The U.S.-Canada trade war is deepening after talks
collapsed without a deal on Friday. Canadian Prime Minister
Mark Carney accused the Trump administration of issuing
demands that would compromise Canada’s sovereignty and
undermine key industries. On Saturday, the United States
slapped 50% tariffs on around $20 billion worth of imports
from Canada, and Carney announced retaliatory tariffs on $20
billion of U.S. products set to go into effect on September
8.
“Canadians are sick of this,” says Avi Lewis,
leader of Canada’s progressive New Democratic Party. He
says that while the Liberal government has correctly
identified voters’ anger, its policies still favor
international investors and the fossil fuel industry rather
than truly “Trump-proofing” the economy.
We also
speak with trade expert Lori Wallach, who says the
U.S.-Canada trade war is pitting Trump’s vision of
“oligarchic trade grift” against a dead neoliberal
consensus represented by Carney. The two countries have
balanced trade, and Wallach says the United States is being
far more lenient with China despite Beijing’s much more
serious threat to the U.S. and wider global economy through
its “beggar-thy-neighbor”
policies.
Transcript
This is a rush
transcript. Copy may not be in its final
form.
ANJALI KAMAT: The
U.S.-Canada trade war is deepening after talks collapsed
without a deal on Friday. Canadian Prime Minister Mark
Carney accused the Trump administration of issuing demands
that would compromise Canada’s sovereignty and undermine
key industries. On Saturday, Trump slapped 50% tariffs on
around $20 billion worth of imports from Canada. Carney then
announced retaliatory tariffs on $20 billion of U.S.
products beginning September 8th. Carney spoke on
Saturday.
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PRIME MINISTER MARK CARNEY:
We’ve been under no illusions. We recognized from the
start that America has changed. Early last year, in this
room, I observed that the decadeslong process of steadily
increasing integration between our economies was over. Our
government understood before many that America would
transform all of its commercial relationships, that it would
put a series of tariffs on its closest allies and use
economic integration as a weapon. We recognized that
sometimes its signature was written in pencil. …
The
gap between partnership and competitor, unfortunately, has
remained too wide in recent days. So, last evening, I
instructed our negotiators to return to Ottawa. We cannot
accept what they’ve offered, and we will not give what
they’ve asked.
ANJALI KAMAT:
Canadian Prime Minister Mark Carney took questions from
reporters after his
address.
REPORTER: Why does it feel
like today Mark Carney is going to war, trade war, the
tone?
PRIME MINISTER MARK CARNEY:
Because we were attacked. Like, you’re at war when you get
attacked. We got attacked. The U.S. put 50%. We waited until
the United States decided to actually implement these
so-called 338 tariffs. That’s fine.
ANJALI
KAMAT: President Trump responded online, writing,
quote, “Canada wants the benefits of being a State,
without being one!!! They have also charged our great
farmers, for many years, massive amounts of Tariffs. No
more!!!” end-quote.
U.S. Transportation Secretary
Sean Duffy appeared Sunday on Fox
News.
TRANSPORTATION SECRETARY SEAN
DUFFY: We’re great trading partners, right? But
— but — but Canada gets the benefit of trading with the
U.S. more — way more than the U.S. gets the benefit of
trading with Canada. It’s a country that doesn’t have a
military. …
We want fairness for the American
worker, and some of our best friends are — are the worst
offenders, that treat us the worst. And the fact that we
provide their security for them and they take advantage of
us, I think President Trump was the first one to go, “You
know what? That’s not the kind of relationship that
friends should have.” And so, the president’s calling
them out. I think you’re going to see Mark Carney come to
the table very, very quickly, because it’s going to be
devastating for his country.
ANJALI
KAMAT: On Sunday, the editorial page of The Wall
Street Journal ran an editorial
headlined “The Dumbest Trade War Revisited: Trump’s
decision to escalate a tariff brawl with Canada makes no
economic or political sense.”
The tariffs come just
10 weeks before the midterms. Economists predict
battleground states, including Maine, Michigan, Ohio and
Alaska, could face disproportionate economic pain from the
tariffs.
For more on this, we’re joined now by two
guests. Lori Wallach is director of the Rethink Trade
program at the American Economic Liberties Project and
founder and former director of Public Citizen’s Global
Trade Watch. Her recent piece
for Foreign Affairs is headlined “The Right Way to
Balance Trade: What Comes After the Neoliberal Order.”
