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How serious are Trump's latest tariff threats · INSIGHT TODAY

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  Speaker 1: US President Donald Trump defended his economic priorities at a
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  Speaker 1: stop earlier today in Michigan, an economy that relies heavily
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  Speaker 1: on Canada and a state that could be hit hard
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  Speaker 1: by Trump's latest tariff threats. Last week, the US Administration
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  Speaker 1: levied a fifty percent tariff on billions of Canadian goods
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  Speaker 1: that they say will take effect on August nineteenth. For
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  Speaker 1: more on the impact of this next wave of tariff,
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  Speaker 1: Justin Wolfers is a professor of public policy and economics
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  Speaker 1: at the University of Michigan and joins me nowt Justin,
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  Speaker 1: I subscribe to your newsletters as reading YOURSELFF last week,
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  Speaker 1: and you also did an appearance. We talked about the
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  Speaker 1: fact that there's no such thing as a deal with
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  Speaker 1: the US because the president doesn't keep his word. He
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  Speaker 1: makes a deal and then says something else needs to
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  Speaker 1: be added to it. With that in mind, how do
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  Speaker 1: you think Canada should navigate any of this when thinking
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  Speaker 1: about trying to make a trade deal.
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  Speaker 2: Yeah, I think actually, let's actually talk about a different
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  Speaker 2: conic deal. But it's a simn economics, which is, let's
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  Speaker 2: think about marriage. Now, you know a lot of people
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  Speaker 2: when they get married that's for better, for worse, and
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  Speaker 2: sickness and in.
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  Speaker 3: Health till death to his part. And what happens when
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  Speaker 3: you get married.
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  Speaker 2: You've got that guarantee that you and your partner are
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  Speaker 2: going to be together forever. So you really mix your lives,
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  Speaker 2: you intermingle them, you find every way that you can
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  Speaker 2: support each other and enrich each other's lives. That's one model,
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  Speaker 2: and that's how we used to think about trade deals. Now,
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  Speaker 2: let me tell you about a different kind of bloke.
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  Speaker 2: There are some people out there who get married, then
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  Speaker 2: get divorced, and then get married and then see a
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  Speaker 2: shielder out in the side of their eye, and then get divorced,
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  Speaker 2: and then they get married, and they get divorced, and
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  Speaker 2: after they've been married a few times, certainly the next
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  Speaker 2: person that bloke meets is sort of going to realize
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  Speaker 2: this is not a bloke who keeps his promises. As
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  Speaker 2: a result, you're going to end up with a different
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  Speaker 2: sort of marriage. It's going to be more transactional marriage.
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  Speaker 2: You're not going to get deeply embedded in each other's lives.
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  Speaker 2: And I think that's the problem. That's where we are
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  Speaker 2: with the president right now, which is Canada was serious
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  Speaker 2: about a deep marriage. That's what NAFTA was, and the
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  Speaker 2: good faith reenactment of COSMA. The problem is that you're
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  Speaker 2: dating the wrong bloke right now and he's not shown
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  Speaker 2: that track record of reliability.
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  Speaker 1: He hasn't, but the deal largely has. I mean, Kuzma
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  Speaker 1: still defends Canada against the worst part of these terrorists
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  Speaker 1: because everything that is mostly everything that is KUSMA compliant
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  Speaker 1: is not applied. I guess how do you square those
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  Speaker 1: two when you think about we're supposed to be intensifying
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  Speaker 1: talks with the US right now, how should those negotiators
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  Speaker 1: be thinking about how to approach this particular administration.
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  Speaker 2: Yeah, so it's worth remembering the whole history of this
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  Speaker 2: recall of you know, COSMA was in pretty good shape
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  Speaker 2: when we entered the second Trump administration. After all, it
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  Speaker 2: was a deal that some bloke called Trump negotiated. The
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  Speaker 2: first thing that Trump did was he put ventanyl tariffs
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  Speaker 2: on Canada despite the fact kind of that doesn't really
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  Speaker 2: have much ventnyl.
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  Speaker 3: There was no carve.
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  Speaker 2: Out there for COSMA compliant goods. That was just we're
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  Speaker 2: going to wake you over the head. So that was
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  Speaker 2: the first you know, if we want to go back
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  Speaker 2: to the marriage analogy. That's the first time the bloke
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  Speaker 2: cheets and he got caught. But you're right, he sort
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  Speaker 2: of came back and he sort of felt bad about it,
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  Speaker 2: and he said, I tell you what, We're going to
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  Speaker 2: whack you with all these tariffs except if you're a
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  Speaker 2: Cosmo compliant. And by the way, they didn't do that
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  Speaker 2: for anyone else, right, they didn't do it for the Aussies,
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  Speaker 2: or the South Koreans or the bridge just this nice
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  Speaker 2: car about. So the Canadians were doing something really well
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  Speaker 2: until last week.
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  Speaker 3: This new fifty percent tariff.
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  Speaker 2: It's one that says, you know what, We're going to
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  Speaker 2: go at you, even if it's Chrisma compliant. So that's
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  Speaker 2: the thing that I think is a whole new phase
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  Speaker 2: in the trade ward.
