Canada-U.S. trade war: How did two neighbours become rivals?

0:00For the first time ever, Yamavar Resort and Casino at San Manuel is giving away a new Rolex watch for every Club Serrano card deer. Play with your Club Serrano card and on September 20th, you could be one of five winners of a Rolex watch. Plus, all winners will advance to the finale at Palm's Casino Resort Las Vegas for a chance to take home a rarity. The second Mustang Dark Horse ever produced on September 26th. Two properties. Six winners. Only at Yamavar Resort and Casino, your California to Vegas connection. Details at Yamavar.com must be 21 or older to enter participate. Please gamble responsibly. Chronic Migraine is 15 or more headache days a month, each lasting four hours or more. Botox, on a botulinum toxin A, prevents headaches and adults with chronic migraine before they start. It's not for those with 14 or fewer headache days a month. It prevents on average 8 to 9 headache days a month versus 6 to 7 for placebo. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection causing serious symptoms. Alert your doctor right away as difficulty swallowing, speaking, breathing, eye problems or muscle weakness can be signs of a life-threatening condition. Patients with these conditions before injection are at highest risk.

1:02Side effects may include allergic reactions, neck and injection site pain, fatigue and headache. Alerts can include rash, welts, asthma symptoms and dizziness. Don't receive Botox if there's a skin infection. Tell your doctor your medical history, muscle or nerve conditions including ALS Lugeric's disease, myasthenia-gravis or Lambert Eaton syndrome and medications including botulinum toxins as these may increase the risk of serious side effects. Why wait? If you're a doctor, visit BotoxCronicMigraine.com or call 1-800-44 Botox to learn more. Bring national posts beyond the headlines. Shop official merch including hats, mugs, tote bags and more. Design for readers who like their journalism bold. Visit postmedia.store today. If Canada and the US were homes on a street, they'd be locked in what could be politely called one of the worst neighbor disputes their quiet town of North America has ever seen. One neighbor complains about how the other treats their kids while the second neighbor is worried the first is going to unilaterally move the fence into their yard and tensions

2:03are on the rise. But how did two friendly neighbors run into such problems? I'm Dave Breakingridge and this is 10-3. National Post-Political Reporter Georgian Gowling joins me to talk about the ongoing trade war between Canada and the US, how we got here and what it may take to get us out of it. Don't forget you can find us on Apple Podcasts, Spotify, Amazon Music. I'd love it if you could leave us a rating, a review and tell your friends about the show. So Jordan, it's been weeks, several weeks actually, of Vali's back and forth between Canada and the US in a trade dispute that seemed terrifcent implemented on billions of dollars worth of cross-border trade. And I do want to talk about the how we got here. I've given that this is a relatively fluid situation and things can change minute by minute. I thought we'd start with the latest. Now you and I are talking on Friday, it's September 11th and the federal cabinet has been meeting in Banff. There was an announcement with the Ukrainian president about a partnership in that country.

3:09And there have been indications that despite no formal trade talks happening between Canada and the US, conversations are still ongoing. What have we been hearing this week from the Prime Minister and from the Canada-US Trade Minister Dominic LeBlanc on this file? Yeah, so we've heard from LeBlanc, Carney yesterday and today kind of for the first time since Trump made his announcement on Tuesday and since Canadian retaliatory tariffs came into place. So Carney on Thursday sort of said he remains in contact with the president. Now he didn't say that he was specifically talking trade with Trump but that they were discussing ongoing issues, global events like the Iran War and the Ukrainian War of course, ways that Canada and the US can kind of work together on those files. But no indication that they're talking trade at the moment. LeBlanc spoke to reporters Friday morning in Banff. He said he remains in contact with both USGR, Gamers in Greer. So that's his trade counterpart but also Howard Lutnik.

