Front Burner - Election! Fallout from Trump’s trade bomb

Episode Date: April 4, 2025

Canada may have dodged the worst of Trump’s Liberation Day tariffs, but it didn’t emerge unscathed.U.S. President Donald Trump confirmed that he is going ahead with a 25 per cent tariff on "all foreign-made" automobiles – a devastating blow for the Canadian auto sector, plunging it into uncertainty.Aaron Wherry, a senior writer with the CBC’s parliamentary bureau, joins the show to discuss the fallout from Trump’s latest levies, how Canada’s political leaders are responding and what it all means for the final weeks of the campaign.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

There are two kinds of people in the world. Backward thinkers and forward thinkers. Forward thinkers have plans 15 minutes from now and 15 years from now. They're not just one step ahead, they're 1,000 steps ahead. And when you're a forward thinker, you need a platform that thinks like you do. Workday's AI illuminates decision-making and reimagines how you manage your people and money for long-term success. Workday, moving business forever forward. This is a CBC Podcast. Erin Wary, hello. Hey Jamie.

And hello to everybody else who's listening as well. Erin is, as many of you already know, my colleague and the CBC's senior parliamentary reporter. And today we are going to discuss the fallout from the vast, vast global tariffs that Trump announced Wednesday, how it will affect the country, and the election campaign moving forward. All right, let's do it. So, Erin, let's start with the press conference that Prime Minister Mark Carney gave starting

late Thursday morning. He paused his campaign to deal with this. He was responding to the global tariffs announced by Trump Wednesday that Canada dodged, but Trump did come for us first. We are currently facing auto tariffs that went into effect Thursday aluminum and steel tariffs and the energy sector at a lesser number. These are big, big problems. And so big picture. What did we hear from Mark Carney on Thursday? I think there were a few different messages. One was to remind Canadians, I think that even though, you know, what Trump

announced yesterday didn't add anything to what this country and its economy is facing, there are still these previous rounds of tariffs that Canada is dealing didn't add anything to what this country and its economy is facing. There are still these previous rounds of tariffs that Canada is dealing with. The sort of quote unquote, fentanyl tariffs for lack of a better description, the auto tariffs, the steel and aluminum tariffs. There are still these problems that Canadians face. And so I think he seemed to kind of go out of his way to kind of remind people of that. So while it's progress that further tariffs were not imposed on Canada yesterday,

the president's actions will reverberate here in Canada and across the world. Three sets, three different sets of US tariffs remain in place and will continue to pose significant threats to Canadian workers and Canadian businesses. Because I think there was an initial reaction yesterday of, oh, you know, Canada has sort of escaped the worst. So he was, you know, I think stressing that this is still going to be very difficult, there are still these problems, he, you know, was outlining exactly what Canada is going

to do in terms of response, in terms of retaliatory tariffs. You know, he made the commitment that all, and I repeat, all of our tariff proceeds will go to protect workers affected by the tariffs. And then I think he was really, you know, trying to underline a point he started to make kind of more explicit last week, which is this idea that the old relationship between Canada and the United States is over. And really stressing that something has changed here, that the United States, the idea we had of the United States has changed, the way the world, the global economy works is changing and that this is going to require a big effort and a lot of change going forward.

The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States that Canada has relied on since the end of the Second World War, a system that, while not perfect, has helped to deliver prosperity for our country for decades is over. Our old relationship of steadily deepening integration with the United States is over.