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  Speaker 1: Now.
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  Speaker 2: The funny thing, by the way, is the President then
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  Speaker 2: put a ten percent tariff on every country around the world,
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  Speaker 2: including Canada except for once again Cosmo matters.
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  Speaker 3: So Cosmo matters except when it doesn't.
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  Speaker 1: So the question, I guess is, if these tariffs on
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  Speaker 1: August nineteenth go ahead, how should we respond. And you
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  Speaker 1: had a great analogy for this that tariffs are like
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  Speaker 1: what did you call it rocks in the harbor and
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  Speaker 1: it might mess up their stuff. But why they make
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  Speaker 1: your open because I think it's a it's a valid one.
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  Speaker 2: This is, by the way, it's not mine argument. It
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  Speaker 2: belongs to the great Joan Robinson, who's one of the
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  Speaker 2: great unherald geniuses of economics. Obviously she's dead many decades now,
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  Speaker 2: but she basically said, look, if some other country puts
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  Speaker 2: rocks in their harbor, and I want to be clear
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  Speaker 2: on the analogy, when you put rocks in your harbor,
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  Speaker 2: you make it harder for boats to go in and out.
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  Speaker 2: You make it harder for trade. So rocks in the
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  Speaker 2: harbor is if the US puts rocks in its harbor,
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  Speaker 2: that's what tariff's are. The US put rocks in this
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  Speaker 2: harborb If the US puts rocks in its harbor, why
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  Speaker 2: would it make sense for Canada to put rocks.
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  Speaker 3: In its harbor. The first people who are going to
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  Speaker 3: be hurt by.
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  Speaker 2: Canada putting rocks in its harbor are the Canadians. So
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  Speaker 2: this is the economic argument that yes, the president is attacking,
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  Speaker 2: but understanding the retaliation is going to hurt the Canadian people.
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  Speaker 2: And so the argument for trading is simply trading is
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  Speaker 2: good for Canadians on its face. I want to recognize
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  Speaker 2: that's an economic argument. Now, I've got a whole lot
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  Speaker 2: of friends who are a lot more political than me,
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  Speaker 2: and they think about global strategy and things like that,
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  Speaker 2: and they say things like, you know, if every time
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  Speaker 2: I punch you in the mouth, you just stand there
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  Speaker 2: and take it, I'll just keep punching you in the mouth.
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  Speaker 3: So that's the counter argument.
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  Speaker 2: But I do want folks at home to really understand
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  Speaker 2: the argument for trade really does say it's in Canada's
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  Speaker 2: best interest to even just to import, even if it
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  Speaker 2: weren't able to export. So, you know, to Prime Minister Karne,
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  Speaker 2: be thoughtful. Do you really want to punch the Canadians
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  Speaker 2: in the mouth.
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  Speaker 1: And I don't think we do a good enough job
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  Speaker 1: in this country of talking about the pain that has
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  Speaker 1: been caused to American companies and American workers buy American tariffs.
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  Speaker 1: You know, the opening of this bridge is great and
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  Speaker 1: it's fantastic news for Canadian trade, but the delay of
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  Speaker 1: it hurt American companies. The imposition of these these new
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  Speaker 1: set of tariffs are going to hurt American companies. And yeah,
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  Speaker 1: some of its hockey sticks, but some of its cement
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  Speaker 1: that is crucially important to building the factories that Donald
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  Speaker 1: Trump says he wants to do. How important is it
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  Speaker 1: to let the damage of the tariffs happen and exist
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  Speaker 1: and just sort of point to it and say that's
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  Speaker 1: the problem here?
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  Speaker 3: Not our response, Yeah, I did you know.
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  Speaker 2: I look very close to that bridge, and my neighbors
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  Speaker 2: are big part of Canadian US trade and it really
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  Speaker 2: affects my part of Michigan.
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  Speaker 3: We're very close to the border.
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  Speaker 2: The hard issue is it is true the president is
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  Speaker 2: hurting Americans, the president is also hurting Canadians. And with
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  Speaker 2: your audience, I want to be very clear, you are
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  Speaker 2: feeling the pain, but we are also feeling the pain because,
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  Speaker 2: for instance, the steel and aluminum tariffs make it so
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  Speaker 2: that US factories are the only ones in the world
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  Speaker 2: that have to pay fifty percent more for stile and
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  Speaker 2: an aluminum. It's actually really really hurting not just American businesses,
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  Speaker 2: but also American consumers.
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  Speaker 3: Let me just say a couple of things. One that.
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  Speaker 2: The president is not winning the argument. The president is proceeding,
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  Speaker 2: but if you look at public opinion polls, he's lost
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  Speaker 2: the argument with the American people. They don't like his tariffs. Two,
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  Speaker 2: what do I to advise Prime Minister Carnei of anything?
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  Speaker 2: I think actually just laying out the facts even a
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  Speaker 2: little more clearly to the American people about the many
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  Speaker 2: ways they've lost. They've lost wine sales, they've lost tourism,
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  Speaker 2: there's lost higher education, they've lost a war on the
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  Speaker 2: cusp of loversing some part of the auto sector that
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  Speaker 2: lies in the northern part of the United States. We
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  Speaker 2: got a pretty big dog in this fight too.
