Fight back or back down: How should Canada respond to Trump tariff threat? | Power & Politics

[00:00:00]US President Donald Trump is threatening a new 50% tariff on 28 billion dollar worth of Canadian goods. It comes as the premers gather in Charlotttown where they'll meet face to face with Prime Minister Mark Carney later this week.

[00:00:13]So, how do they think Canada should respond? Well, that depends on which premier you ask.

[00:00:19]>> If these talks fail in 29 days, we need to hit them back as hard as we can. I'm tired of the bully trying to take our lunch money all the time. We always seem to be on our back heels. We need to be on the offense.

[00:00:34]>> The ultimate goal isn't to uh counter tariff and and further weaken the the North American economy. The ultimate goal is to get to a renewed agreement uh a trade agreement that is going to build and ensure that our North American economy is more competitive moving forward than maybe it is today with the uncertainty that we're facing. There is not a chance in hell that US alcohol is going back on the shelf in British Columbia. Uh, and I'm proud of that and I know the British Columbombians support that. Uh, and the idea of the president that he can bully us into whatever he wishes is incorrect. It's time now for the power panel. With us today, we've got Michelle Cadario who is deputy chief of staff to former prime minister Paul Martin. Lisa Raid is a former Conservative cabinet minister. Nathan Cullen is a former NDPMP and a BC NDP cabinet minister. and Rob Benzy is the Queen's Power Bureau chief for the Toronto Star. It is good to see you all.

[00:01:26]Hello from beautiful Charlotte Town, Prince Edward Island. Lisa, I'm going to start with you cuz you sent me a text on June 23rd, nearly a month ago. Have you read up on section 338 terrorists? New ones, never use the worst of them. And here we are.

[00:01:44]So, are you collaborating with the Trump administration or are you just really smart? What's your thoughts on where we are now?

[00:01:51]>> I I wish I could actually use that uh as a way to make money in life, but I can't. I just follow very carefully what they're saying in the United States and they started bubbling out with this section 338 stuff probably in May and June. Caught my attention. Candace Lang as well at the Chamber of Commerce in Canada. She noted it too, I think, in a couple of interviews. And it's just because it was swinging for the fences and it makes sense that Mr. Trump would want to try to do something that no other president had done before, especially since he can just put it into effect with an executive order in 30 days later. And the last part, David, he can actually put tariffs on things that aren't being complained about as being discriminatory. So he can say, "You're discriminating against me on booze, but I'm going to tariff dairy as a result, or I'm going to tariff furniture, or I'm going to tariff something else like that." It's a very broad-based kind of tariff that he's using this time.

[00:02:48]Right. And so here we are. And Michelle, the net effect of it is well, he keeps his unprecedented action streak alive.

[00:02:56]This president does, but there's a countdown clock now ticking before they get implemented and an agreement to intensify a negotiation. So could this be the endgame or is this another dead end? What are your thoughts?

[00:03:09]>> Well, you know, I think that there's always a third option with Trump as well, right? like let's not pretend that it's going to be a binary choice about what 29 days from here now means um because who knows what situation we'll be in in two days uh with him and so you know I think uh you know the other thing I'm curious about is did the agreement to intensify talks happen before or after he decided to use these uh these arcane kind of uh never-before used tariffs that he found in some dusty textbook. So um you know all very interesting. I think for sure the government and the prime minister has indicated that they're going to um you know step up the the talks. I don't think that there was ever any kind of slowdown on our part or any kind of unwillingness to talk. I think it's about you know is it going to be substantive?

[00:03:56]>> Are they actually going to be addressing the things on the table or is it just going to be a series of demands um that they're going to make of the government?

[00:04:03]and and I think it's been quite clear, you know, yes, the the premers all kind of um might have had slightly different things to say, but nobody was talking about just bowing down to Donald Trump in any way. Um you know, certainly Premier Mo said that we want to get a deal. Absolutely, we want to get a deal.

[00:04:21]David Eie would would absolutely agree with that. And so I think it's all nuance and uh you know I think that the core mistake that you know Trump [snorts] is making is uh on this booze issue that so drives him crazy clearly is you can put it on any shelf but are Canadians actually going to buy it after this behavior and so it's um but anyways next 30 days are going to be very interesting.

[00:04:46]Yeah, it's interesting, Nathan, on that.

[00:04:48]I I know there is a push kind of running up to the Christmas holidays in some provinces to put booze back on the shelf from the American supply and and the money they made would go to charity. And what I'm told from my my my friends back home in Newf Finland and Labrador is people bought things like bourbon, but the wine and stuff, it's all just sitting there. People have moved on.