4:12And yeah, so he's, there's still ongoing conversations but there's no indication that there's any plans for any sort of return of formal negotiations on the trade agreement that collapsed last month. Okay, at this point do we have a sense of what it would take to restart talks? Is it just more willingness on either country's part to say we're ready to go or ready to make concessions? It seems to me that at least from the Canadian side, there is a door that is being left open. Look, even after Canada did present its retaliation, it's noteworthy that both LeBlanc and Marcarny were not present for that announcement. It almost seems like they want to keep the negotiating team, Canadian team, sort of not with that announcement. So, you know, Dominal Blanc and Carney have both expressed a willingness to return to the table but only if, quote, there is a fair deal on the table and that some of those

5:13red lines that Canada had would be addressed. Okay. Backing up a little bit and for listeners who may have kind of caught some of it over the last few weeks, things took a turn for the worse in the summer with Canada walking away from negotiations with the United States. But for those who may have forgotten or those who may have been on vacation when this all broke, what was it that Canada and the US were negotiating exactly? Yeah. So, this really began when Trump sort of out of the blue in July announced that he planned to impose a 50% tariffs on $28 billion with the Canadian goods. That was really sort of the beginning of things. That's when Carney sort of reached out to the president and there seemed to be a indication that there was a willingness on both sides to start negotiating some form of interim agreement. Now, Dameson Gruer has been clear that apart from, you know, reviewing the Kuzma, that is

6:17the North American trade pact between Mexico, Canada, the US, he is also looking to make interim deals on the side, bilateral deals with both Mexico and Canada by the end of this year. There was some indication that the US seemed to think that Canada was dragging its feet. There are also people who think that the tariff threat was a way to get Canada to the table. So, Canada and the US were sort of operating with a very kind of short and timeline because they were trying to get this agreement in place before Trump's tariff threat came into place, which would have been August 18th. And then in the midst of that negotiation, they were able to get an extended deadline. Now, what Canada was off after in these negotiations was some sort of tariff release on the Section 2-3-2 tariff. So, those are tariffs that have been applied to Canada on Canadian aluminum, steel, autos, and they were also looking for relief on lumber.

7:20And the US, they were looking for Canada in Canada that provinces, of course, who have boy costs on the sale of US alcohol goods. So they were looking for Canada to lift that completely. And they were also looking for Canada to lift its retaliatory tariffs on autos. But of course, there were things that happened in the negotiation that led to Canada walking away. And then, the US or Carnie kind of laid out three specific things, which was that trucks were not included in the tariff release for autos. There seemed to be some mixed communication on that and whether they thought they were not. It's really unclear as we have not seen the full text of the agreement. Carnie also took issue with the US wanting to dictate trade terms between Canada and other countries. It seemed that the US wanted Canada sort of mimic any kind of future American trade policy on tariffs with other countries. Carnie looks at that as a threat to Canada's own decision making and sovereignty.

8:25And finally, that there was some things happening with the protection of French language and streaming platforms that has a lot to do with you online streaming acts. So those three were the three main reasons that Carnie decided to walk away from the negotiation. Yeah. In the aftermath of that, the United States side basically said that Canada was the one who wanted to put these last minute pieces in place in this deal and they decided to walk away. So that's on them, which sparked opposition leader Pierre Paulierve coming out and saying, well, let's release the deal. Let's, we want Canadians deserve to see the full text of the deal that you walked away from. Is there a chance that Carnie will do that? Has he given any indication he may be more transparent with Canadians on that front? I don't think the Prime Minister is going to release the text of that agreement because I think that would impede sort of any future negotiations with the US should they return

9:29to the table. I mean, when you're a negotiator, you don't really want to show your hand. I've got no indication at least from the Prime Minister that he has any plans to do that. All right. As it sits now, looking at things broadly, as you say, there's been tariffs on billions of dollars of goods. What sectors in Canada are most affected by the tariffs imposed by the US and even the counter-terrorists imposed by Canada? And what is the government doing to help those sectors? Yeah. So I think the main industries that continue to be hit hard are the aluminum and steel sectors. They face very steep two, three, two, section two, three, two tariffs on nearly 50%. The auto sector has also faced serious consequences from this trade war. We've heard a lot of news in recent months of closures, of plants, of job losses.

