In an interview on Power & Politics, (David Paterson, Ontario’s representative in Washington) told host David Cochrane that the Canadians and Americans had a 90-minute meeting and the first half-hour was “a master class” from Lutnick in breaking down the U.S. position on tariffs.
The focus of the U.S. government is dealing with its yearly deficit in federal spending, Paterson said. According to the U.S. Treasury Department, the federal government ran a $1.83 trillion US deficit in the 2024 fiscal year.
There are three ways the U.S. government is working to cut down that deficit, Paterson added.
The first is a major budget resolution that calls for billions of dollars in tax cuts, and the second is slashing the size of government through Elon Musk’s Department of Government Efficiency. The third is tariffs, which are meant to be a new revenue source and attract investment into the United States.
This sounded off to me, but maybe everything does. Another off-sounding idea I’ve heard: Gillian Tett, an editor and columnist at the Financial Times, seems to think there’s a good chance Trump wants to hyperinflate the US dollar so he can somehow set more favourable repayment terms, when time comes due for them to renegotiate. I expect that would lower their credit rating even more but I guess Trump in that scenario doesn’t care about that.
Normally I’d say it’s possible for people who have been through failure (in his case, bankruptcy) to know things that more successful people don’t, but whatever logic he has is overruled by his apparent narcissism so it’s hard to be sure if what he thinks he’s going to accomplish has some basis in reality.