[00:05:06]They found new products and and the boycotts are going to still continue. So you you have this uh none of the provinces are backing down on the booze ban and they're all looking at options for how you can retaliate and escalate should this 30-day countdown clock fail.

[00:05:22]What are your thoughts on where we are and what everyone's considering?

[00:05:26]>> Well, for both Americans and Canadians, I hope this is a taco. I hope this is something that Trump will trip Trump will chickenen out of three times fast because this is the nuclear option. Like this act that he's relying upon from a century ago caused a global recession in the middle of a stock market crash. It made everything worse. It dropped global trade by 65%.

[00:05:51]Global trade, not just American trade.

[00:05:53]And who was hurt most were Americans. So if Trump is looking either he's just given up on the midterms like he's just decided we're going to lose, he's tried to rig the map. He's tried to cheat his way through and that's partly working but not fully enough. But he's started a war and he's driving up the cost of living. These are the two things that he came in on saying he wouldn't do. I I the trouble for Mr. Carney. You asked Aaron this. What leverage do we have? As you said, they described the leverage by what they left out of this which is energy and pot ash and critical minerals. Those are the things that have leverage for Canada. What'll be challenging for Carney is if we get to that point, if they actually invoke this thing in 29 days time, Canada's going to need some leverage. Can he keep the premers together and say we're going to have to do some counter tariffs? We're going to have to take some our own pain because making concessions try to get your way to a good deal at the end. I don't know if anyone believes that's possible.

[00:06:53]>> Yeah. I mean, they have spelled out uh what they still need and where they will be vulnerable, but the premers of Saskatchewan and Alberta said, "Don't you dare. These things are off the table." So, this is a challenge, but still, and Rob, I'll bring you in after this because Ontario Premier Doug Ford says Canada should do some of these things and should respond with dollar for-doll retaliatory terror should President Trump act on this new threat.

[00:07:14]And Ford today suggested going much further than that. Have a listen.

[00:07:19]>> That's why we can't roll over. We have to hit back. We have to rather than be on our back heel as I said we have to go forward take the offense. We are an energy powerhouse and we could dismantle the US if we wanted to if we all work together. No matter if it's the electricity and I'm not speaking for the other provinces. I'm going to be very clear. The potach, the oil, we're their number one customer in the world.

[00:07:47]>> So Benzy, uh them fighting words uh from Premier Doug Ford. um that's not quite matched uh let's face it by any other premier here like they want to stand firm but no one is is talking about necessarily going that far and Alberta and Saskatchewan say no way. Just what are your thoughts on where Doug Ford finds himself and how the premers are reacting to it?

[00:08:06]>> Well, I mean I don't I don't think that Mr. Ford uh is has been inconsistent. I mean, remember a year and a half ago, uh, he said the same thing, David, and, um, uh, he Ontario supplies the electricity to 1.5 million Americans in three US states. And Mr. Ford threatened to shut that down. Howard Letic, the Secretary of Commerce, was on the phone so quickly in a panic because Mr. Letic was, you know, a new cabinet member. He didn't realize that that didn't mean the lights would go out in New York City, but he was very scared. And I think they do respond to uh these they do this kind of action. What what what made them angry about uh about uh Doug Ford before the ads the Ronald Reagan ads that the Ontario government ran in the United States that were very effective frankly because they they clearly uh got under uh Trump's skin. Um Mr. Trump is in political trouble domestically. Uh he there's a new yuggov poll out today, David, that he's at 36% approval. He's underwater. Um and uh and gasoline prices have gone up 15% in one week.

[00:09:13]It's now an average of over $4 a gallon in the US. And that's one of those those uh numbers that sticks in people's craw.

[00:09:21]The midterms are going to be unkind to his party, the Republicans. He may not care. He's a lame duck. He's an 80-year-old lame duck who will not be running again in 2028, whatever he says on Twitter. Um, so I think uh he he is flailing and I think I agree with what Jason Kenny was saying earlier on and what our friend David from has said repeatedly. Uh, and Mr. From of course follows uh the scene very closely for the Atlantic in the US. Time is on our side in the sense that we can wait this administration out. It's going to be difficult and there are going to be some sacrifices. the 100,000 hockey sticks that we send to uh to the United States that are made of wood uh that are the ones that are covered in this one made in Brford. That's not good for the company in Brford, Ontario that makes those hockey sticks. That's they're going to need help from the government at and as our other small businesses are going to be wounded by this. But I don't think that uh there's a appetite for capitulation.