She’s joining us in Wisconsin. And in Toronto is Avi
Lewis, the leader of Canada’s New Democratic Party, the
NDP. He’s also a longtime Canadian journalist, documentary
filmmaker and activist.
We welcome you both to
Democracy Now! Avi Lewis, let’s begin with you.
Talk about what these talks were supposed to be about and
why they broke down.
AVI LEWIS: Well,
good morning, Anjali. Hello, Lori. It’s great to be back
on Democracy Now!
This has followed a
sickeningly familiar pattern with Trump threatening and
setting a deadline for devastating — I think the
Washington — The Wall Street Journal — rarely
agree with The Wall Street Journal, but this is
incredibly dumb. It’s also incredibly damaging and
dangerous. It’s going to hurt Canadian workers. It’s
going to hurt American workers. It’s completely
unnecessary. And at the last minute, after negotiations are
going on under the threat of these massive tariffs, suddenly
Howard Lutnick arrives with a whole set of new demands at
the 11th hour. This is the pattern, and we’ve seen it over
and over again.
In this case, Prime Minister Carney
read the room correctly. Canadians are sick of this. We’re
already under punishing tariffs in many of our most
important industrial sectors, from automaking to forestry to
steel and others, and we simply are not in the mood to grant
more concessions. And so the prime minister walked away from
the table.
But the truth is, and the wider context of
this is, that, unfortunately, Canada has already made a
whole bunch of unilateral concessions, and so we’re in a
weakened position just in the context of the short-term
trade deal. The prime minister gave up the digital services
tax without anything to compensate it. That’s seven —
modest for Big Tech. That’s a modest tax of about $7
billion a year. It was the only real solid tax we had on the
Big Tech billionaire — I guess we have to say
“trillionaire” — class behind Trump. And that was at
the beginning of this process, something like a year
ago.
We’re also — while Canadians are united in
this feeling that we’ve gone — we’ve given enough to
Trump’s demands, and we can’t concede further without
securing protection for our own industries and economy,
we’re not all in this together. We have to remember, and
Lori and I have been fighting free trade deals between
Canada and the United States since the 1980s, because the
integration of the corporate classes of our two economies
has been achieved at the expense of working-class people in
both of our countries, and to the incredible, staggering
enrichment of the wealthiest people and corporations in our
economy. We are not all in this together when the six big
Canadian banks made $70 billion last year. They are not
directly affected by tariffs, and they continue to make
higher and higher profits every single year. We are not all
in this together when the oil and gas sector in Canada,
which is majority owned by U.S. corporations, made — is on
track to make up to $150 billion in wartime profits this
year alone because of the immoral, senseless, illegal attack
on Iran by the United States and Israel, $150 billion in
profits for this industry that is not affected, that has
been spared all of the tariffs, because, of course, the
United States needs a huge amount of Canadian oil each and
every day. So, we are united as Canadians in rejecting more
unilateral concessions; we are not all in this together in
terms of who’s going to be hurt.
And we need to
build an independent Canadian economy. Mark Carney has had
well over a year to get started on that project. He has
announced big plans, like buying the oil industry a new
pipeline for $40, $50, $60 billion of public money, like
major projects that suspend Indigenous rights and
environmental protections in favor of largely foreign
corporations coming in and buying more of our resources.
He’s having an investment summit on September 12th in
Toronto to invite BlackRock and Blackstone and JPMorgan. And
the prime minister has mused about selling our airports and
our ports and privatizing more of our economy to the benefit
of foreign investors.
So, we need a made-in-Canada
plan to develop our autonomy and double down on the things
that unite us as Canadians, like our embattled healthcare
system, which is also being privatized these days. But
we’re not on track to do that. This is a fork-in-the-road
moment for Canada, and we have a completely different
progressive vision to offer Canadians, that would help
Canadian workers, defend Canadian workers in this crisis,
and also get back to work building a truly independent
Canadian economy, that would benefit American workers, as
well. As we’ll see in this next period, everybody is going
to be hurt by this.
ANJALI KAMAT:
Avi, these new tariffs affect about 5% of the goods, of
Canadian goods that are imported by the U.S. They target
about $20 billion worth of Canadian goods. Who is actually
hurt by these tariffs? Who are the workers, what are the
industries in Canada that would be hurt by these
tariffs?
