Latest / INSIGHT TODAY / Trump raises tensions with Canada by announcing new 50 tariffs

Transcript

Trump raises tensions with Canada by announcing new 50 tariffs · INSIGHT TODAY

• 0:00
  Speaker 1: The Troup administration is imposing a new round of tariffs
• 0:02
  Speaker 1: on Canada, accusing the country of unfairly discriminating against American autos,
• 0:07
  Speaker 1: dairy products, and alcohol. The fifty percent tariffs would cover
• 0:11
  Speaker 1: some twenty billion dollars worth of Canadian imports on goods
• 0:15
  Speaker 1: ranging from cement to hockey sticks. They're set to take
• 0:18
  Speaker 1: effect in thirty days. In the Oval Office today, President
• 0:21
  Speaker 1: Trump defended the move.
• 0:23
  Speaker 2: Canada has been very, very tough on us over the years,
• 0:27
  Speaker 2: for many years, and no other president's done anything about it.
• 0:31
  Speaker 2: I love Canada, I love the people of Canada, many
• 0:34
  Speaker 2: friends that live in Canada, but my dad leadership, from
• 0:37
  Speaker 2: Trudeau to the current leadership, I mean, in all fairness
• 0:42
  Speaker 2: to them, they need us to survive. Without us, there's
• 0:46
  Speaker 2: no way they can survive.
• 0:48
  Speaker 1: Canadian Prime Minister Mark Carney pledged to intensify talks with
• 0:51
  Speaker 1: the US in the coming weeks in hopes of reaching
• 0:54
  Speaker 1: a deal. We're joined now by Natasha Sarin, co founder
• 0:57
  Speaker 1: of the Yale Budget Lab. Welcome back to the program.
• 1:00
  Speaker 3: Thanks for having me.
• 1:02
  Speaker 1: So how significant would these tariffs be, these fifty percent
• 1:05
  Speaker 1: tariffs be if they take effect in thirty days, not
• 1:08
  Speaker 1: just for Canada, but for US businesses and consumers.
• 1:13
  Speaker 3: Yeah, The important thing to understand about these tariffs, to
• 1:16
  Speaker 3: put them in some context, is they cover about five
• 1:20
  Speaker 3: percent of imports from Canada, and so they're hugely important
• 1:25
  Speaker 3: to the particular product lines that we're talking about here
• 1:29
  Speaker 3: my colleagues. At the budget lab estimate, that's about five
• 1:32
  Speaker 3: hundred and fifty of them, things like dairy alcohol, hockey sticks,
• 1:37
  Speaker 3: as you mentioned. But in the aggregate picture of our
• 1:40
  Speaker 3: trading relationship with Canada, this is one particular sliver. It
• 1:45
  Speaker 3: would drive up the effective tariff rate with Canada quite significantly,
• 1:50
  Speaker 3: in part because the tariffs are being levied at such
• 1:53
  Speaker 3: a high rate. You're talking about on a narrow base
• 1:55
  Speaker 3: of products, the fifty percent tariff, that is very consequential,
• 2:00
  Speaker 3: but it's not covering the swath of everything that we're
• 2:03
  Speaker 3: importing from Canada.
• 2:05
  Speaker 1: So this high tariff rate on a narrow base of products.
• 2:09
  Speaker 1: Is there reason to believe that these tariffs never take effect,
• 2:12
  Speaker 1: that this is all just designed to negotiate a deal,
• 2:16
  Speaker 1: you know?
• 2:17
  Speaker 3: It's the effective tariff rate in the US has changed
• 2:22
  Speaker 3: some sixty plus times in the second Trump administration, and
• 2:27
  Speaker 3: that's just counting tariffs that actually went into effect, not
• 2:31
  Speaker 3: the fact that we've seen a lot of announcements about
• 2:35
  Speaker 3: future activities with respect to our trading partners that were
• 2:39
  Speaker 3: ultimately rolled back or changed in the process of negotiating.
• 2:42
  Speaker 3: And so obviously this is a very active and live conversation. Obviously,
• 2:47
  Speaker 3: the administration was very clear about giving themselves a delay
• 2:51
  Speaker 3: of thirty days with respect to the implementation of these
• 2:54
  Speaker 3: tariffs in order to continue talks with Canada. But I
• 2:58
  Speaker 3: think in some sense one shouldn't comfort in the fact
• 3:02
  Speaker 3: that you might not actually see tariffs at this level
• 3:06
  Speaker 3: on these swath of products implemented because the volatility of
• 3:11
  Speaker 3: the trading environment. The fact that if you are someone
• 3:15
  Speaker 3: who is importing some of these goods from Canada, you