10:30So the auto sector is also being hit incredibly hard. And then of course, there's lumber. Now, lumber only has a 10% duty on it right now, but that's in addition to other counter-beiling duties that have hit the sector for a number of years. And that's a longstanding trade dispute with the US that goes back decades. But the lumber industry has definitely been hit hard. You've heard stories of lumber closures in DC and other parts of the country. What the government is doing now, particularly now that Canada has put in retaliatory tariffs, but also the US has put in tariffs on a number of goods, including clothing, etc. Consumer goods. Is they've unveiled a aid package of $7.2 billion. Now, this goes to a lot of employers, but also workers. It's expanding EI programs. It's expanding a program that would allow employers to keep people employed for a longer

11:31period of time as they go through this difficult period. It's been some criticism of the aid package that perhaps it doesn't go far enough, particularly in helping keep workers employed. And ultimately, I was talking with a trade lawyer who has a lot of clients who are directly impacted by not only US tariffs, but also Canadian retaliatory tariffs on the US. And they said, you know, it's nice to get this money, but ultimately, if we don't have a market to sell to, it's going to be quite difficult to keep employees employed. Because if you have nothing to sell, I mean, you can't stand business. So that's ultimately a really big challenge that businesses are facing right now. We'll be right back. For the first time ever, Yamavar Resort and Casino at San Manuel is giving away a new Rolex watch for every Club Serrano card deer. Play with your Club Serrano card and on September 20th, you could be one of five winners of a Rolex

12:32watch. Plus, all winners will advance to the finale at Palm's Casino Resort Las Vegas for a chance to take home a rarity. The second Mustang Dark Horse ever produced on September 26th, two properties, six winners, only at Yamavar Resort and Casino, your California to Vegas connection. Details at Yamavar.com must be 21 or older to enter participate. Please gamble responsibly. Chronic Migraine is 15 or more headache days a month, each lasting four hours or more. Botox, on a botulinum toxin A, prevents headaches and adults with chronic migraine before they start. It's not for those with 14 or fewer headache days a month. It prevents, on average, 8 to 9 headache days a month versus 6 to 7 for placebo. Prescription Botox is injected by your doctor. Effects of Botox may spread hours to weeks after injection causing serious symptoms. Alert your doctor right away as difficulty swallowing, speaking, breathing, eye problems or muscle weakness can be signs of a life-threatening condition. Patients with these conditions before injection are at highest risk. Side effects may include allergic reactions, neck and injection site pain, fatigue and headache. Alerts can include rash, welts, asthma symptoms and dizziness. Don't receive Botox if there's a skin infection.

13:33Tell your doctor your medical history, muscle or nerve conditions, including ALS Lugeric's disease, myosthenia-gravis or Lambert Eaton syndrome, and medications, including botulinum toxins, as these may increase the risk of serious side effects. Why wait? Dr. Visit BotoxCronicMigraine.com or call 1-800-44 Botox to learn more. One of the things that Canadians have been kind of wrestling with, and this goes back as far as late 2024. So almost two years ago, after he won re-election even before he was inaugurated for the second time, and was even hinted at by Pierre Pauille in appearances over the last couple days on why. There's a confusion in Canada as to why. We don't understand why we're a target. Why is Trump doing this? And what's the prevailing wisdom around the reasonings for this trade war, at least looking at the Americans motives, and how is both Carnie and Pauille trying to turn the tide for

14:38Canada in this war? Yeah, so Trump has always liked tariffs. As we know, during his first term, he was a big fan. He did also subject Canada to tariffs during that time period. Now, he's been much more aggressive in this term. And I think a lot of it has to do with, I mean, Latinac and Greer for PEPIS as well. It's about rebalancing trade, but really about protecting their domestic manufacturing sector. There are a number of companies, well, the vast majority of American industries don't want these tariffs. There are a select few that do, and they're usually in the steel and the heavy manufacturing sectors because it levels the playing field for them, right? If they're terrifting a number of foreign companies with products that are going into the US market, having them tear up sort of helps those domestic manufacturers compete better. So Trump likes those tariffs. That's one of the main reasons I think he likes them.

