Saturday, January 24, 2026

ATTENTION read all about it!!! Gas +$0.70? Canada JUST Joined China ($30B Pivot) | The Cost of Trump’s ...

Bloggers note : Carneys was short listed to head the IMF ...maybe Trump could wag the FEDERAL RESERVE SPOT  and get in out o his way  and clear the way for Poilievre   LOL.

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Jan 24, 2026
Gas +$0.70? Canada Just Joined China ($30B Pivot) | The Cost of Trump’s Trade War. Gas is up $0.70/gallon. New cars cost $3,000 more. Why? Because the trade war on the Northern Front just backfired. In early 2026, the White House issued an ultimatum to Canada: "Fix the border, or face the consequences." The result was a 25% tariff wall intended to protect America. Instead, it triggered an economic boomerang that is hitting every US household. But the price of gas is just the beginning. The real disaster is geopolitical. While Washington focused on the border, new Canadian Prime Minister Mark Carney executed a strategic pivot that no one expected: a $30 Billion partnership with China. In this 2026 Economic Audit, we expose: ▪️ The Energy Trap: Why US refineries in the Midwest physically cannot function without Canadian heavy crude, sending pump prices soaring. ▪️ The "Backdoor" to America: How Canada’s new deal allows Chinese EVs and lithium to bypass US sanctions. ▪️ The Supply Chain Crash: Why Ford and GM production lines are stalling (hint: parts cross the border 7 times). ▪️ The Fentanyl Pretext: The real political motivation behind the escalation. Is the US-Canada alliance over? 
 
TRANSCRIPT 
anuary 2026,
gasoline in the American Midwest has
risen by 70 cents per gallon since
March.
Automakers are shutting down production
lines due to a shortage of parts.
Industrial goods prices increased by
1.9%.
The trade war has already reached $30
billion.
But instead of capitulating, Canada did
something no one in Washington expected.
In this analysis, how did a fight over
fentinel transform into economic
selfmutilation?
Why could the fracture with Canada cost
the American economy more than a
confrontation with China? And is it true
that Beijing is no longer merely
circling Latin America, but has now
established a foothold directly above
us?
Let me be precise about what's at stake.
60% of our imported crude oil flows from
the north. That's Canadian heavy crude,
a specific grade our refineries were
built to process. A tariff on that crude
translates to 30 to 70 cents more at
every pump in the Midwest and Rocky
Mountain states. Every single gallon.
A single automotive part crosses the
Canada US border seven times before
final assembly. Seven times. Each
crossing now carries additional
friction, additional cost, additional
uncertainty.
The USMCA, the Continental Trade
Architecture that replaced NAFTA, faces
a mandatory joint review in July 2026.
If the three parties cannot agree to
extend it, we enter a decade of annual
reviews, then potential termination. The
single North American market could cease
to exist. And there's something else for
Donald Trump. Mark Carney presents a
more dangerous adversary than Justin
Trudeau ever did. Trudeau was an
ideologue. Carney is different. Mark
Carney is the former governor of the
Bank of England and the Bank of Canada.
He chaired the Financial Stability Board
during the global financial crisis. He
was on the short list to lead the
International Monetary Fund. This is a
man who understands central banking,
currency markets, and treasury
instruments at a level most politicians
cannot comprehend. Trudeau sent angry
tweets. Carney signs trade agreements
with Beijing.
When Washington imposed tariffs, Carney
didn't escalate rhetoric. He quietly
reminded markets that Canada holds
significant quantities of US Treasury
bonds. This is the banker's revenge.
Quiet, cold, and methodical. The
consequence that Washington failed to
anticipate. Instead of compliance,
Canada took offense. And in taking
offense, they shattered decades of
integrated defense planning, intelligent
sharing through five eyes, and the
foundational assumption of Fortress
America, that our northern flank was
secure. Block one, the energy trap.
Let me dismantle a myth that persists in
Washington.
The United States is not energy
independent. Not in any functional
sense. Yes, we are the world's largest
oil producer. We produce more crude than
Saudi Arabia, more than Russia. On
paper, we export more petroleum than we
import. But here's what the paper
doesn't tell you. American refineries,
particularly those in the Midwest and
Rocky Mountain regions, were designed,
engineered, and optimized over decades
to process a specific type of crude oil.
Heavy sour crude, dense, sulfurrich
petroleum that requires specialized
equipment to refine.
The oil we produce domestically, light,
sweet crude from the Peran basin and the
Bacan Formation, different chemistry,
different viscosity, different
processing requirements.