[00:10:15]>> Yeah. Yeah. No, there's a lot of small and mediumsiz enterprises that are uh surgically targeted and extremely vulnerable uh from this round of terrorists if they come into effect as 50% even if you're Kousma compliant.

[00:10:25]That that's a devastating level. Look, I I want to get a fresh tape in and this is from Quebec Premier Christine Fchett who spoke moments ago about this idea of cutting off electricity to the United States. The vast hydro resources Quebec controls obviously at play here. Here's what the Quebec premier had to say.

[00:10:40]Would you be willing to cut off any hydroele electricity exports to the US um or any other energy exports to the US?

[00:10:49]>> Personally, I'm not there. Uh I want us to negotiate at the table and uh we'll see in 30 days where we where we will end up. Uh but uh I'm not considering nowadays uh using energy as a retaliatory measure >> nowadays though. So is that it's an option on the table? It sounds like >> not to date. No, it it's not an option for me.

[00:11:15]>> We'll see where we end up at the end of of August.

[00:11:19]>> Okay. Uh so Lisa, that that's Premier Fchett there. Daniel Smith earlier said we don't want our energy uses leverage.

[00:11:25]Scott Mo, uh we got an interview coming up with him. He says the same thing about energy and potachsh. So if the key leverage points that have been identified aren't available to the prime minister without enormous domestic blowback, how do you do it?

[00:11:40]you go back to the table like they were prior to October of last year and exchanging proposals on what we want to accomplish in a comprehensive trade deal. It's not a case where we're threatening one another consistently.

[00:11:54]First principles, David, the United States has made it clear to the world that they are renegotiating every trade deal that they're part of and that part of their toolkit is to have a tariff.

[00:12:03]The question is how much of a tariff does Canada want to pay? we're not going to be able to get what we had expected in terms of KSMA to have free trade on absolutely everything. What's the number going to be? That is the negotiation that we should be having at this point in time. And I think that's the negotiation that Jenna Sheret and that Dominic Leblon are seized with. Quite frankly, let's not let these 29 days go to waste because we're trying to figure out whether or not our premers are going to have a bun fight at the end. I don't like this line of discussion whatsoever.

[00:12:35]Let's focus. And those small and medium companies, they're not going to hang around waiting to figure out whether or not we can hold on for another three years of Donald Trump. They're going to make their decisions today financially as to whether or not they're going to close up shop or move to the United States. I mean, these are serious matters and we got 29 days to fix this.

[00:12:54]And I say we make a good shot at it and forget about the rest. Forget the noise.

[00:12:57]Stop making political points on this stuff.

[00:13:01]>> Right. Okay. Michelle, before I get to you, I I do want to set it up with this clip from Prime Minister Mark Carney who made the point that they're not going to waste these 29 days or at least are hoping not to because he spoke to Donald Trump this morning and they've agreed to intensify the negotiations. Have a listen to the prime minister.

[00:13:16]>> This is part of a negotiation. So, the first objective is to get a comprehensive agreement. The benefits obviously both countries uh that's consistent with uh Kisma KMA as it is and KSMA as it will be. uh and we'll work towards that but in parallel we when I say we will um we will do whatever it takes and keep all options obviously uh it's a comprehensive >> prime minister >> okay so so that the prime minister there making it clear they're going to do these negotiations and Michelle one little bit of news that uh the prime minister shared with the premers in the briefing or so I'm told is that on the American side Treasury Secretary Scott Bessant has been deputized as sort of the point person uh on this now uh he'll be assisted by Jamie Singer and Howard Lutnik, but uh Bessant, a a successful serious business guy, is going to be the point person on this. Just what are your thoughts on what the prime minister said and and where this could go?

[00:14:09]>> Well, you know, I think that the prime minister's tone is uh is exactly as it should be. You know, uh he's not he's not the one who's going to be offering idle threats or or trying to hypothesize if they don't do this or that. That's not him. That's not how he he conducts himself. uh he's had a conversation with the president now and you know if there are added resources um uh from the administration that are now going to be at the table as well um perhaps that's a good sign that they're actually serious about it. uh you know and but I think that this he's also not going to be trying to stifle uh the the conversation that the premers are having and um you know first it's their right to do so but also it does you know having those kind of voices um kind of lets the Americans know that people aren't just ready to roll over necessarily and that there are people who you know the prime minister actually has to manage who have some very very um strong opinions about retaliation and so you know it's not just that uh that uh you know he has to manage some stuff on the domestic side as well and that kind of has to be taken into consideration at the table too. So, um, you know, I think it's, uh, it's a little bit of a window perhaps into, uh, the Canadians, uh, minds and souls. And, you know, I suspect that Doug Ford does talk does speak for a whole bunch of people who are just frustrated.

