How the heck is it possible that President Trump took on Canada in a way that went total ad hominem, that just was totally antagonistic to our country's largest trading partner?
I found myself thinking this is no longer the art of the deal, it is the art of the destruction. Do these negotiators hate each other?
Now we know that trade battles around the world have not yet impacted earnings for more than a handful of industries. But Canada is the largest trading partner for 36 states. Canada has been our nation's best friend through two world wars and for a host of conflicts. It is unnerving and even shocking how much this man seems to dislike Justin Trudeau, the prime minster of Canada, and, perhaps at this moment, Chrystia Freeland, the Minister of Foreign Affairs who was obliquely mentioned in a very critical way by the president. To those of us who know Chrystia from her many years in journalism, including the United States manager of the Financial Times, it seems pretty out there to hear such criticism.
And the reaction from the market from the dissing of our most favored partner? Positive. It's as if it didn't matter.
Now you know what that does? It calls into question the very narrative that has gripped this market forever: trade gone awry is going to derail the entire economy.
I cannot stress how important Canada is and was even before NAFTA. I am not saying we can't live without Canada. I am saying that the actual logistical nightmare of trying to unwind Canada trade is really going to hurt so much business that in many ways it is more important than China to our day-to-day economy. That's not hyperbole. For trade, Canada is almost considered to be a true extension of the U.S. There are very few walls and I don't mean the literal kind.
Our auto companies are the prime pain point in the system. Our companies have always felt that Canada and America are interchangeable.
And it doesn't seem to matter? Now you could say, wait a second, Trump also attacked China directly, saying that their war on the U.S. is far worse than people realize and it includes election meddling. It was a true setback to whatever talks we have with China, if any.
This is not a tariff tiff. It isn't a skirmish, as Jamie Dimon, the CEO of JPMorgan Chase (JPM) told me on Monday. It's just a decision to put America first and our largest trading partners on notice that they are going to be supplanted by others.
I am flummoxed. Today it seems that the issues that have plagued us since the previous top of the market -- trade, plus rate hikes -- aren't what matters. What matters? Earnings. Sales. Growth. Employment.
Do they, pardon the irony, Trump everything?
Today says they do.
This was all inconceivable six months ago.
Now it is a bullish reality, a shocking bullish reality.
We gotta find out what matters, at least for today. Otherwise what has traumatized the bulls is now being ignored.
I'm frantically trying to calibrate what this means. Have we all had it wrong? Or, is today an aberration? To say that it is positive may end up being the most understated verdict of this trade friction so far.