Our Midwest refineries import
approximately 4 million barrels per day
of Canadian heavy crude. That's 70% of
all the crude processed in that region.
The infrastructure, the pipelines flows
one direction, south. There is no
existing system to reverse that flow, no
mechanism to suddenly redirect Texas
crude to Minnesota refineries.
Could we rebuild? Could we reconfigure?
theoretically over years with billions
in capital expenditure while those
refineries sit idle. When the Trump
administration imposed a 10% tariff on
Canadian energy, the assumption was
straightforward. Canada needs us.
They'll absorb the cost. They'll comply.
The president even suggested that Canada
could become the 51st state to avoid
tariffs. A statement that played well
domestically but unified Canadian public
opinion against Washington more
effectively than any Ottawa politician
could have achieved. The assumption was
wrong. The Trans Mountain Expansion
Project, a pipeline from Alberta to the
Pacific coast, came online in May 2024.
For the first time in history, Canadian
crude has direct access to Asian
markets. In 2025, China purchased record
volumes of Canadian oil. Chinese
refineries like ours are configured for
heavy crude. The Canadians didn't absorb
the tariff. They found other buyers.
Now, examine the consequence for
American consumers. Midwest gasoline
prices rose between 30 and 70 cents per
gallon. Diesel for commercial trucking
followed. The cost of moving goods
across America increased. That increase
cascaded into consumer prices.
Everything from groceries to appliances.
Goldman Sachs estimated that a 10%
tariff on all US crude imports would
cost American households $22 billion
annually. That's $170 per household per
year before any escalation. And there's
a darker scenario. If Canada retaliates
by restricting energy exports, as Carney
has threatened, the United States would
experience a physical shortage of
diesel, not a price increase, a
shortage, commercial trucks idling,
supply chains breaking. The irony
requires emphasis. President Trump
promised Americans cheap energy. His
trade war with Canada has made filling
your tank more expensive. We cannot
replace Canadian heavy crude with
domestic light crude overnight. It is
technologically impossible. The pipeline
system runs the wrong direction. The
refineries process the wrong chemistry.
The timeline for conversion is measured
in years and billions. This is not
leverage. This is dependency. And we
revealed it.
Block two, the death of supply chains.
Consider the Ford F-S series pickup
truck. America's bestselling vehicle for
over four decades. The symbol of
American manufacturing.
This truck contains components sourced
from 24 nations. Thousands of individual
parts cross the Canada US border during
production. Engine blocks cast in Canada
return to Michigan for machining, then
cross back north for transmission
integration, then south again for final
assembly. Seven border crossings. Seven.
Under the USMCA, this flow operated
duty-free. The North American automotive
industry functioned as a single
integrated manufacturing system spanning
three countries. A tariff at any
crossing point compounds through the
entire chain. When the Trump
administration imposed 25% tariffs on
automotive imports, briefly exempting
USMCA compliant vehicles before
partially reinstating duties. The effect
was immediate. Stalantis halted
production at its Windsor assembly plant
in Ontario for two weeks. General Motors
paused production of its Bright Drop
electric vans. Ford announced it may
raise prices on vehicles built after May
2025.
The average new vehicle price in April
2025 reached 48,699,
up 2.5% in a single month. JD Power
projects average prices will increase 5%
by year end. Analysts at the Anderson
Economic Group estimate directly
affected vehicles could see price
increases of 2,000 to $15,000.
But the ripple extends far beyond
automobiles. By summer 2025, economists
documented a 1.9% increase in industrial
goods prices relative to trend
appliances, electronics, machinery.
Companies pass 60 to 80% of tariff costs
directly to consumers. Every washing
machine, every refrigerator, every piece
of equipment now carries the hidden tax
of Washington's trade policy. 25%
tariffs on aluminum make every beer can
more expensive, every window frame,
every building material. 25% tariffs on
steel make every I-beam, every
appliance, every piece of infrastructure
more expensive. In the first year alone,
tariffs on steel and aluminum imports
added approximately $400 million monthly
in duties on Canadian automotive
components. Here is the strategic
miscalculation.
The stated goal was to bring
manufacturing back to America, to force
automakers to abandon Canadian and
Mexican facilities and invest
domestically.
But auto manufacturers cannot relocate
production at the blink of an eye.
Building a new assembly plant requires
minimum 18 months to 3 years of
planning, permitting, and construction.
Training a workforce takes additional
years. Establishing supplier
relationships takes longer still. In the
interim, American consumers pay higher
prices. American workers face layoffs as
production stutters and American
manufacturers begin investigating
whether their future supply chains
should avoid North America entirely. The
tariff wall didn't bring the factories
home. It made the factories question
whether home was worth the trouble.
