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Marko Papic Profile picture
@Geo_papic
Aug 1 • 4 tweets • 1 min read • Read on X
Canada and Mexico won the trade war. Hear me out... A very short 🧵.

By the time USMCA is up for renegotiations, the White House will have suffered such a huge backlash against de-globalization (which nobody in the US actually wants) that the USMCA loophole will be ossified.
At that point, only Mexico and Canada will have 0% tariff access to the US market, which will attract an enormous investment boom in both countries as other exporters surge investments to gain access of the US market.
I suspect that Prime Minister Carney understands some of this dynamic. Which is why he is standing firm and stoic in the face of the 35% tariff on Canada. Which, without USMCA renegotiations, is kind of silly anywhow. This is a good strategy.
I think that the next 24 months may prove to be a huge boon for the Canadian economy.

CAD at parity by 2030.

Makings of that global superpower that my cousin @JacobShap fears are in the works!! 🤣🙂😉

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More from @Geo_papic

Marko Papic Profile picture
Jun 16
Markets appear to be FADING Iran-Israel conflict today. Many commentators equate that with the "end of the war." I don't necessarily agree with that. Kinetic action by both sides could continue for months and even years. But markets could learn to ignore it.
Take the Iran-Iraq war from 1980-1988. It is not that much different from current tensions between Israel and Iran. The entire West - including the US and France - essentially propped up Saddam Hussein in that conflict.
Somewhat ironically, Israel offered support to Iran during the conflict. But the reality was that Iran largely felt isolated, with much of the world throwing its weight behind Iraq.
Read 10 tweets
Marko Papic Profile picture
May 13
I think that the @WhiteHouse should print out these charts and send to @realDonaldTrump. It's very simple. They explain why the pivot away from wanton trade war is political obvious.
In my view, President Trump did not "capitulate." He responded to material constraints. It's actually funny to see all these liberal critics of President Trump who also happen to be bearish. They're melting down. But why? If the trade war doesn't make sense in the first place, should Trump not be praised for pivoting out of it?
So why the pivot? Yes, of course... The bond market matters. As does retaliation against US interests. A multipolar global distribution of power is also a constraint. All of these are fine reasons to be rational. But the ultimate constraint on President Trump are the voters.
Read 22 tweets
Marko Papic Profile picture
Feb 20
I am in Europe right now. Many friends and clients over here are buying into the narrative that Europe is being "sidelined" by the US in its negotiations with Russia.

I see it differently.
Every time Europe made a deal with Russia - for example, the Minsk agreements - the US undermined it. It is not a secret that the US encouraged Kyiv to essentially ignore that deal, which ended the 2014-2015 conflict.
But wait... the Minsk agreement was not in Ukraine's interest. Fair, but neither is the current conflict! The US encouraged Ukraine to push against the Europe-negotiated solution and then did not put strong enough of security guarnatees to protect it from Russia.
Read 8 tweets
Marko Papic Profile picture
Jan 9
Some thoughts on the LA fires, given the curious situation that I find myself in... being in the midst of a macro calamity.

To be clear, I don't believe in "reports from the ground." they are often actually the least sober. Least useful. So... a cautious and modest 🧵.
First, we now have the first reports of the size of the "Palisades fire." See below. Image
It is effectively as large as West LA - population around 200,000 - itself. However, the prevailing winds have taken the fire to the southwest, as they normally do. As such, the fire has stopped along Rustic and Santa Monica Canyons that separate SM from Pacific Palisades.
Read 15 tweets
Marko Papic Profile picture
Jan 4
Looking for some early January weekend reading? Highly recommend this @SteveMiran piece from two months ago on restructuring global trade architecture.

hudsonbaycapital.com/documents/FG/h…
It is very good! I have 10 thoughts on the report.

1) What does the US do about Chinese "enemy shoring" around the world? Is the US prepared to raise tariffs to 60% against even geopolitical allies that Chinese companies use as transit exporters?
2) Currency offsets on tariffs. Yes, USD rose in 2018/2019. (I disagree this was because of tariffs, but that is neither here nor there). The bigger question is how would that aid US manufacturing? Unless the US imposes very high tariffs on all trade partners.
Read 23 tweets
Marko Papic Profile picture
Oct 15, 2024
This is a 🧵on the state of America's relationship with globalization in light of Trump's potential pivot towards 1980s-style resolution to the now six year trade war with China, as articulated in the @Bloomberg interview on October 15.

If President Trump had one superpower, it would be to "sniff out" the median voter preferences on the most important issue of the moment. In 2016, he outmaneuvered Secretary Clinton on trade, forcing her to abandon the TPP deal in her campaign rhetoric -- a deal she obviously negotiated!
Trump leaned into the arguments made by the long-time critics of US trade policy, particularly that of Robert Lighthizer. Lighthizer's epic 2010 testimony to the US-China Economic and Security Review Commission formed the pillar of Trump's own campaign.

uscc.gov/sites/default/…
Read 17 tweets

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