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  Speaker 1: And yet even though Donald Trump is losing on a
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  Speaker 1: lot of those fronts, as you say, he's not changing
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  Speaker 1: his argument. And we still got I think it's nine
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  Speaker 1: hundred and twelve days left of Donald Trump in this term.
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  Speaker 3: What do we do?
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  Speaker 1: And there are people who say, wait it out, make
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  Speaker 1: a deal with whoever is the president in twenty twenty eight.
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  Speaker 1: That seems like a long time for as you say,
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  Speaker 1: those companies that really are hurting as a result of this.
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  Speaker 2: Yeah, so I'm not really a political strategist, so what
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  Speaker 2: do he do is beyond my pay grade. But look,
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  Speaker 2: one thing we have seen that works, And don't tell
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  Speaker 2: any anyone south of the border.
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  Speaker 3: I told you this.
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  Speaker 2: But if you give the president a press conference and
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  Speaker 2: he gets to announce something, but you never get around
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  Speaker 2: as signing a deal, he sort of tends to get
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  Speaker 2: bored and walk off and leave you alone. That's probably
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  Speaker 2: a pretty good idea here. The one thing you don't
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  Speaker 2: want to do is do it deal where Canada's doing
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  Speaker 2: a lot of costly investment up front, because I reckon,
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  Speaker 2: if you do a deal, there's a pretty good chance
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  Speaker 2: that the president wakes up again and undoes the whole
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  Speaker 2: thing within a few weeks from here. So you know
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  Speaker 2: the BLOGI likes pomp and ceremony, giving the pomp and ceremony,
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  Speaker 2: but you might just have to wait it out for
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  Speaker 2: the next president.
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  Speaker 1: One of the things that keeps happening, and it happened
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  Speaker 1: again last night just before Asian markets opened up, is
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  Speaker 1: they announced they're going to continue with talks, and that
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  Speaker 1: brought the oil prices down. And it works to a
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  Speaker 1: certain extent, but it just adds to this volatility and
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  Speaker 1: these uncertainties. How much you know, uncertainty on day one
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  Speaker 1: is bad. Uncertainty on day I don't know how many
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  Speaker 1: days we're into the the Iran war. It's a compounding figure.
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  Speaker 1: How difficult is that uncertainty weighing on the whole North
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  Speaker 1: American economy.
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  Speaker 3: Right now enormously.
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  Speaker 2: So look, let's just bring it back to something light
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  Speaker 2: because I heard a funny joke I want to share
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  Speaker 2: with you. You remember the old days of the taco
• 8:59
  Speaker 2: t Trump always chickens out. They're now talking about Nacho's
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  Speaker 2: here never again, can hall moves open? That's you know,
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  Speaker 2: it's dark humor, because it really is harming. Not in
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  Speaker 2: fact that harms in the US, far less than many
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  Speaker 2: of our neighbors, not Canada, because we actually produce energy
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  Speaker 2: as does Canada. But you know, consumers on both sides
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  Speaker 2: of the border are definitely feeling it at the pump
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  Speaker 2: right now, this tremendous degree of uncertainty.
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  Speaker 3: But I think it's actually worse than that.
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  Speaker 2: I just want to remind you as much as my
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  Speaker 2: friends nor that the border are worried about, you know,
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  Speaker 2: these very very big issues south of the border, we're
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  Speaker 2: even worried about simpler things like can we and will
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  Speaker 2: we have free and fair elections?
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  Speaker 3: The stakes here are pretty big.
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  Speaker 1: Indeed they are. And just before I let you go,
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  Speaker 1: given those steaks and given on the one hand, We've
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  Speaker 1: seen some progress. The bridge opened, isn't that great. On
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  Speaker 1: the other hand, we're seeing more more terrorists potentially added
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  Speaker 1: on on August and eighteenth. Just zoom out for me,
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  Speaker 1: what is your sense of optimism, sense of anxiety? Where
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  Speaker 1: are you at in terms of the Canada US trade relationship?
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  Speaker 3: Oh?
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  Speaker 2: Mate, One of the reasons you don't see any worry
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  Speaker 2: lines here is because I understood just how worried I
• 10:10
  Speaker 2: would be, so I went and got botox, and so,
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  Speaker 2: you know, try and make long term plans so the
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  Speaker 2: worrying doesn't get to you too much.
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  Speaker 3: Is sort of what I'm saying there.
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  Speaker 2: You know, I think there's very, very real reasons to
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  Speaker 2: be concerned about the future of that relationship. I think,
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  Speaker 2: you know, some deep level Canada has more options than
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  Speaker 2: some of us in the US, because you know, I
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  Speaker 2: think Carni, the Middle Powers approached things like that. You
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  Speaker 2: guys can be pretty sure you're gonna have elections. So
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  Speaker 2: it's it's a tough.
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  Speaker 1: Moment, mate, Listen, We're gonna have to leave it there.
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  Speaker 1: But I always appreciate her and say, Justin Wolfers with
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  Speaker 1: the University of Michigan, thank you so much.