Block three, the great pivot. Canada
turns to China.
On January 16th, 2026, Mark Carney
became the first Canadian prime minister
to visit Beijing in nearly a decade. He
didn't go to complain, he went to shop.
The joint communicate was revealing.
Canada and China announced a new
strategic partnership, including
preliminary agreements to remove trade
barriers and reduce tariffs. Canada will
allow up to 49,000 Chinese electric
vehicles into its market annually at a
tariff rate of just 6.1%.
China will reduce tariffs on Canadian
canola seed from 85% to approximately
15%.
Canada has set an explicit goal.
Increase exports to China by 50% by
2030.
Let that settle. Our closest ally, our
neighbor, our partner in Five Eyes
intelligence sharing is now actively
cultivating trade relationships with our
primary strategic rival. Here is the
statement that should alarm Washington
most. Mark Carney speaking in Beijing
declared that China has become a more
predictable trading partner than the
United States. The man called China
Canada's biggest security threat during
his campaign.
Less than a year later, he's signing
trade agreements in the Great Hall of
the People and calling Beijing more
reliable than Washington.
This is not about ideology. This is
about interests. Canada exports 80% of
its goods to the United States. That
dependency gave Washington leverage
until Washington weaponized it. Once
Canada realized that dependency could be
exploited punitively, the rational
response was diversification.
And so the Asian pivot begins. Chinese
electric vehicles, BYD, SIC, JI will now
enter North America through Vancouver.
While the United States maintains 100%
tariffs on Chinese EVs, Canada has
dropped its barriers to 6%. Chinese
batteries, Chinese components, Chinese
manufacturing technology will flow into
Canada. The security implications
compound. Canada possesses vast reserves
of critical minerals. Lithium, cobalt,
nickel, uranium, rare earth elements.
These are the materials required for
batteries, semiconductors, defense
systems, and green energy
infrastructure.
Bilateral critical minerals trade
between the United States and Canada
totaled 95.6 6 billion
nearly $100 billion dollar in strategic
materials flowing across the northern
border. Now Canada has signed energy
cooperation agreements with Beijing.
Chinese investment in Canadian mining
and processing is explicitly welcomed.
The quota for Chinese EVs 49,000
initially could expand to 70,000 within
5 years. Consider what we have
accomplished. We impose tariffs to
punish Canada. In response, Canada is
selling the raw materials we need for
our own defense and technology
industries to our primary geopolitical
rival. This isn't punishment. This is
pushing our ally into our adversaries
economic orbit. And there's a geographic
dimension that deserves attention. For
decades, American strategic planning
assumed our northern border was secure.
Canada was part of Fortress America, our
partner in continental defense, our ally
in Arctic sovereignty, our integrated
economic zone. China has been expanding
influence in Latin America for years.
Ports in Peru, investments in Brazil,
relationships throughout Central
America. We watched this encirclement
from the south with concern. Now look
north. Chinese capital flowing into
Canadian energy infrastructure. Chinese
electric vehicles entering the Canadian
market. Chinese trade agreements
securing Canadian commodities. We didn't
prevent encirclement. We accelerated it.
We pushed our own neighbor toward
Beijing. The geopolitical nightmare is
not that Canada betrayed Fortress
America. The nightmare is that we
ourselves shattered it. Block four,
friend versus friend.
The trade war does not remain abstract.
It lands in specific communities. It
devastates specific industries. And here
is the bitter irony. It lands hardest in
the regions that voted for these
policies. American farmers were
immediate casualties. In 2024, Canada,
China, and Mexico together purchased 91
billion dollars in American agricultural
products, our three largest markets. All
three now have retaliatory tariffs in
place. Canada was the second largest
destination for US agricultural exports
in 2024. When Canada imposed retaliatory
25% tariffs on March 4th, 2025, they
targeted $29.8
billion in American goods, including
$5.5 billion in agricultural products
alone, beef, fruit, dairy, pork. The
products were chosen strategically,
items Canada could source domestically
or from alternative suppliers. and they
targeted states that voted for these
policies. Between March and June 2025,
US agricultural exports to Canada
declined by nearly $440 million compared
to the same period in 2024.
Iowa farmers lost soybean markets.
Wisconsin dairy producers watched their
prices collapse. Florida fruit growers
saw orders evaporate. Meanwhile, China
imposed additional tariffs on American
agriculture. Soybeans, cotton, corn,
sorghum. The two largest alternative
markets for American farmers both raised
barriers simultaneously.
