What this new round of U.S. tariffs means for Quebec

[00:00:00]We are taking another look at US President Donald Trump's latest 50% tariff threat on Canadian exports from wine to hockey sticks to even candles.

[00:00:10]It is a response to provinces banning alcohol, Canada's actions in the auto sector, and protections in the dairy industry. McGill PhD candidate Dia Zhang specializes in international trade with a focus on US-Canada economic relations.

[00:00:25]So good to have you with us. Now, we heard from some Quebec wine producers who are not too worried because they are selling locally or to other markets.

[00:00:34]Just wondering how this latest tariff threat compares to what Quebec has been experiencing already.

[00:00:40]>> Yeah, so first of all, I think it's important to acknowledge that Quebec has already been experiencing very high tariffs, specifically aluminum and steel tariff that has hit the industry pretty tough. In terms of this tariff, we're seeing a very large number, which is 50% on, you know, a list of a number of products that includes Canadian wine.

[00:01:04]However, I like to kind of establish that American exports in terms of alcohol to Canada, it is much, much, much higher than the percentage of Canadian alcohol that's going down south. That is perhaps why a lot of wine producers, you know, Quebec >> [clears throat] >> alcohol producers are not as worried because they are facing a local market and they're facing a Canadian market rather than you know, completely being dependent on the US.

[00:01:33]>> But obviously the dairy industry is worried.

[00:01:36]>> Yes, so I I think it's very obvious from this tariff announcement that, you know, tariff quota is tariff quota is one of the point of negotiation, point of discussion that the United States very much care about, and that will be a high talking point.

[00:01:52]And having 50% tariff on that um, would quite severely, you know, target this industry. However, I would also still want to establish that uh Canadian dairy is also facing the Canadian market and um is largely, you know, supplying Canadians and, you know, [clears throat] the competition is there.

[00:02:12]>> Kirsten Hillman said that issue, supply management, non-negotiable. I'm just wondering, how do you think Quebec has managed this trade war so far with this Trump administration?

[00:02:23]>> So, I I think it's difficult to manage this trade war, you know, not just for Quebec, for Canada as a whole and for many other countries that are currently facing tariff. Um, Quebec has historically a very well-established effort internationally, especially to to the United States. We have a lot of international offices down south and, you know, the premier also did her first official visit to the United States. So, there's a limit to which, you know, Quebec can really do. Um, however, I I I do think, you know, some of the alcohol brands uh that that are coming from the province is kind of causing more tension and it has been the Quebec has been disproportionately hurt by all the tariff coming in. And that's not necessarily the fault of the government, but, you know, it it's just the way the sectors are distributed across Canada.

[00:03:13]Um >> Yeah. I'm just wondering, uh you know, uh with the Trump administration, Donald Trump not that popular, but we're hearing that he's pretending, you know, posing to be strong with this to appease his MAGA base, but then you've got midterm elections coming up. What kind of scenarios do you see playing out uh before the midterm elections or even over the next 28 days so far?

[00:03:39]>> Right. Yeah, I think midterm election's definitely a key turning point. I I I believe, you know, not only Americans, a lot of Canadians are closely watching.

[00:03:47]Uh why does it matter? Well, you know, we are facing kind of Kuzma renegotiation. Currently, Kuzma is still currently in in in effect, but if US were to end Kuzma, that needs congressional approval. That's where kind of midterm results really comes in.

[00:04:05]Um having kind of the balance of Democrats and Republican coming in and that could really decide the fate of Kuzma. So, that's why on the other hand, you know, in the short term, there's a lot of inflationary pressure that's currently facing the United States and that could change the midterm outcome. So, this tariff war could also harm Americans as we speak.

[00:04:29]>> Okay. And then we'd have to see what actually happens in 28 days and after that. Um and whether this actually goes through. Uh Di Jiaqing, thank you so much.

[00:04:41]>> Yeah, thanks. Happy to help.