AVI LEWIS: Yeah, I mean,
this is — we already have tariffs on the automobile sector
of 25%, a major integrated sector between Canada, the U.S.
and Mexico. And this deal was only to achieve a lowering of
25% to 15% on auto tariffs. That makes the auto industry in
Canada uncompetitive, which is why Lana Payne, the head of
Unifor, the largest private-sector union in Canada, said
months and months ago that no deal is better than a bad
deal. But this is an extension beyond steel and forestry and
auto to tariff a lot of consumer goods, everything from
furniture makers to apparel to rubber and plastic products.
This would bite deeper into the Canadian economy across the
economy, a lot of smaller and medium-sized businesses in
every region of the country.
But again, it’s not all
equally apportioned. It’s always certain sectors and
certain regions which are hurt the worst. In this case, my
province of British Columbia would be most affected by this
latest round of tariffs. Ontario and Quebec, the largest
economic provinces in our country, would also be severely,
severely damaged by this. And don’t forget that it’s
Americans who pay these tariffs, and it’s American workers
who are also affected. It’s the cost-of-living emergency,
in Canada and the United States, where food prices, where
rent, and the cost of putting a roof over your head, and all
of the costs of living are going up and up and up in a
period where people are really suffering. So, you know,
there are corporate players who will make out fine, but it
is the working-class people of our continent who are going
to be hurt. This may not be the huge proportion of Canadian
exports to the United States, in one of the biggest trading
relationships on planet Earth between our two countries, but
this is a deepening of an attack on Canada and on the
American working class, which has been going on since Trump
was elected for the second time.
And here in Canada,
we need to do something big about it. We’ve got plenty of
fantastic proposals about how we could actually protect
ourselves. In the short term, we have an unemployment
insurance program in Canada that only covers one out of
three workers that pay into it, and it only gives you a
little more than half of your previous wage or salary when
you get laid off. It’s hard to qualify for. It takes too
long to kick in. We need immediate reforms to our employment
insurance system to cover people with more support faster
and to cover way more workers in our economy. Those are sort
of the short-term things.
We need emergency assistance
for the sectors that are worst hit by this — again,
manufacturing, wood products, apparel and furniture and
others. But we also need a bigger plan to actually
Trump-proof the Canadian economy. We could do things —
when we are making major investments of public dollars in
oil pipelines, we could use that money instead to build an
east-west electricity grid, double down on renewable energy,
which is energy independence forever, because the inputs for
renewable energy are always free, unlike oil and gas and
coal. We could build an east-west electricity grid to trade
renewable energy across our country with battery storage and
the cheapest-installed energy, solar and wind, on planet
Earth today. The world is moving away from fossil fuels in
this period, and Canada is being left behind because we are
— continue, under the Mark Carney government, to tie our
fate to massive military expenditures, massive fossil fuel
investments, and all-in on AI, which, despite the prime
minister’s excellent words about Canadian independence
from the United States, mirror the Trump agenda. And
unfortunately, under the surface, we’re seeing an
expansion of decades of integration of the corporate class
between Canada and the United States. That is not a plan to
make anybody safe.
ANJALI KAMAT: I
want to bring Lori Wallach into the conversation, director
of the Rethink Trade program at the American Economic
Liberties Project and founder and former director of Public
Citizen’s Global Trade Watch. Lori, building off of what
Avi was talking about in terms of U.S. consumers who are
hurting, I just wanted to read a couple quotes from
politicians from border states. Here we’ve got Minnesota
Senator Amy Klobuchar saying on X, “Canada is
Minnesota’s #1 trading partner. Minnesotans are paying for
Trump’s chaos.” Republican Senator of Maine Susan
Collins said the new tariffs would, quote, “increase costs
for Maine families, as most businesses will have no choice
but to pass on the tariffs to their customers through higher
prices.” Your response to what’s happened with the
collapse of the trade talks?
LORI
WALLACH: So, it is the case that this situation is
— again, I don’t typically agree with The Wall Street
Journal, but — perhaps the most stupid trade fight in
history, in that, yes, if you buy — if you are a purchaser
in the U.S. of some of these goods — for instance, hockey
sticks, but not pucks — I mean, go figure — you will see
higher prices.
