trump conflated H2B temporary worker visas, which he does use in his service industry, with H1B visas which he does not use.

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