Trumps threatens tariffs on Canada - again

Frequency Podcast Network. Stories that matter. Podcasts that resonate. Here we go again. In a dramatic ramping up of his trade war against this country, President Donald Trump signed orders this week to impose a 50% tariff on Canadian wine and dairy products and a somewhat random list of hundreds of goods, from hockey sticks to cement,

down for stuffing pillows, even Christmas ornaments. The Trump administration has justified the new tariffs as a mean to punish what they labelled Canada's discriminatory treatment of the U.S. dairy, alcohol and auto sectors, though the threatened levies do not include vehicle or auto parts. Oil, gas, potash, fish and critical minerals were also left off the list. The tariffs imposed under a legally untested Tariff Act authority don't take effect until next month,

providing both sides a chance to come to a resolution, with a 30-day clock now ticking. I'm Karen Siolan, and today on The Big Story, I'm speaking with Joseph Steinberg, a professor of economics at the University of Toronto. Now keep in mind, we are chatting through Toronto's storm, which caused some connectivity issues,

so we do apologize for the sound quality on today's episode. We will discuss whether Canada should be making compromises, and if the Prime Minister can negotiate without escalating. Professor Steinberg, it's a pleasure to be speaking with you.

Thanks so much for making the time for The Big Story. Thanks for having me. So in a surprise move, the President signs three proclamations to impose new 50% tariffs on hundreds of Canadian goods.

Why now do you think? We know that this is coming three weeks after, you know, the Trump administration said it would not extend Kuzma in its current form. What role does the timing play in this?

Do you think this is just a negotiating tactic? I think there are three reasons for this specific timing. So number one, I think you're right. this is part of the Trump administration's efforts to get Canada to budge a little bit

in the direction it wants in the ongoing discussions around how to modify and renew KUSMA. You know, the Trump administration's perspective, rightly or wrongly, is that we have not been willing to put enough on the table. I think that this is their, you know, one of their ways of trying to get us to do that. Number two, you know, there's an important deadline coming up

on Friday. So Friday, July 24th, the current 10% global tariff that the president enacted about back in February, shortly after his original global tariff was ruled unconstitutional by the Supreme Court, that replacement expires on Friday. And so the Trump administration is going to have to go through some work to try to resurrect his global tariff agenda

through some alternative mechanisms. We've already seen some of that come to fruition through these tariffs related to so-called forced labor allegations. A number of countries are getting hit with tariffs related to that, but it could be that this is part of just trying to bring back up the baseline tariff level a bit. The third reason that I think this timing makes

sense for the president is that, you know, it may well be that they've had these Section 338 tariffs in their back pocket for a number of weeks and that they decided this week was right just because of the, I think, kind of deterioration in goodwill between Canada and many of its kind of allies in northern states in the U.S. around the wildfire smoke

issue. It may be that he felt this week he might get less domestic pushback. Yeah, it is certainly like a very strange list of products now that's now that are now facing, you know, a potential 50 percent tariff. You know, in your estimation, is this about sort of ramping up the pressure then on us and an attempt by the Americans to find out, I suppose, just how

serious we are about negotiating and trying to get us to avoid us from dragging our feet until the terms. I think it is. I think that's probably the right way to look at this. That said, I think, you know, it is maybe worth mentioning that there were three separate proclamations Monday night. One, a response to our, you know, failure to live up to at least the spirit, if not the letter of our,

you know, agreements or commitments to them around how to allocate the dairy import quotas. So the tariffs on the dairy proclamation Monday night are actually just limited to our own dairy products, more or less. Similarly, there's a proclamation related to the provincial alcohol embargoes. The tariffs listed in the annex to that announcement are all related to our own alcohol products, more or less.

But then there is the auto tariff. their statement around auto retaliation. And so there, that does include a whole wide range of goods that kind of seem more or less random, to be quite honest. My view is the reason for that is they can't really, they don't want to levy more tariffs on top of autos. Autos are already getting

hit by the sectoral tariffs that have been in place for more than a year now. These new 50% tariffs don't stack on top of the pre-existing sectoral tariffs. And so they kind of had to find something else to hit us with in order to, you know, respond to their, you know, quote unquote allegations around our discrimination on American autos.

But, you know, I think overall your assessment is right, though, that this is in large part not, you know, not about targeted retaliation, genuine retaliation for measures that we have put in place, but more about trying to find a way to bring us to the table in the way that they would like. What would be, I suppose, the economic impacts in Canada if those tariffs are actually imposed,

the tariffs on the dairy products, the alcoholic products, as well as that random list, Like the initial estimate of goods impacted by these tariffs is roughly right now around 5% of the country's exports to the U.S. Can you put that number into perspective for us? Like what would be the economic impact or is this more of a symbolic move?