SH*T: TRUMP CANCELS TARIFF NEGOTIATIONS - STOCKS TANK

The trade war is back. Liberation is

back. Donald Trump says, "We have just

been informed by Canada, a very

difficult country to trade with." Mind

you, Donald Trump set up the USMCA to

replace NAFTA with Canada. Okay?

Including the fact that they charged our

farmers as much as 400% tariffs for

years on dairy products. Okay? This is

an old fallacy. No farmer has ever paid

the 400% tariffs. These are simply

quotas so that the United States doesn't

dump product on Canada. This is very old

news. Oh, Thoughtful Balance just

donated some dollaras to me and says, "I

wish you and your family a good life.

Your humor and objectivity might give

humanity a chance. We always have to

call out irrationality. Call out all

Like and subscribe." That

That's a nice comment. That's a nice

comment. That's very nice. All right.

So, has just announced that they are

putting a digital services tax on

American technology companies. So this

would be uh presumably like on Apple,

Microsoft Word, Windows,

Salesforce, Palunteer. Basically attacks

on all well digital services. I just I

just think it's nice to think about

brand names when you hear that sort of

phrase and then it's a little bit more

useful to understand. All right. Uh

which is a direct and blatant attack on

our country. They are obviously copying

the European Union. That's true. They

have done the same thing. Yes, but the

EU has been recently talking about

trying to walk back the digital services

tax as a way to negotiate with the

United States. But I think this the

problem is this is sort of like waking

up markets again to the idea that trade

negotiations aren't actually going as

well as we're being told. This deal we

signed in China is just a framework of

getting off the most extreme

hostilities, but we're still at

ridiculously high tariff levels. 55% on

China, which is starting to slow port

traffic pretty substantially in the west

coast with inventories rising. Whereas

on the east coast, you don't have as

much of a problem because you get less

of that Chinese trade coming in. But

anyway, they're obviously copying the

European Union, which has done the same

thing, is currently under discussion

with us. Also, based on this egregious

tax, we are hereby terminating all

discussions of trade with Canada

effective immediately. We will let

Canada know the tariff that will be paid

to do business with the United States of

America within the next 7-day period.

Thank you for your attention to this

matter.

Somewhat unfortunate because the day was

kind of going good. You know, the market

was doing very well. Uh the, you know,

the Q's were up about 50 basis points.

You had uh Nike was running quite

remarkably which uh we had been pitching

in the uh alpha report this morning.

Still up 15%. Make sure you join that.

Use coupon code jpal uh on on meet.com.

And circle has been falling since it

lost the 210 level which isn't a

surprise which we also watched very Oh

yeah, look at that. Look at that. This

morning in the alpha we called out this

line that this is where it was going to

be heading to and look at that. It

literally just went there. Now, of

course, this little extra boost was

taken there because of this uh

announcement from Trump, but what we

need to see now is some reaction from

Suits. Uh this is unfortunate because it

does sadly take a decent market

environment right now where we're just

hitting these all-time highs. Uh and

we're basically going back to now

concerns about trade. Uh Donald Trump

has been pitching the idea that we're

going to be getting a an India trade

deal soon. But, uh take a listen to

this. the um trade euphoria in stocks

masks skepticism in other assets in

otherwise bonds and uh specifically

bonds actually uh and maybe even to some

extent Bitcoin which has gotten stuck in

the mud a little bit are a little

uncertain about what's going to happen

with trade deals whereas bond or the

stock market has basically been straight

up. Uh, you've got the doomers are

saying, okay, they're just quoting, so

we don't have an opinion yet from them.

Let's take a look at what some other

reactions are here. But this is

obviously just now breaking news from

the Trump administration. And

unfortunately,

the fact that we don't have a deal with

a single deficit nation yet is bad

because there's no blueprint. You know,

if you had a really good deal that ended

up coming up with Canada, maybe the

other countries would be more inclined

to negotiate. But now that Donald Trump

is like, you know, all right, throw

everything up in the air and just quit

and we'll assign you a tariff rate. A

lot of countries will probably just wait

and see like, okay, uh, what is the

tariff rate going to be on Canada then?

