THE DISPATCH

Photo by John Simmons on Unsplash

The M&E Dispatch

"You Haven't Really Been Harmed"

A refresher. For the Ambassador. Slowly.

Mr. Hoekstra, we appreciate you taking the time. We really do. But with the greatest of respect, and we mean that in the most Canadian way possible, so please understand what we're actually saying, you might want to acquaint yourself with the file before your next interview.

We read about your appearance on Rebel News. Things like "you guys haven't really been harmed by the tariffs," and Canada having "the second-best deal in the world," and, our personal favourite, "Canada's not our problem with autos." We also caught the bit where Chinese EVs crossing from Canada into the US is something that "ain't gonna happen."

We took notes.

Because one of two things is happening here. Either the briefings you're receiving about the Canadian economy are incomplete, in which case we'd gently suggest finding better ones. Or you're fully aware of the situation on the ground and have chosen to describe it as "not really harmed" anyway, in which case we'd suggest that Canadians, who have been reading their own mail, watching their own plants close, and sending newsletters into inboxes full of bounced Algoma Steel addresses, are perhaps not the audience for that particular narrative.

We're a polite people. We'll hold the door. We'll apologize when you bump into us. But we do know how to read a room. And we know what gaslighting looks like, even when it's delivered with a smile and a talking point about second-best deals.

So. Let's have a look at the room, shall we?

🎯 The Intended Harm

The tariff strategy was never subtle about its goals. Hit Canada in the sectors where it would hurt most, steel, aluminum, lumber, autos, and leverage that pain into concessions. The logic, from Washington's perspective, was straightforward enough.

And to be fair, it landed. It landed on:

• Algoma Steel, where corporate email addresses have gone dark one by one, and LinkedIn feeds have turned into a sea of green "Open to Work" banners over the faces of tradespeople and engineers in Sault Ste. Marie.

• GM facilities in Canada, now closing. The auto sector, the very sector these tariffs were supposedly designed to repatriate, is consolidating south of the border. Exactly as critics warned.

• Canadian exports broadly, which were 4% lower by Q3 2025 than before US tariffs were imposed, with declines hitting even sectors not directly targeted. Bank of Canada

The Ambassador himself noted that Canadian-built cars run "50%, 75% US content." So the manufacturing that got disrupted was, in large part, American manufacturing too. The jobs that left Oshawa didn't move to Michigan. They just left.

💥 The Actual Effect

Here's where it gets interesting, and not in the way Washington planned.

Trade policy is a blunt instrument. You swing it at one thing and it hits several others. The tariff pressure on Canadian goods didn't just affect Canadian producers. It rippled into supply chains, investor confidence, and cross-border business relationships that took decades to build.

Canadian businesses have grown reluctant to rely on US inputs, and imports from the United States have fallen noticeably since 2025, while imports from other countries have risen. Bank of Canada That's not a temporary pivot. That's a structural shift in purchasing behaviour. Once a supply chain is rewired, it rarely goes back.

The pressure also triggered something Washington clearly didn't anticipate: a wave of non-Canadian companies deciding that operating inside the US tariff wall was less attractive than operating just above it.

• Pandora, the world's largest jewellery brand, opened a new online distribution centre in Mississauga, Ontario, explicitly to reduce its exposure to US tariffs. Pandora Group Baltimore used to handle all of North America. Not anymore.

• The Siebel Institute of Technology, America's oldest brewing school, transplanted its Chicago campus to Montreal, VisaHQ citing US visa cutbacks and rising compliance costs.

• Phillips Distilling, maker of Sour Puss liqueur, shifted production from Minnesota to Montreal after Canadian liquor boards curtailed shelf space for US imports. VisaHQ

• Launchpad Co-Pack in Collingwood, Ontario, found itself on the winning side of the trade war as foreign companies flooded in looking for ways to avoid doing business in the US. Marketplace

The wall has two sides. Some companies have decided they'd rather be on ours.

🚗 About Those Chinese EVs

Yes, Mr. Ambassador, Chinese electric vehicles won't be crossing into the United States from Canada. Understood.

But let's be clear about what actually happened here. Canada didn't lower its Chinese EV tariff out of naivety. It did so as part of a deal that opened Chinese markets to Canadian canola and lobster, agricultural exports critical to rural economies already battered by US trade policy. That's not opening floodgates. That's a trade. A rational one. The kind countries make when their primary trading partner has become unpredictable.

