Transcript:
SCOTT SIMON, HOST:
Crucial trade talks between the U.S. and Canada fell apart last night. The U.S. began to impose steep tariffs on a wide range of Canadian goods worth over $20 billion. This morning, Prime Minister Mark Carney said that Canada will impose retaliatory tariffs on September 8. Peter Armstrong is the CBC’s senior business correspondent and joins us from Toronto. Thanks for being with us.
PETER ARMSTRONG: Good morning, Scott.
SIMON: What products are going to be subject to tariffs now? What does this represent for the two countries?
ARMSTRONG: This is something of a disaster and not just for the Canadian economy, I might add. This is – it’s not just the tariffs that will be catastrophic, though they’ll hit very hard where they hit. The uncertainty, I think, is certainly the bigger picture. This latest swath of tariffs will cover this very broad range of goods from hockey sticks to honey to cement and wood products – so stuff that you really do need, other stuff that you could probably go without, at least for the moment. But it adds to the uncertainty that has plagued not just the Canadian economy, but the North American economy really since Donald Trump started with his threats in tariffs against Canada when he first came to office, you know.
And it’s – as I say, it’s not just the tariffs. You have to factor in the breakdown of talks might even be worse than the tariffs themselves. The fact that one of the things that they were working towards was a broader renewal of the USMCA Free Trade Agreement, and that certainly seems to be off. And, you know, we have all kinds of reports that show if those talks really do fall apart, it could lead to job losses on both sides of the border to the tune of about 214,000 jobs in the U.S. alone.
SIMON: Well, as you know, the U.S. and Canada have – as a matter of policy, have had highly integrated economies for over 30 years now.
ARMSTRONG: Indeed.
SIMON: Is this breaking down?
ARMSTRONG: It is. And, you know, there’s a difference – and I’m not sure everybody clocks this – but there’s a really important difference between the kind of business Canada does with the United States versus trade it does with any Asian or European country. You buy and sell stuff from Europe. In Canada and United States, we build stuff together. And so those highly integrated supply chains are like part and parcel of business and business investment, the business environment. And trying to unwind those is an incredibly difficult and hard thing to do.
And, you know, this is compounded, of course, by – it’s not just the tariffs. It’s the threats that Trump has made about Canada becoming the 51st state that just infuriated people here – the disrespect the administration has shown, calling the prime minister governor. Howard Lutnick said Canada sucks at a conference in the spring. So the state of relations between the two countries and the two economies is really at a low point.
SIMON: Prime Minister Carney issued a statement saying Canada would impose retaliatory tariffs. How much leverage does Canada have?
ARMSTRONG: Well, it depends on how bad he wants to make it. You know, remember, 25% of the oil that goes into refineries in the United States comes from Canada to make gasoline. And, you know, farmers rely very heavily on potash and on critical minerals. And interestingly, the stuff that has had the biggest impact – at least the administration has responded to – hasn’t even been the federal government’s response and countertariffs. It’s been more grassroots stuff. The provinces have taken American booze off the shelves, and that’s cost as much as a billion dollars in terms of Kentucky bourbon and California wines not being sold.
Canadians spent three, $3.5 billion less on travel to the United States in 2025 because of a grassroots boycott of travel to the United States so long as tariffs are in place. So there are multiple prongs to what Canada can do. And, you know, remember, the impact of the tariffs that Donald Trump is imposing on Canada are paid by American consumers, American business, driving up the cost of everything they buy and source from here in Canada.
SIMON: Quickly, Prime Minister’s decision to walk away popular in Canada, you think? You’ve had 9 1/2 hours to test public opinion from…
ARMSTRONG: (Laughter) Yeah.
SIMON: …Coast to coast.
ARMSTRONG: The anger towards the United States in Canada right now is ferocious and the support for the prime minister is very widespread. We’ll hear from him today about what he says happened versus what the Americans say happened, and I think we’ll see how Canadians react to that.
SIMON: Peter Armstrong, CBC. Thanks so much.
ARMSTRONG: Oh, you bet.