Fair for me to say that there were parts of that speech that really felt like it was a wartime speech. Yeah, I think that's exactly true. You know, his language on this is so stark in terms of the idea of, of American leadership, economic leadership is over the idea of a deepening, you know, the old relationship is over. I thought it was interesting when he said it last week for the first time, it really resonated in particular in the international press. And I think it was because they could look at this even maybe even more than Canadians could and say, Oh wow, like this is the leader of Canada's,

of the United States' closest neighbor and friend, at least up till recently, saying that something has changed. And then he sort of segued into this, Mark Carney segued into this section about speaking to a teacher who had assigned her students this assignment to talk about what they saw in the future. And he quoted, I think it was one particular student talking about how they were worried

about tariffs and about Canadian sovereignty. And I think that really kind of underlines this idea that the country is facing, I don't know if it's quite existential, but the sort of massive challenge that is going to take massive effort to respond to. So to those kids at Glenn Williams Public School, don't worry. With your spirit, with that of your parents, their friends, and people like them across this great country, all pulling for Canada, We will build an even better Canada for your future because that's who we are. The only other thing I can compare it to is really the COVID era when, when Justin Trudeau

talked about Canada in that sense of like everyone coming together to face this sort of massive external challenge. Those moments you just talked about really stood out to me. The other one that really stood out to me was when he talked about how things were going to hurt moving forward and that he didn't want to give people false hope. The president believes that what he is doing is best for the American economy. He believes that it's best for American workers. And although their policy will hurt American families, until that pain becomes impossible

to ignore, I do not believe they will change direction. And then later, when he was taking questions, he was asked if Canada was headed for a recession. And he also gave a pretty somber answer there Basically saying that it started with it starts with a global economy There is a possibility of the US heading into a recession. It is usually the case That when the United States has a recession that it's very difficult for Canada to avoid something similar We need to take action now for short-term support

and reimagine our economy for the medium term. Talk to me more about his plan moving forward. What is it exactly that he says he and his government are doing in the short, medium, and then long term? Yeah, just before I get to that, just to build on what you just said there, like, I do think there is sort of an implicit hope or understanding that, you know, these tariffs will cause hardship for Americans and Americans will respond to that and that will sort of restrain Donald Trump. And I think I thought it was interesting that Carney was sort of preparing Canadians

for the idea that like, this isn't going to be maybe a 24 hour, 48 hour thing where the stock market plunges and then Americans are mad. And then Donald Trump responds that this could be a very long process and that the idea that Americans may suffer pain and Canadians may suffer pain. I think there's also again, this idea of like, let's not take yesterday as a good day for Canada. It is going to get hard. Then casting forward his idea, right, is, I mean, I guess there's a few parts to it. One is, you know, the retaliatory tariffs and providing immediate support for people that are impacted. The other was he introduced this idea of banding together with other quote unquote like-minded

countries, you know, referred to several European nations and Mexico in that context. And then he talked about an idea he's also sort of offered before, which is... We will need to do things previously thought impossible at speeds we haven't seen in generations. Breaking down internal trade barriers so that we can have one Canadian economy, not 13. Making Canada more productive and competitive. Building things in this country again. Millions more homes. Building clean and conventional energy. Building more public transport, more mines, more assembly lines.

Building new trade corridors with reliable partners. This idea of real significant economic and industrial effort to build resiliency in the Canadian economy and I guess, you know, really deal with this new reality that we're facing. And just on the retaliatory tariffs, probably worth us mentioning like the new ones that he announced today,

Canada will be matching 25% tariffs on non-CUSMA vehicles made in the US, and it will not affect auto parts and will not tariff Mexico. So that's the new retaliatory tariff added to the other ones that we already have. This idea that we may ban together with other like-minded countries, you know, at one point he said, And if the United States no longer wants to lead, Canada will.

I can also see how this could put a leader in a bit of an interesting dilemma moving forward, right? Like, where you're having to deal with whether or not you are banding together with other countries or trying to negotiate the most favorable deal for yourself with the United States, right? Yeah, I do think there is kind of this emerging question or debate or discussion about exactly how Canada is navigating this reality. Are we trying to find common ground with the United States and get these tariffs off the table? You've heard Doug Ford, the Ontario premier talk about an Amcan fortress.