15:39I think he also likes them because they're a source of leverage for him when he is dealing with other countries. And I think they're a source of leverage to influence countries and other ways too, you know, for instance, on defense spending and other things like that. So he's a big fan. How carny is dealing with this? Well, carny is betting very big on trade diversification. And he's asked what Canada is doing in responses trade war. Often you will hear him say, Canada is building better. We're building stronger and we're going to diversify our relationships. Carny also has a very ambitious economic agenda. And as you know, there's an investment summit that's scheduled for next week. Canada has seen very good foreign direct investment numbers recently and he's hoping to attract more in this big summit in Toronto next week. So there's a lot of things Carny is doing on the economic agenda, but ultimately this

16:42issue will continue to plague him because 75% of Canada's trade still goes to the US. So some sort of resolution on this is going to ultimately be necessary. So yeah, we'll see. With all of that in mind and knowing that this is kind of the position Trump has taken with other countries over the last couple of years and his America first policy when it comes to manufacturing, what kind of deal could Canada be hoping for in this case? Is it accepting some tariffs from the US, but perhaps not as high as it accepting losing manufacturing to the United States? What could Canada hope to get for out of all of this? I think ultimately and I think the Prime Minister was willing to accept a deal at least until last minute when negotiations started to fall apart with some sort of lower tariff rate on some of these key sectors. I don't think there's any indication that Canada can return to a zero tariff with the

17:49United States trade. Carny ultimately reminds us of this in a lot of his speeches where the old relationship of the US is over and I believe him when he says that. I think that the new normal will be trying to get the best tariff rate possible, but I don't see a resolution of this where Canada is going back to tariff rate trade with the United States. There will be some sort of rate there as well. Is there a sense that the looming midterm elections in the US could strengthen Canada's position that as it gets closer and these policies are unpopular even with Americans that the Republicans could give or at least show a willingness to come back to the table? Or is there a sense that the Republicans may try and double down on this rhetoric in the hopes of rallying voters in key states that rely on US-based manufacturing? We've sort of seen some Republicans express some opposition to some of the tariffs, particularly

18:57if it hurts their constituencies at the end of the day. But there hasn't been any real effort on the Republican side to curtail Trump's tariff agenda. And one also has to remember, the scenario in which even if the Democrats were able to recapture the Congress and Senate, any legislation that they would pass that could ultimately try to curtail Trump's tariffs. At the end of the day, the president has veto power. So this notion that if the Democrats were to sweep the midterms, that we may see some tariff relief, it's hard to say if that would be the case because the president has executive power and he also has veto power at the end of the day. And a lot of the legislation that he's using right now to impose tariffs on Canada are through executive action. So it would be very difficult to curtail his tariffs. And I'm not saying it's misguided to say the midterms won't affect anything, but it's

20:01hard to see how that would ultimately curtail those tariff. And this last question, it may be a little broad or maybe a little vague and sometimes in these kind of disputes, it's hard to tell which way the wind's going to go. But what do you suppose Canadians should be watching for next? Is it perhaps more public signs that Canadians are willing to go back to the table or is it a sign that the US may be interested in reopening these negotiations? It's hard to say. The thing is the prime minister has sort of pain in himself a bit into a corner here because he said basically any agreement that's fine with the US is signed in pencil. So when you tell the Canadian public that it's like, well, any agreement we tried to get here may not be worth it. And if you remember too, calling among Canadians suggests that 75% of us were in agreement of him walking away from that agreement.

21:03So when you have that kind of political backing and capital as the prime minister, it would take a lot of think to return to the table. Not being said, Canada is weaving the door open. Communication channels continue to be open. You also have to remember that Mexico now is working on a bilateral agreement with the US. And Reuters is reporting today that they're hoping to get something done by November 3rd. So who knows? Maybe the US gets something done with Mexico and is like, okay, let's turn back to the difficult Canadian now and try to get something done because you also have to think about the Kuzma renewal process and whether the US likes it or not, Canada is a part of that agreement. And so there have to be some sort of resolution to this before we move on to that trilateral agreement discussion. Well, as I said off the top, this is a fluid situation and I'm sure that there's a chance that things could even change between when we're recording this and when this gets posted,

22:06we hope not, but Jordan, thanks very much for your time. Nice to talk to you. Thanks, Dave. 10th Re is produced by Sean Knox, theme music by Bryce Hall. Thanks to my guest, Jordan Gowling, more from her at nationalpost.com. I'm Dave Brakinridge. Thanks for listening.