Tariffs, Canada and Behavior Economics
The first time I heard about Behavior Economics was during the 2008 recession, until then I used the theory, but did not know what it was. Today, I hold a Master’s in the field with a thesis in “How Music Influences the Purchase Preferences and Irrational Behavior”.
Now, as always, I don’t care about the politics on the topic, but I love the behavior behind the reasons.
When all your options are bad, you take more risk [ Daniel Kahneman Nobel prize 2002]
Put vodka in my lemonade
How many times have you heard “ if you have lemons, make lemonade” well, Canada is putting vodka in it and making a party with it.
Some experts predict that countries like Canada, would run asking for a pardon and permission from the US, but no, they chose to make their own economy stronger, and it is working.
Numbers, so don’t shoot me
At this point you already have an opinion about this article, the content and myself. Be my guess, but if you want to know how crises are opportunities, keep reading.
- Empty shelves show consumers are responding with strong preferences for Canadian products.
- Canada, played this in a strong arm, and others are following.
Let’s read what the economists are saying.
Goldman Sachs estimates that the US could face a $90 billion hit to its GDP in 2025 due to factors including rising anti-US sentiment, which is causing a decline in foreign tourism and international trade.
This is partly attributed to the impact of tariffs and other diplomatic provocations, leading to boycotts of American products and travel by consumers abroad.
Goldman Sachs’s Prediction
Goldman Sachs predicts a significant economic downturn for the US, potentially losing around $90 billion in GDP due to a combination of factors.
Foreign Tourism Decline:
International arrivals by air have dropped sharply, impacting the US services surplus which relies heavily on foreign visitor spending.
Anti-US Sentiment:
Rising anti-US sentiment, fueled by factors like President Trump’s policies and tariff threats, is causing consumers around the world to boycott American goods and travel.
Impact on GDP:
This decline in foreign tourism and trade is estimated to reduce US GDP by approximately $90 billion.
Geopolitical Tensions:
Rising geopolitical tensions and stricter border enforcement are also contributing to the slowdown.
Now to what I do know
It is a formula I love to use.
Kurt Lewin, a distinguished psychologist, proposed a concise but significant formula for elucidating human behavior: B = f(P, E). This equation postulates that behavior (B) is a function (f) of the individual (P) and his or her environment (E).
Kurt Lewin (1890–1947) was a German-American psychologist, widely recognized as a pioneer of social, organizational, and applied psychology.
Meaning you can manipulated behavior, manipulating the enviroment.
And crisis is money for the right strategist government.
Canada utilises the anger and feelings of its people to strengthen the economy, and so far, it is working.
On March 10, the roughly 2,400-store Loblaw Companies Ltd. in Canada declared its intention to apply the ‘T’ label on US-imported products that would have experienced a price hike due to tariffs. Over the past month, the warning labels have been gradually introduced, and consumers have become aware of them and are making appropriate purchases.
76% of Canadians have boosted their purchases of locally created and sourced items in recent weeks, according to a Leger poll conducted on April 17. This is the greatest % of respondents who have shown a desire to purchase Canadian goods since the market research firm started monitoring the trend in mid-February.
“All the grocery stores now have Canadian and American labelled produce — and the Canadian produce is always gone,”
Heuristic in this situation
Labeling: no literally, labeling the “enemy”. The enemy of my enemy is my friend. Governments are getting together to fight the US.
Loss aversion: People don’t see the possibilities for the near future about the situation, if the US position has a meaning, it is not well informed.
Misinformation: Studies done in 2012 show that when you give a person the wrong information or mislead information, they will look for narrative to prove to themselves they are right.
Wagon effect: If everyone is doing it, I will do it, too. Meaning, if everyone is ditching the US as destination, let’s discard that destination, too.
In the context of pop culture, the TV character Hal from “Malcolm in the Middle” says, “Communities seek out a common enemy. If it wasn’t us, they’d all team up against someone else”
Conclusion:
Every crisis has possibilities. The Chinese word for “crisis” is 危机 (wēijī). While often misinterpreted as “danger + opportunity”, the literal translation of the characters is “danger” (危, wēi) and “turning point/critical moment” (机, jī). This means a crisis is a critical moment or a dangerous turning point.
Canada is growing, the local products are sold out. This is creating an internal economy that will make the Canadian market stronger than ever.
The unity of other countries can cause a HUGE dump for the US.
The information given to people is manipulated based on each party’s position and gain.
Regardless of your political position; it is yours to keep; but not reading between the lines can lead to all the countries falling into a depression.
How many products can a country consume? Countries require the exchange of products through export and import.
However you want to take this article, it is ok. Just try to see things from a wider window.
I don’t lean toward any of the positions, I analize data, human behavior and irrational feelings.
And that is the danger of this situation: everyone is yelling, and nobody is listening.
What if nobody is right, what if nobody is wrong?
Would you like to know how the information and studies in this article can help you, your team and the products you sell? Contact Kim Olesker — Chief Business Officer to explore which training or consulting is better for you — kim@susanibitz.com -219–343–2255 Ext 102.
About the author:
Susan is a former political influence consultant, profiler, and civilian hostage negotiator, with expertise, studies and Master’s in Human Behavior, Behavior Economics, Neuroscience and a nerd for data. Susan works on the humans that grow your business | High-performance Human Behavior training- I teach corporations & employees how to hack into humans using Behavior, Neuroscience & Persuasion |Behavior Economics
She has been called Freaky and the top expert on her field, by the Chicago Tribune and Psychology Today, by showing how to profile anyone in 30 seconds.
She is the author and researcher of “Irrational Humans. People Make 35,000 Decisions a Day and 95% are Irrational, but Why & How?”
Topics:
- Body Language
- Micro Expressions
- Behavior Economics
- Neuroscience
- Consumer Behavior
- Persuasion
- Influence
- Behavior Science
- How people make decisions
- Irrational Behaviors
