- 7/11/2025
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LifestyleTranscript
00:00What's up guys, it's Graham here. So Trump has declared economic war on Canada, and it's working.
00:05That's right, in a video that I never expected to make, our biggest trading partner was just at the
00:10center of a massive controversy, all because of a brand new tax that was about to hit the United
00:15States today, which Trump called a direct and blatant attack on our country. Like, without
00:20exaggeration, this new tax has the potential to start another trade war, cost American companies
00:25billions of dollars, and lead to brand new tariffs that make everything more expensive for you and me.
00:31Not to mention, most people have no idea what's currently taking place. That's why we got to
00:35discuss exactly what just happened, what this means for everybody watching, and how you could
00:40best prepare going forward. Because like it or not, this is just the very beginning. Although before
00:44we start, if you appreciate breaking news videos like this, where we just cover the facts, regardless
00:49of what side you're on, it would mean the world to me if you tax the like button or subscribed if you
00:53haven't done that already. Doing that seriously helps with the channel more than you could imagine.
00:57And as a thank you for doing that, here's a picture of a baby Canadian goose. So thanks so much,
01:02and also a big thank you to Incogni for sponsoring this video, but more on that later.
01:05Alright, so to bring you up to speed, let's discuss where all of this begins. Canada.
01:10Even though it seems like China's received most of the spotlight over the last year, behind the
01:15scenes, Canada has actually become America's largest trading partner, with over $761 billion
01:20worth of goods exchanged in 2024. This means that every single day, $3.6 billion worth of goods
01:28crosses our borders, with oil, natural gas, aluminum, and steel making up a significant portion of that.
01:33But it doesn't stop there. For over 150 years, Canada has been one of America's closest allies
01:39and trading partners. We share the world's longest undefended borders. We fought together throughout
01:44world wars. And our economies, for the most part, have been completely intertwined. As in,
01:48what happens to the United States affects Canada, and vice versa. Like, Canada has become so commingled
01:54with our own economy, that in 1965, an automotive trade agreement was signed to create one of the
01:59biggest free trade zones on the planet. Meaning auto parts could freely travel from the US to Canada to
02:04Mexico without much opposition. This is also why Canada has become the largest consumer of American
02:09goods and services over the last few decades. So if there's one country the US cannot afford to
02:14alienate, it's Canada. That's why when something like a new tax comes up, initiated from Canada,
02:20it's a big deal. They could equally impact both economies. So here's exactly what's happening.
02:25All of this comes down to what's called the digital services tax. See, back in 2020, Canada realized
02:31that giant digital corporations like Google, Facebook, Amazon, and Netflix were making a ton of
02:36money off Canadian users while paying a relatively little tax back to Canada. After all, in their mind,
02:42Canadians browse American websites, they click on ads, and they stream shows. So Canada wants a portion
02:48of those proceeds. Except there's a problem. Most multi-billion or trillion dollar companies incorporate
02:53themselves in a place like Ireland, which has a corporate tax rate of just 12.5%. So Canada came up
02:59with a solution. Instead of those American company profits being distributed out of the country, Canada
03:04would implement what's called a 3% digital service tax. The plan was that this would only apply to
03:10companies making over 750 million euros a year and have at least 20 million worth of Canadian digital
03:16revenue. So the small companies are off the hook. But the big American tech giants fall right into
03:21this category. And even Canada's own government estimated that around 90% of the money collected
03:26from the tax will come from US-based companies. However, even though these taxes were initially
03:31proposed in 2020, Canada postponed their implementation while trying to work out an international solution
03:37through the Organization for Economic Cooperation and Development, which aimed to create one set
03:42of global tax rules that would apply around the world. Seems normal, right? Well, month after month,
03:47year after year, that initiative kept getting pushed back and delayed. So eventually Canada got fed up
03:53and decided to move forward without the rest of the world. And in 2024, they passed their digital services
03:59tax, which made these tax payments retroactively owed all the way back to 2022. This meant that big tech
04:05companies could suddenly owe billions of dollars going back for the last three years with a payment
04:10due date of June 30th, 2025. Essentially, everyone knew that this tax was coming, but there was a lot
04:16of uncertainty about whether or not Canada would actually go through with it while being in the
04:20middle of a trade negotiation. Although as we recently found out, this is where everything suddenly
04:25went very, very wrong. After months of trade negotiations, Trump abruptly canceled all trade talks
04:31with Canada over their new digital services tax, saying that based on this egregious tax,
04:36we are hereby terminating all discussions on trade with Canada effective immediately.