[00:15:30]>> Um, and, uh, no more so than the people that Lisa was talking about in terms of the small businesses who probably aren't just frustrated, but very scared um, about where what's going to happen and, uh, just what's in jeopardy for them and their families.

[00:15:44]You know, Nathan, one of the things the prime minister told the premers today uh again from from my sources is that uh he had anticipated that at some point Donald Trump would put a a clock on this either by formally notifying that they were pulling out of Kosma, the sort of six-month clock, or a mechanism like this uh that you have the tariffs now with a a 30-day countdown clock going on it. Um, so I mean is this a sense that maybe this could be moving to the endgame for good or for bad on this that maybe we find out if there's hope of actual progress on a comprehensive deal or if it's just this is a dead end with the United States and we've got to adapt to whatever it is we're left with post Trump.

[00:16:25]>> I'd like to remind us all that the deals that Trump has signed, he hasn't respected. As as the US representatives were saying, Trump called this trade agreement that he wants to rip up the best deal in history.

[00:16:38]He's not a reliable or rational person.

[00:16:41]One hopes that the impact on American consumers would be motivating to him.

[00:16:47]Obviously not. He's threatening to make life more expensive for Americans, more destructive for their businesses who trade with Canada. I just to Lisa's earlier point of just getting to the table and getting to a good deal and accepting the tariffs. I think the use of threats may be part of the reason we get to that table with a better deal than we otherwise would have. Power respects power. Trump has shown himself consistently to not really respect when we make concessions, which we've made many and he has made none. So to this point, let's just respect the if you want to use that term, the way that this guy conducts business and he wants to be muscular. He wants to be defiant. He doesn't want to follow logic.

[00:17:29]I think he needs to be threatened in order to arrive at whatever deal we get to with the asterisk being that deal probably isn't worth much, not even the paper it's written on, because he doesn't respect the deals he made with Europe or any of the Asian countries.

[00:17:42]So, you can tell I'm frustrated because we we follow a logic that says we need a deal. We're going to have to accept some tariffs and we shouldn't upset him. We should make concessions to him. We should not upset upset him in any kind of way. And there's a piece of me that thinks absolutely not. Like enough's enough. I can't believe I'm agreeing more with Ford. I think Eevee is following into this track as well. And I think there are some others around that table that are saying we have to be able to show a little bit more spine here and say to Americans, American voters, American governors, look, this guy is consistently doing you damage. We're your friends. And as Evie said, if you can't find a friend in Canada as Americans, this has got to be a lonely world for you because we're your best friends. And we have been for centuries, it's it's deeply frustrating because these ties that bind our two countries together are being consistently weakened and in some cases unraveled by an idiotic president who does not pay attention to any logic or any briefings that he gets. And I don't trust Bent to do this. Look through this guy's business career. He's a billionaire investor. Are are we going to say that he's going to have these industries at heart or is this just going to be a financial play for him and his friends in the inner billionaire circle around Trump's cabinet? I wouldn't want to bet on that as an outcome. Personally, >> yeah, Benzy, look, I I get Nathan's frustrations, right? I mean, you listen to what Jameson Greer said last week in Aspen, I think it was, saying that no, Canada gets no credit for any of the concessions they've done. They made bad decisions. They made a bad situation.

[00:19:16]you don't get credit for cleaning up your mess. So, even as you give things to them as they make the demands, it doesn't even get you to even uh with them or barely get you to even with them. And uh you know, as Nathan says, how do you trust them to do a deal when we saw the Gordy How deal was ripped up and and changed uh this week? I mean, there's a whole trust issue there that even if you get through this crisis, another one could just be around the corner.

[00:19:40]>> Exactly, David. And this is the this is the conundrum. And I understand uh it is very tough. Uh Mr. Carney has a very difficult balancing act. You've got premers with competing interests.

[00:19:53]Understandably, I understand why uh Danielle Smith and Scott Mo are saying what they're saying. I also understand what Doug Ford, whose uh economy here in Ontario is deeply rellying on trade with the US. Ontario alone is the number one trading partner of 17 US states as the premier is fond of saying. So this is we are a trade dependent jurisdiction and we need uh you know we want the Gordy How Bridge opened. We wanted it opened a month ago. Uh and you know we've we made concessions to get it open. I but to to Nathan's point I'm not really sure what did we get for the concessions that we made as as you were saying David Jameson Greer said that in Aspen that we don't get any credit for. So why would we make any more concessions? I mean why would we put booze back on on our shelves? I mean they they don't they if if they're not going to be good uh traders, good good uh negotiators, then what is the point? I mean it is it is frustrating and we are our economies are entwined. I thought though that Mr. Trump maybe saying that Canada, you know, we would wouldn't survive without the US. I mean it's easy to say that. I guess I I think Canadians are a lot more resilient and I wouldn't underestimate Canadians. We're very polite in this country, but we're also pretty firm. And I don't think Canadians like to be pushed around. I don't care whether you're a New Democrat, a Liberal, a Green, a Conservative, or whatever. I think that uh uh most Canadians uh will will will rally to their leaders regardless of political strife in this kind of faced with this kind of a threat.