• 3:18
  Speaker 3: have no idea essentially what the trading environment is under
• 3:22
  Speaker 3: which you're going to be bringing goods into this country
• 3:25
  Speaker 3: in just a few weeks makes it really really challenging
• 3:29
  Speaker 3: to try and run businesses, and really really difficult from
• 3:32
  Speaker 3: the perspective of the American consumer who is seeing as
• 3:35
  Speaker 3: a result of this volatility and increase in the prices
• 3:39
  Speaker 3: that they're paying.
• 3:40
  Speaker 1: When the Administration says that Canada has unfairly discriminated against
• 3:44
  Speaker 1: American products. That's the argument they're making. How strong is
• 3:47
  Speaker 1: that case.
• 3:49
  Speaker 3: You know, one thing that I think it's really important
• 3:52
  Speaker 3: to sort of clarify a bit is the timing of
• 3:57
  Speaker 3: the alleged in a pro practices on behalf of Canada
• 4:03
  Speaker 3: with respect to our products. A lot of what is
• 4:07
  Speaker 3: happening in this context is there's frustration in the United
• 4:10
  Speaker 3: States or amongst some administration officials that Canada has actually
• 4:15
  Speaker 3: retaliated to increase tariffs by US on Canadian imports over
• 4:22
  Speaker 3: the course of the last year and a half. And
• 4:24
  Speaker 3: so a lot of the practices you're talking about, particularly
• 4:28
  Speaker 3: in sectors like alcohol, they are about retaliatory measures that
• 4:35
  Speaker 3: were taken once the United States undertook this trade war.
• 4:39
  Speaker 3: And so it seems a little sort of hard to
• 4:42
  Speaker 3: make the argument that we're as a result of the
• 4:45
  Speaker 3: fact that there have been prior tariffs that we've levied
• 4:48
  Speaker 3: against them that have prompted these retaliatory actions, you're then
• 4:52
  Speaker 3: going to see another swath of tariffs instituted. And that
• 4:56
  Speaker 3: makes it challenging because it's kind of like a never
• 4:58
  Speaker 3: ending cycle with respect to escalation in ways that make
• 5:02
  Speaker 3: it difficult to see what the pass.
• 5:04
  Speaker 1: Forward actually is challenging and confusing. To be sure, there
• 5:08
  Speaker 1: are viewers who will watch this conversation and they might wonder,
• 5:11
  Speaker 1: didn't the US Supreme Court strike down the Trump administration's
• 5:15
  Speaker 1: tariff regime, and they would be right, So what's what's
• 5:18
  Speaker 1: the yeah, So what's the legal authority that the administration
• 5:21
  Speaker 1: is using for this?
• 5:23
  Speaker 3: That's such a good question. And the way I've been
• 5:25
  Speaker 3: describing the nature of the administration's actions in the aftermath
• 5:29
  Speaker 3: of the Supreme Court decision in February is that they're
• 5:32
  Speaker 3: certainly in keeping with the text of the ruling, since
• 5:35
  Speaker 3: the case was about one particular authority, the International Emergency
• 5:40
  Speaker 3: Economic Powers Act, that the administration was using to impose
• 5:44
  Speaker 3: these broad based tariffs. But they're not in keeping with
• 5:47
  Speaker 3: kind of the spirit of that ruling, which made clear
• 5:51
  Speaker 3: that the power to tax and impose these types of
• 5:54
  Speaker 3: wide ranging tariffs on allies and adversaries alike is a
• 5:58
  Speaker 3: power that rests with Congress and cong alone. And so
• 6:01
  Speaker 3: ultimately we are going to see these new authorities that
• 6:04
  Speaker 3: the administration is deploying to kind of patchwork together. It's
• 6:08
  Speaker 3: all trading practices. We are going to see those legally challenged,
• 6:12
  Speaker 3: and a bunch of those cases are already making their
• 6:15
  Speaker 3: way up to the Supreme Court, and ultimately it'll be
• 6:18
  Speaker 3: for the Court to rule and decide whether or not
• 6:20
  Speaker 3: that type of broad based power exists from these other laws.
• 6:24
  Speaker 3: But I speculate that their answer is unlikely to be yes,
• 6:27
  Speaker 3: given that this set of authorities. That's with Congress.
• 6:30
  Speaker 1: Natasha Sarin, co founder of the Yale Budget Lab, Always
• 6:33
  Speaker 1: good to speak with you. Thanks, thanks so much.