Farm incomes fell. Domestic over supply
drove prices lower. The agricultural
sector that was promised protection
found itself squeezed on both ends.
Paying more for imported equipment and
inputs while receiving less for exported
products.
The border communities tell another
story. Crossber traffic between the
United States and Canada fell by 20 to
27%
in 2025 depending on the state. In some
regions, nearly one in four crossings
simply vanished. Canadians stopped
coming south for shopping. They stopped
crossing for vacations. Provincial
liquor authorities removed American
products from shelves. By Canadian
became a national movement.
In Nevada alone, Canadian tourism
dropped 5 to 7% over 200,000
fewer trips. Tens of millions of dollars
in casino revenue, hotel bookings, and
retail spending evaporated. In Maine,
New Hampshire, Vermont, North Dakota,
Michigan, border communities that
depended on Canadian commerce watched
their economies contract. Business
owners reported sales declining 10 to
25%.
Hotels emptied, restaurants closed.
These are not coastal elites. These are
not Democratic strongholds. These are
small towns in Republican border states
watching their livelihoods disappear.
The American Farm Bureau Federation
tracked the retaliatory tariffs
meticulously.
Canada, China, and Mexico. Our top three
agricultural export markets all imposed
retaliatory measures. Over 21 billion
dollars in US agricultural products
faced new barriers in Canada alone.
Farmers do not set their own prices.
They plant, they tend, they hope for
favorable weather in stable markets.
They are price takers in a global
commodity system.
When that system fractures, they absorb
the losses. The worker in Ohio who lost
an automotive job due to production
pauses. The farmer in Iowa who couldn't
sell soybeans to China or beef to
Canada. The small business owner in
Northern Michigan whose Canadian
customers disappeared. These are not
statistics. These are the concrete
casualties of a trade war that was
supposed to help them.
Block five. Endgame 2026.
July 2026 is the inflection point. On
July 1, 2026, the sixth anniversary of
the USMCA's implementation, the United
States, Canada, and Mexico must conduct
a joint review. They must confirm
whether to extend the agreement for
another 16 years, negotiate revisions,
or allow the termination process to
begin. If all three parties agree to
extension, the agreement continues
through 2042.
The next review occurs in 2032. The
single North American market remains
intact. If any party declines extension,
the agreement enters annual reviews
until 2036
when it terminates entirely. US Trade
Representative Jameson Greer has stated
explicitly that a rubber stamp of the
agreement is not in the national
interest. The Trump administration seeks
renegotiation,
major revisions, new terms. Canada and
Mexico have launched their own public
consultation processes. They are
preparing counter positions. The
scenario that should concern you most.
Trump demands a fundamental rewrite by
American provisions that Canada cannot
accept. Restrictions that would
dismantle integrated supply chains.
Terms that would subordinate Canadian
and Mexican economic sovereignty to
American unilateral demands. Carney
refuses. He has already demonstrated
willingness to walk away from American
alignment. He's already building
alternative relationships with China,
the European Union, Japan, South Korea.
If the USMCA collapses, trade returns to
World Trade Organization default
tariffs. The single North American
market dissolves. Supply chains that
took decades to construct unravel.
Canadian critical minerals flow to Asia
rather than American defense
contractors. Canadian energy becomes a
global commodity sold to the highest
bidder rather than a continental
resource. Canadian manufacturing shifts
toward markets that provide stability.
And what has America gained? Consider
the broader strategic picture. Canada is
now building trade and security
relationships that bypass the United
States entirely. The comprehensive and
progressive agreement for Trans-Pacific
Partnership, which the United States
abandoned, gives Canada preferential
access to Asian markets. The Canada
European Union comprehensive economic
and trade agreement provides access to
500 million European consumers.
But it's not merely trade. In June 2025,
Canada and the European Union signed
their first ever security and defense
partnership. Intelligence sharing, joint
military exercises, Canadian companies
accessing European defense tenders. This
is unprecedented. A formal security
arrangement between Ottawa and Brussels
that explicitly does not include
Washington. Canada signed a
militaryindustrial cooperation agreement
with South Korea, defense procurement,
joint research and development, weapons
systems. Our closest ally is building a
parallel security architecture without
us. Canada is diversifying. Canada is
derisking. Canada is treating the United
States as an unreliable partner. Trump's
policies achieved the opposite of their
stated intent. Instead of a compliant
neighbor, we created an independent one,
armed with European contracts, Asian
relationships, and the demonstrated
willingness to trade with Beijing when
Washington becomes hostile. Fortress
America hasn't cracked from enemy
action. It cracked from friendly
 

 

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