The pivot to Asia isn't a betrayal of the relationship. It's the direct and entirely predictable consequence of how that relationship has been managed.

🛢️ Meanwhile, About Those Commodities

Here's the part of the story that doesn't get nearly enough attention, and the part that, frankly, changes the complexion of everything above.

• Oil is above $100 a barrel. Not approaching it. There.

• The Strait of Hormuz, the chokepoint through which roughly 20% of global oil supply moves, has become, functionally, a toll route. Tanker operators are pricing in disruption. Insurers are adjusting. The risk premium is real, it is large, and it is not going away soon.

• Gold is surging. Investors fleeing instability always find their way to it, and they are finding their way to it now.

• Silver is climbing, driven by both safe-haven demand and its critical role in solar panels and electronics manufacturing.

• Critical minerals, lithium, cobalt, nickel, rare earths, are tightening globally as supply chains fracture and every major economy simultaneously decides it needs to secure its own sources.

Now. Who benefits from $100+ oil, surging gold, climbing silver, and a critical minerals scramble?

Canada.

Not abstractly. Specifically. The oil sands. The hard rock mines of Northern Ontario and Quebec. The mineral belts of British Columbia and the territories. The resource infrastructure this newsletter has covered for nearly thirty years. These are not hypothetical future assets. They are producing assets, right now, in a price environment that is moving in their favour while global instability does the marketing for them.

For the average American consumer, this is unambiguously bad news, higher fuel prices, higher costs for manufactured goods, a Federal Reserve with no good options. But for Canadian resource companies that have spent years navigating low commodity prices, regulatory headwinds, and now a trade war? This is what a horizon looks like.

🧭 A New Course

Canada is not waiting for Washington to remember it exists.

The government is spending C$32 billion on Arctic infrastructure, not just as a sovereignty statement, but as a long-term resource and security play. It is deepening ties with Norway and the Nordic nations. The number of Canadian exporters planning to enter new markets has surged, with 65% planning market expansion in the next two years, and the number of companies already exporting to multiple markets has more than tripled over the past decade. Global News

The Carney government's deal with Beijing, EVs in, canola and lobster out, is a data point in a larger pattern. Canada is methodically building the kind of trade redundancy that should have existed long before now. New partners. New routes. New terms negotiated from a position of necessity, yes, but also from a position of genuine resource wealth that the rest of the world is increasingly eager to access.

That's not a country that hasn't been harmed. That's a country that took the hit, absorbed it, and started building something different.

With respect, Mr. Ambassador, that's worth knowing.

📋 What We're Watching

• Hormuz shipping premiums and their effect on Canadian heavy crude differentials

• Gold, silver, and critical mineral price trajectories and which Canadian producers are best positioned

• GM's Canadian closure timeline and downstream supplier impact

• Arctic infrastructure spend, what C$32 billion actually builds, and on what timeline

• The Carney-Beijing EV and agricultural deal and whether it survives Washington's next policy swing

• Corporate relocation activity, which companies are eyeing Canadian operations next, and where they're landing

• Canadian export diversification, which new markets are absorbing the volume the US is no longer taking

// NOTES FROM THE NORTH

The US caught us with blindside check behind the play. We didn’t see it coming, we didn’t have the puck, heck, we might have even been looking to the bench for a line change… Then… BLAM!

It hurt.
It still hurts.

We had a walk down the tunnel, a chat with the trainer and we’re back on the bench. Ready to play.

I’m good coach. Next shift, go!

Our two national sports are as full contact as they come.
Hockey in the Winter, Lacrosse in the summer.

Heck, we designed a game where you can commit violent crimes and it has a jail built into the playing surface.

We’re raised to take hits and stay in the game. We’ve categorized them into two kinds, clean hits and dirty hits. You forget the clean hits, well played.

The dirty hits, they get remembered by the whole team and always by the fans.

We’re almost loved globally, and where we’re not loved, we’re at least respected.

Thanks to to the global mess our neighbour has created, we’ve got a lineup of new business.

Canada just set its Linkedin Profile picture to “OPEN FOR TRADE”.

-Lee

“And I suggest you let that one marinate.” - Letterkenny