04:40We will let Canada know the tariff they will be paying to do business with the United States
04:44of America within the next seven day period. On top of that, Trump also said that economically,
04:49we have such power over Canada. We'd rather not use it. It's not going to work out well for Canada.
04:54They were foolish to do it. So if you're curious exactly what this tariff could be,
04:58and what this means for you, you're going to want to hear this. Although before we go into that,
05:02just like governments are going after big tech with taxes like Canada's DST,
05:06the reality is our own information is already being tracked and traded. Like most people have
05:12no idea just how much of their personal information is floating around on the internet in the hands of
05:16third parties, spammers, and other people who might want to target you. Like just try Googling yourself,
05:21full name, city, and state. You'll be shocked to see just how much of your information is out there
05:26already. Even though this seems impossible to stop, you do have a right to protect your privacy
05:30and request the data brokers remove the information they have about you. And even though this seems
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06:29your personal data taken down, check out incogni.com and use the code GRAM at checkout for 60% off an
06:35annual plan. The link is also down below in the description to get started today. Thank you so
06:40much, and now let's get back to the video. Alright, so in terms of where we currently stand,
06:44it's important to keep in mind that we already have quite a few US-Canadian tariffs. For example,
06:49there's currently a 25% tariff on most Canadian goods, as well as auto parts and vehicles,
06:54a 50% tariff on steel and aluminum, and a 10% tariff on energy, which is currently paused
06:59indefinitely. And when you really get down to it, these tariffs really aren't anything new.
07:03For instance, in 2017, the United States slapped Canada with tariffs on lumber. In 2018, we saw the
07:10same 25% tariff on steel and aluminum. And in 2019, those tariffs were lifted after back-and-forth
07:16negotiations. Point being, tariffs are not this futuristic thing that's exclusive to 2025.
07:21They've been going on for quite some time, except now they tend to be the focal point of what we
07:26hear about in the news. The same also applies to a digital service tax. Most people have no idea that
07:31France enacted a 3% tax in 2019, the United Kingdom launched a 2% tax, and over a dozen other locations
07:38also followed suit. So Canada's proposal is not a revolutionary concept, and it's not even something
07:44that only Trump had an issue with. In fact, Biden's team was actively working to get this postponed,
07:49or eliminated entirely, in favor of a global resolution. So in terms of what's happening
07:53today, here's what you came for. First of all, when it comes to tariffs, or really any negotiation,
07:58Trump said it himself. We could do whatever we want. This means there's no hard deadlines,
08:03there's no set strategy to negotiate, and if matters need to escalate for the sake of getting a deal
08:08done, even if it's done very publicly without hesitation, so be it. That's why when recently
08:14asked about the July 9th tariff deadline for global tariffs, Trump said that we could extend it,
08:19we could make it shorter, effectively allowing whatever he wants to happen. I say this because
08:24even though he openly walks away from tariff negotiations or throws out tariff numbers,
08:29it doesn't mean those tariffs will actually happen. It doesn't mean that they will stay in effect,
08:34and it doesn't mean that they will even be enforced. Like by now it seems like the general
08:39consensus is that he'll throw out tariff numbers, he'll use it as a negotiation, he'll pause and
08:45postpone if the deadline isn't reached, and then he'll work out a resolution before things break.
08:50In fact, when it comes to investing, all of this feeds into what's called the taco strategy.
08:54Okay, I know this is not going to be taken too seriously, but some investors have made a ton of
08:59money following the acronym, Trump always chickens out. And if that sounds confusing, it's investing
09:05in the philosophy that Trump tends to make some intense threats against trading partners and then
09:10pulls back on his position once confronted with an adverse reaction from within the market.
09:14Now on the one hand, it's said that it's easy to underestimate the amount of harm that this
09:18negotiation style has done, not just to other countries, but also to the United States.
