Canada will match US tariffs 'dollar for dollar' as trade talks break down

US's largest trading partner is Mexico. The biggest thing we import from them is automobiles & auto-parts and the second largest is computers and electronics.

We all understand the benefits of trade is meant to bring in - such as goods manufactured by countries whose prowess making those goods better to the benefit of all.

So it's interesting to look at this example. Automobiles - does Mexico have a prowess in that segment? A tell tale sign of "no" is that Mexico has no domestic auto brand. In other words 100% of auto exports from Mexico is actually US automaker production that shifted to Mexico is persuit of cheaper labor, weaker unions, and less environmental and other regulations that gets in the way of manufacturing.

I am focusing on this example because it's the largest segment of our trade with our largest partner - literally the biggest thing the US imports is our own shifted auto production.

The second largest segment is also interesting. Mexico isn't known for its computer and electronics brands either. What's going on? Turns out that Asian manufacturers (eg Lenovo) do the very final assembly in Mexico but all the components come from Asia. It's not actually "efficient" to do this except that when assembly happens in Mexico those components magically become a "north American good" by NAFTA terms and can go all over US and Canada with no duties or tarrifs or restrictions.

So the second largest segment with our largest trading partner is Asian manufacturers exploiting a NAFTA loophole.

As an American who inherently is pro trade (I am an MBA...) this is revealing about the obvious disadvantages of how trade has been configured. The auto example is literally NAFTA being used to bypass American labor laws and environmental regulations while maintaining access to our market by American companies themselves. The electronics example is Asian companies bypassing the long standing trade conditions by whitewashing Asian products as north American goods.

It is obvious that trade pre-Trump was not set up in a smart way from American perspective. The auto is a great example: the government simultaneously made it very hard and expensive to manufacture at home, and very easy to shift to Mexico.

I don't know the details with Canada as much but I no longer assume things were working great and US is meddling lens by default.

Unfortunately, this couldn't be further from the truth:

https://cleantechnica.com/2026/07/12/head-of-iea-roasts-euro...

Here are some specific numbers:

https://ember-energy.org/app/uploads/2025/06/many-building-r...

The EU is heavily investing in renewables, but mainly to phase out coal rather than gas, and it's absolutely not electrifying its economy.

You can see this in the EU Emissions Trading System. It covers about 40% of all emissions, but leaves out buildings (dominated by gas) and transportation (dominated by oil). Since electricity is covered, it actually encourages oil and gas over electricity.

Furthermore, member states like Germany are resistant to taxing gas higher than electricity:

https://www.euronews.com/my-europe/2026/08/17/germany-warns-...

Despite the wars in Ukraine and Iran, gas is still encouraged over electricity in many European countries.

China and some other Asian countries have adopted the opposite approach. They aim to replace oil and gas by all possible means, including coal (although it's not the preferred choice).