But let’s step back at the whole
situation. And Avi’s exactly right. You have at this
moment this fight between two visions, neither of which are
good for working people or for the environment. There is a
way to do trade that benefits the majority of people, small
businesses, farmers. And in Trump, you have an
oligarch-first trade policy. He got elected saying he’d
help working people. In fact, what he’s done is make
exceptions in his tariffs. Whatever you think about tariffs
at this point, 55% of imports into the U.S. have been
excluded from tariffs, because Trump gives free entry for
his buddies in Big Tech, in chemicals, etc. So, we have a
situation where between the disruption of supply chains like
the U.S. and Canada, which have been not under the right
rules, but united in a way that literally it’s disruptive
to U.S. manufacturing when there’s disruption in Canadian
manufacturing — you have a situation where the U.S. now is
down 75,000 manufacturing jobs since Trump came down, came
back to office. We have 30% decrease right now in factory
construction since Trump came back the second time, because
the chaos, the tariff chaos and malpractice, is so
severe.
But the problem is, in Mark Carney, there is
sort of the high priest of neoliberalism, a guy who has been
going around the world trying to sell the Trans-Pacific
Partnership, NAFTA on steroids, extra goodies for Big Tech
and for Big Pharma, ways to attack Canada’s wonderful
pharmaceutical pricing system that don’t even exist in the
old NAFTA, as the replacement for the World Trade
Organization, as if that’s not bad enough. And there is
something that is neither Trump’s oligarchic trade grift
nor the neoliberalism that Carney has in mind, that actually
could harness the benefits of trade, but neither of these
guys is thinking about that. Rather, they’re having this
kind of personal fight, and it’s political. So, Trump
can’t bear the thought someone is standing up to him and
not just steamrolling him. Folks in Canada are getting
tariffed because they had the temerity to stand up and put
tariffs in retaliation to Trump unilaterally tariffing them.
That is the basis for these tariffs. And the notion that,
politically — the U.S., Canada and Mexico right now have
the only duty-free trade at all under Trump two. Canada and
Mexico still have majority duty-free access. Underlying all
of this is: Will we renegotiate, in a way that works for
people and the planet. the NAFTA replacement, the
U.S.-Mexico-Canada Agreement? And there, I think, are people
with a good vision — Avi, for instance; in the U.S., many
Democrats in Congress — of how you could fix that
agreement and have a lift-up agreement. But instead, with
this fight, we’re just heading in the worst direction
possible.
ANJALI KAMAT: And, Lori,
how have Trump’s economic policies vis-à-vis Canada
differed from those, say, with China? And this especially at
a time where we’re coming up on what the Trump
administration is calling “economic D-Day,” threatening
to sanction any country trading with
Iran?
LORI WALLACH: So, this is part
of the lunacy of the situation. The United States not only
has many decades of putting the economies together, as Avi
said, not on behalf of working people, but, for instance,
the aerospace industry, literally, if you hit tariffs on
metal products that are part of the aerospace industry,
which is happening, you hurt jobs in the U.S., instead of
thinking about how do we make this smoother. And the U.S.
and Canada have relatively balanced trade. If you take the
crude oil sent to the U.S. to be processed and employ U.S.
workers out of the formula, U.S. and Canada have balanced
trade. And then tariffs go to 50%, and some products are
higher, lower. But targeting Canada is the big problem, when
it’s not. Rather, it’s a partner and has balanced trade,
versus in China.
China is the source of a ginormous
trade deficit with the U.S., but not exclusively, with the
world. And it’s because of particular policies that Canada
is not implementing, that China uses regularly, often called
“beggar thy neighbor,” where you take policies
suppressing wages, no independent unions, or no safety net,
social safety net. So, you basically suppress consumption.
People save a ton, because they’re responsible for
everything on their own. They have no support from the
government. Or you subsidize at enormous rates. All of those
interventions mean China is exporting an enormous amount.
And it’s not just hitting the U.S. At this point,
countries that were the emerging trade countries, countries
like Mexico, like India, like Brazil, are going into trade
deficits and are being deindustrialized because of this
behavior in China. Trump has cut the tariffs. He feels some
friendship with the authoritarian leader of China. And so,
he and Premier Xi have had many a happy meeting where they
cut tariffs with China, the cause of the trade deficit. And
here we have 50% tariffs on Canada. It’s — it is, I
would say, something that is more like middle school or
childhood playground battles between Carney and Trump, as
compared to anything that makes economic sense or
geopolitical sense.
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