By Michael O’Neill
He’s Baaack! If you weren’t a fan the first time around, brace yourself for the 2024 version of Donald J. Trump. Despite Kamala Harris’s best efforts—and a mainstream media determined to frame the presidential race as neck-and-neck—Trump’s return to the White House was a landslide. And he knows it.
The Phoenix Rises
On January 20, 2025, Donald Trump rises from the proverbial ashes, becoming the 47th President of the United States, and he will be breathing fire. One of his first acts in office will be to pardon himself for all his previous convictions. Prior to that date, on November 26, he is supposed to be sentenced for his 34-count convictions over payments to an escort. You can rest assured that the sentencing hearing will be delayed and then… become unnecessary.
The world as you know it has changed, and so has the world of Special Counsel Jack Smith. He is the guy leading two criminal investigations against Trump, and he is the guy Trump promised to fire “within two seconds” of taking office. In addition, more than a few Trump cronies and January 6 rioters who are serving time in prison are counting the days until they are pardoned.
Russian President Vladimir Putin can hardly wait until January 20, after Trump said he could end the Russia-Ukraine war in one day. In 2022 Trump claimed Putin was a “genius” and “savvy” for invading Ukraine, and if you believe Pulitzer Prize-winning author Bob Woodward, he claims Trump and Putin are phone pals.
Tariffs are a president’s best friend, especially one named Donnie. Mr. Trump promised a 10% tariff on all imported goods – everything, with Mexico and China being singled out for special attention. Mexican imports face a 25% surcharge, while Chinese goods could be hit with a 60% to 100% levy. And he never said a word about exempting Canada, even after Justin Trudeau’s fawning congratulatory call to Trump, when he said, “The friendship between Canada and the U.S. is the envy of the world. I know President Trump and I will work together to create more opportunity, prosperity, and security for both of our nations.”
Trump is not a Trudeau Fan
Trump is not a fan of Prime Minister Justin Trudeau, and Canadians will be the worse for it. At various times he described Trudeau as weak and two-faced. He also supported the anti-government Freedom Convoy, saying, “The Freedom Convoy is peacefully protesting the harsh policies of far-left lunatic Justin Trudeau who has destroyed Canada with insane Covid mandates.” He even spreads false stories that Fidel Castro is his real father. That is hardly the demeanor of a man who will go out of his way to help Canada.
Climate Change Causes a Chill
Climate change zealots are extremely unhappy, and Canada’s Environment Minister Steven Guilbeault is the unhappiest. The self-proclaimed “saviour of the world” was feeling pretty smug after he announced plans to eradicate Canada’s oil and gas sector. He decided that forcing energy producers to reduce carbon emissions by 33% less than the 2019 target was necessary because the industry needed to do its fair share to reduce greenhouse gas emissions. He says the reductions will contribute directly to a cleaner, safer environment and good jobs for future generations. He does not care that Canada is a resource-based economy, and without our resources, we have no economy.
Guilbeault is looking even more foolish as Donald Trump is expected to undo many of America’s national climate change policies. FOX News 40 wrote: Trump has summed up his energy policy as “drill, baby, drill” and pledged to dismantle what he calls Democrats’ “green new scam” in favor of boosting production of fossil fuels such as oil, natural gas, and coal, the main causes of climate change. The U.S. will be boosting fossil fuel production despite already being one of the highest greenhouse gas emitters, while Canada attempts to kill its energy industry despite having low greenhouse gas emissions by area.
It’s Lights Out for the Loonie
What is there to like about the Canadian dollar? Well, it isn’t the Mexican peso, but that’s about it.
• The Canadian economy is heavily reliant on resource and auto industry exports to the U.S. Steven Guilbeault and Trump’s promise of 10% import tariffs ensure those exports may decline, and if Trump gets his way, auto suppliers may relocate to the U.S.
• Canada/U.S. interest rate differentials have widened sharply. The CAD/U.S. 10-year yield spread is -108 bps in favor of the greenback. It could get worse if U.S. inflation risks return, which forces the Fed to delay rate cuts, while the Bank of Canada keeps cutting domestic rates.
Those two factors are the reason why the loonie is the tetherball that may be whacked unmercifully by the return of Donald Trump to the Oval Office.