[00:21:22]>> So So Lisa, how do you try to move back past these trust issues, right? Because the prime minister said today they don't want peace meal arrangements. They want a comprehensive agreement, but everything the Americans have done has suggested they want to identify, you know, certain aspects of the economy and and apply leverage against it. And on the Gordy How Bridge, we have an update now that because of this tariff move, a ribbon cutting ceremony with Canada and the US on Friday. The the Canadian side is not going to participate in it. They still expect the bridge to open on Monday, but they're not going to do a celebratory event. And then so it kind of underscores that corrosive erosion of everything in this relationship. How do you move back past the trust uh uh uh deficit, Lisa, and try to get something done here?

[00:22:04]>> I believe that there are still good relationships between the two entities that are having discussions with one another. So Greer and Leblah and Sheret and her counterpart are having ongoing >> discussions. Look, here's another thing to remember. There's a big difference between hard bargaining at a table and then making political pronouncements around the negotiations as well. I'm not saying we concede a damn thing at the table. I'll go hard at the table, know what we stand for, make those threats.

[00:22:33]But I don't think it's helpful making the big threats in the press, for example, against Donald Trump. I don't think it's whatsoever. I think what we should be thinking about is constructing the best deal for Canada that actually allows Donald Trump to claim a win so that he can walk away into the midterms and pretend that he did something great.

[00:22:50]Best deal part two, whatever. I don't really care. I just want to make sure that we have a a good deal. And how do we make him stick to the deal?

[00:22:58]>> God knows. But it still doesn't negate the fact that we need to have a deal. We need to have something written on paper.

[00:23:06]By the way, on the Gordy How thing, just one clarification. We didn't rip up a Gordy How deal. That deal still exists between Canada and Michigan. We just got a little side deal, little side action going with the feds. That's the US government wanting to be part of it now, too, >> right? Yes. And this is it's not a split of tolls. It's just the handing over revenue equal to a split of the tolls.

[00:23:27]So distinction kind of without a difference in some [laughter] ways.

[00:23:31]Yeah. But but it it is what it is. Uh Michelle, um going to give you the last word here, but you know, Lisa said making big threats in public is not helpful and Mark Carney is not doing that, right? You know, he has been strategic, liberals would say, in his approach versus cathartic in sort of sounding off and and creating uh big headlines. But the trust issue and the reliability issue of the other partner and their willingness to do the deal.

[00:23:57]This is the enormous hurdle that has existed all along. So just last word to you on on where this might go in the 29 days with that.

[00:24:04]>> Well, you know, as I said off the top, it could go anywhere. Like let's just be honest with ourselves like who who really knows? Um but I think Mark Carney's approach is the best that can be had under the circumstances. He's measured, he's thoughtful, and he's also wanting to have it all together. I think that he's recognized very early on that if we actually kind of put this into a peacemeal series of deals, which is what the Trump administration really wanted, then they would they would chew us up and spit us out and uh we would end up losing and that there's a whole bunch of different ways that they would, you know, tear up one to to just uh or play one off against each other. And so he's been very firm in terms of his approach um without being antagonistic. And I think that that uh that kind of balance um and patience um is going to be uh be required as they kind of continue on. Um I agree with Lisa, he does have the exact right people at the table. Janice Sheret and um Dominic Lebla are are incredibly capable um and uh also um have a lot of patience and uh and understand um who they're dealing with.

[00:25:09]And so uh you know if there's a deal to be had I think we have the team to do it.

[00:25:14]>> Yeah. The strategic patience reserve you need to have for moments like this is truly extraordinary. I I don't mean this this is great. You know what I'm talking about. The panel's wonderful. Uh Michelle Canario, Nathan Cullen, Rob Benzy, and Lisa. Right. Lisa, the next time you text me and say read up on this, I'm going to get a documentary prepared. I'm just not going to read up on it because that would have been useful today. Thanks so much, gang.

[00:25:38]We'll see you soon.

[00:25:38]>> Thanks.