09:22Although on the other hand, this is a textbook strategy from his book, The Art of the Deal,
09:27which starts with an extreme ask using leverage and urgency while pressure is applied publicly
09:32without losing control of the narrative. All of which is currently playing out in real time.
09:36Plus, if you invested based off this philosophy, you would have made a ton of money buying the
09:40dips throughout March and April. And whether or not this is Trump chickening out or really just
09:45negotiating the art of the deal is really up to you to decide either way. But the point still remains.
09:51Overall, the market does not believe that tariffs are going to have a longstanding impact,
09:55even though the US dollar is down compared to other currencies, investors are still bullish.
10:00And it doesn't appear as though Trump would risk damaging the entire economy permanently.
10:04But then again, I could be totally wrong.
10:06Now, in terms of my own thoughts, I've said this before a few months ago,
10:09but it's worth repeating because so far this has done nothing but come true.
10:14Trump starts by threatening tariffs by a certain date. The market goes down,
10:17but eventually starts to recover. On the days tariffs go into effect, the market plunges.
10:21But 24 to 48 hours later, an agreement is reached that gives an extension or exclusion on past
10:26tariffs. The market goes back up, and then the process repeats itself when tariffs go back into
10:31effect until once again, another agreement is reached. In this case, from Canada's perspective,
10:35they want tax fairness, where big tech isn't able to profit from Canadian users without paying a tax.
10:41But from the United States perspective, they see this as a direct tax on American companies,
10:46especially since most Canadian companies wouldn't fall under this category.
10:50But big picture, it's become clear that Trump walking out is purely a negotiation strategy.
10:55And wouldn't you know it, the breaking news you've all been waiting for, it's working.
10:59That's right, just hours before the digital service tax was supposed to be going into effect,
11:04Canada completely rescinded it in anticipation of a mutually beneficial comprehensive trade
11:09arrangement with the United States. Or in other words, they're pausing it again after saying
11:13they weren't going to do that a few weeks ago. However, even though this is good news for the
11:17United States, and partly why big tech is up today, it's important to mention that the digital
11:22service taxes are not off the table entirely, and are still subject to ongoing negotiations
11:27that are going to happen over the next few months. Not to mention, other countries throughout
11:31the European Union have still floated the idea of implementing their own taxes. So rest assured,
11:36this will all be incorporated into future trade deals. That's why I believe that almost
11:41everything we publicly see is just for show, and our upcoming tariff deadline of July 9th will turn
11:46into another negotiation. Long term, however, I do believe that there will be a point where a digital
11:51services tax will be enacted globally, but as of right now, this has just gotten delayed after delayed,
11:58and it's unclear when eventually this might happen. This is why I just keep buying the dips,
12:03I keep investing as usual, and if the market goes down, great, it's a way to buy in even cheaper,
12:08and if it goes up, then that's great too. Either way, it's a win-win.
12:12A perfect example of this is that stocks have just hit yet another brand new all-time high.
12:18Overall, investors are pretty optimistic for trade agreements, and the growing consensus is that
12:23all of this is pretty much self-inflicted, so if we need to walk back on certain items,
12:28there's really nothing stopping the US from doing so. Essentially, the lesson here is just not to get
12:33scared off by headlines. And just know that long term, everything should eventually just work itself
12:38out. On top of that, there's also talks today about Jerome Powell soon being replaced,
12:43while being accused of lying to Congress over a $2.5 billion Palace of Versailles renovation.
12:49And if we get another Fed chair, like Scott Besant, then Trump could also get his way with lower
12:54interest rates. Which, yeah, could completely send the market higher again on the basis of a lot more free
12:59money, so we'll have to keep an eye on this. And if you subscribe, I promise I'll keep you up to date.
13:04Although keep in mind, I am just a random dude on YouTube making videos in a half-converted garage,
13:09and I have no idea what I'm talking about. So if I've left anything out, or I missed anything,
13:14please let me know down below in the comments, and I will do my best to read and reply to as many
13:19of you as I can. So thanks so much, as always make sure to hit the like button and subscribe, and until next time.
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