And then we'll kind of wait and see. Uh,

so

not a lot of actual opinion yet on what

this means, but to me it just

reactivates actually. I mean, I can't

see any much of another opinion here.

So, I'll just give you my own. Let's

just write this out together and let's

think this through logically together.

So number one, what this does is it

creates a delayed uh in a a a delay in

the incentive to negotiate trade for

other countries. Okay, so we have to

figure this out ourselves and that way

other people can copy me. Yes, patent

back. See what I just did there? Trying

to promote the 69 IQ. Maybe today will

be a 70 IQ day. So it creates a delay in

the incentive to negotiate for other

countries, right? because you you just

wait and see, right? So, uh wait and see

what happens with Canada assignment.

Okay, Trump basically just gave a time

frame of 7 days. So, two 7 day clock

starts now that would end uh July 4th

actually. Ah,

a noble day. Uh 7 days would be July

4th. So there's um obviously the next

week will now be uh very much in flux

potentially sideways to down in markets

as we get clarity

on on tariffs which this will be the

first assignment right this will be the

first assigned tariffs.

So now the question is, are we going to

have 10% tariffs?

You know, 10% baseline is where we've

been, you know, is it going to be

uh 15%, 20%, 30%.

If the the higher it is,

the more markets see it as a a Lib Day

2.0, right? Because if you come out with

a big, you know, cardboard again and

you're like, "Oh, we're going to do 40%

tariffs with some madeup math again."

People will freak. And basically, all of

the hope debt that we've created starts

coming due. So, we've been running on

hope debt. So, hope debt is kind of a a

little term that I've been coining

lately. Uh, and what hope debt is is

hope on tariffs with deficit nations.

You know, hope hopefully this ends up

going away and not being a problem. But

again, it's hope and hope is not the

most convincing strategy. So, hope that

tariffs go away. Hope that Iran

signs a peace deal. Actually, signing a

peace deal would be great. Uh, hope that

Ukraine war ends. Hope that AI earnings

keep going.

uh hope

that the Fed cuts before labor market

issues uh and hope that tariffs don't

compress earnings/ labor the consumer

right

generally this hope is acceptable

because uh betting against America is

really hard don't do it right but it

does create enough uncertainty to say

crap app. Are we going to go through

this environment again? Then though we

look and say uh last lib day was clearly

a buying opportunity

uh as it you know resulted in a massive

short squeeze uh institutions off sides

and really reiterated a V-shaped

recovery

[Applause]

uh because we haven't really damaged the

economy yet.

Unfortunately, now we come back to this

Canada issue now bringing up all of this

hope debt again that we now have to

potentially deal with. So, it's not

great. So, where do we go from here?

Okay. Uh what's happened in the past?

So, scenarios going forward.

going forward. Best case scenario number

one

uh one would be Canada withdraws uh

digital service tax. I actually like to

call it the DS tax. Uh also known as the

dumb SH9T tax.

Okay. Uh Canada best case scenario

number one, Canada withdraws digital

service tax. Okay, that would be great.

Uh best case scenario two, Canada

doesn't gets assigned a low tariff rate

like 12% except USMCA compliant. Uh this

is weak sauce tariff and uh market

should rally on that.

This is just not that big of a deal.

Doesn't mean that you're not going to

have larger issues, right? Uh worst case

one,

scenario one, Canada uh preemptively

retaliates more

and uh plus Trump retaliates again. Uh

worstc case scenario two,

other countries

also throw up their hands and uh we're

back to no deals, right? That that would

be bad.

So in these various different cases, I

would say this right here would be mark

it up. Uh this right here would be mark

it up.

This right here would be market sideways

more concern and then obviously right

here this is market down

my POV on sort of like quick reaction.

So if you want sort of like quick live

reaction from Kevin on on you know

what's going on here that's my take.

