Canada slapped $20 billion in tariffs on U.S. goods after trade talks collapsed last week. The Canadian negotiators flew home empty-handed. Trump's tariffs take effect anyway. Turns out when you threaten someone's economy, they threaten yours back. Revolutionary stuff.
Retail traders immediately began panic-googling "what does Canada even export" and "can I short maple syrup." The answer to the first question is everything you own. The answer to the second is no, because you don't have a commodities account and wouldn't know how to use it if you did.
The most beautiful part of this trade war escalation is watching amateur investors try to figure out which stocks to buy. They're reading headlines about lumber tariffs and thinking "I should buy Home Depot." They're seeing dairy restrictions and buying Costco. They're applying the same logic a dog uses when it sees a squirrel. Just pure instinct, no thought, straight into the position.
Meanwhile the charts don't care. Support levels don't read Reuters. Resistance zones don't attend G7 summits. The 50-day moving average has no opinion on Canadian trade policy. It just sits there like a horizontal line, doing exactly what it was always going to do, completely indifferent to which country is mad at which other country this week.
Some guy in Michigan is currently holding shares in a steel manufacturer he bought because his cousin told him tariffs were bullish. He has no exit plan. He doesn't know what the company's PE ratio is. He couldn't find Canada on a map if you spotted him the Great Lakes. But he's got 200 shares at $34.50 and a dream that somehow, some way, two governments having a pissing contest will make him rich.
It won't.
Photo by John McArthur on Unsplash
Leave a Comment