Somebody says or Trump annexes Canada.

I don't think that's going to happen.

Oh, look. CNN's talking about it now

immediately. CNN's Kristen Holmes is

live for us at the White House. Uh,

Kristen, do we have a sense of what led

up to this? Did the president say

anything else? Oo, talk to me, Kristen.

It appears this is all about a digital

tax. And just to give you a little bit

of context, we saw President Trump with

the Prime Minister Carney in Canada just

a week and a half ago, and they seem to

be getting along very well. They said

that the trade negotiations were moving

forward successfully, but obviously uh

they have hit a kind of divide in the

road here and President Trump saying

that no longer will they participate in

any trade talks with Canada. So he

posted this on True Social moments ago.

He said, "We have just been informed

that Canada, a very difficult country to

trade with, including the fact that they

have charged our farmers as much as 400%

tariffs for years on dairy products, has

just announced they are putting a

digital services tax on our American

technology company, which companies,

which is a direct and blatant attack on

our country. They have are obviously

copying the European Union, which has

done the same thing and is currently

under discussion with us. Also, based on

this egregious tax, we are hereby

terminating all discussions on trade

with Canada effective immediately. We

will let Canada know the tariff that

they will be paying to do business with

the United States of America within the

next 7-day period. Thank you for your

attention to this matter. Uh you

remember, Brianna, we've talked about

this a number of times that Canada is

one of the United States's biggest uh

trading partners. That's actually why

you saw Carney when he was here meeting

with President Trump. uh you can see

them that was their m meeting in the

oval office there. That's why he was

getting frustrated with the president

because he said that the president kept

kind of diminishing Canada saying you

know we don't need to trade with you and

and he was saying well actually we're

this is true this is the number two top

trading company although this is from

the Census Bureau a few years ago let me

get a more recent date digital tax it

does appear as though it was going to be

set into effect uh in 3 days on June

30th and the big part of this is that it

also includes there we go yeah number

three because Mexico took over. So

Mexico 16% then China 14, Canada 13,

Germany 5 about 3 days American

companies to pay on this digital tax.

Now this is something President Trump

has complained about uh at length when

it comes to the United Kingdom as well

as the European Union. You see it there.

He talked a little bit about this when

he made the deal with the United

Kingdom. However, it does appear the

United Kingdom is still taxing the US

for that digital tax, but the United

States believes it got other things out

of that negotiation. here. President

Trump had expressed and his

administration had expressed to Canadian

leaders that they were against them

adopting this digital tax. Obviously, uh

they did so anyway. And now you see

President Trump is severing all trade

talks with them. Big Yeah, you can see

uh Doomberg's POV here. Canada is

proceeding with its digital services tax

on the technology companies such as Meta

despite a group of seven agreement that

resulted in removing the revenge tax

proposal from Trump's tax bill. Oh, he

might try to put it back in the bill

then. First payment for digital tax is

still due Monday. 3% tax uh of the

digital services revenue a firm makes

from Canadian users above $14 million.

So basically, it's a 3% tax above $14

million of income that would apply to

these larger technology companies.

Aha. Yeah. And here it is. Digital

services tax. Uhhuh. Trump's going to be

pissed.

This sort of like reactivates

uh trade negotiations or at least trade

topics, which again is a problem because

we never really completed trade

negotiations. We just punted them, which

is not great. Uh, unfortunately, as a

result of this, the 10-year Treasury

just spiked a bit.

Of course, it did. It always does. Yeah.

You could see since the announcement

here, you've gone from 4.24

to about 4 almost seven now. About three

basis point move here.

And the 102 spread just popped up to 54.

More in shock territory. So, not

fantastic,

but it gives us an idea of what's going

on, why it's going on, and uh just sort

of another wakeup call to uh you going

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how it goes. Congratulations, man. You

have done so much. People love you.

People look up to you. Kevin Pra there,

financial analyst and YouTuber. Meet

Kevin. Always great to get your take.