Are we trying to sort of pivot to other alliances, other trading partners, other nations? Where do we kind of fit in this? And I, you know, I'm not an international relations scholar, but I suggest, I suspect the answer is probably a combination of the two, but it's, it does seem like that as part of the, the discussion that maybe needs to be had going forward is. You know, yes, we have to deal with these tariffs and yes, we have to figure out how we're going to have trade with the United States and Mark Carney talked today about Still being you know security allies and partners with the United States But but to what degree are we trying to keep relations with the United States and to what degree are we? Trying to find stronger and new relations with other countries There are two kinds of people in the world. Backward thinkers and forward thinkers.

Forward thinkers have plans 15 minutes from now and 15 years from now. They're not just one step ahead, they're 1,000 steps ahead. And when you're a forward thinker, you need a platform that thinks like you do. Workday's AI illuminates decision-making and reimagines how you manage your people and money for long-term success. Workday moving business forever forward. I'm registered dietitian, Abbey Sharp, and on my new podcast, Bite Back with Abbey Sharp, I'll be dismantling the multi-billion dollar diet industry that keeps us in a cycle of self-loathing and food fear.

Join me every Tuesday for expert interviews, engaging conversations, and my signature science and sass to bust myths, correct misinformation, and help you break free from diet culture for good. that's correct misinformation and help you break free from die culture for good. Listen for free on the Seeker app or wherever you get your podcasts. Okay, let's move on to Poliev now that we have a bit more of a sense of what Carney is trying to do here moving forward. Dealing with Trump has become arguably the most important issue for voters. So I think it's important to figure out how these two men diverge here. We heard from Polly about some length on this before Carney spoke on Thursday. He laid out some plans

the day before as well. And just tell me what it is that we are hearing from him. Yeah, I think Polly of a set of few things. I mean, first on Thursday morning, I think he tried to imply or more than imply that Mark Carney had sort of failed to stop the tariffs that are coming that just last Friday. Mark Carney said he had a quote, very productive, very constructive call with President Trump citing progress. Unfortunately, Canada has not been spared. There is no progress and there was nothing constructive or productive about Trump's tariff announcement. So I think he was, I think trying to undercut our Carney with that argument. I think the other pieces he has tried to kind of build around that are his proposal at this point is that he would say to the United States, let's have a kind of expedited renegotiation of the Kennedy United States-Mexico free trade agreement.

That will allow us to find certainty. I will also propose that in the meantime both sides suspend tariffs. To be clear, no counter tariffs from Canada will be removed unless and until the Americans do the same. But the argument to President Trump will be this. Put aside the uncertainty, the job loss and stock market crashes on both sides of the border, pause the tariffs until we can hammer out a deal. I think it's interesting and to a certain extent that Pierre Poliev says let's renegotiate the existing agreement. Mark Kearney sometimes seems to cast it as let's have an entirely new agreement. I don't, it's hard to know exactly whether there's a big difference there, but I think there's a slight difference right

now it seems. And then, you know, the other piece of this for, for, for Pierre Poliev is that his focus on it would be on strengthening the Canadian economy so that it is not in his words under Trump's thumb anymore. I think at this point, there's a bit of a divergence if there is one on sort of how they're framing the situation. I find Mark Carney's language far more stark in terms of the world has changed, you know, and we need to adapt to this new world. And Polyevs is a bit more straightforward in terms of, uh, we need to renegotiate, uh, Cosma, and in the meantime, we need to strengthen the Canadian economy so it can withstand these threats.

Right, right. He seemed to imply that, like, to entice the Americans, the revenue from, I guess, like, this expanded trade from the negotiation would all go to... To massively rebuild our military so that we can carry our weight and keep our continent safe. This will create a powerful incentive for Americans to say yes, but of course, there's no guarantee with Trump. Which is sort of like a carrot to give them. Yeah, it's a kind of a deal where it lets, you know, no guarantee with Trump. Which is sort of like a carrot to give them.

Yeah, it's a kind of a deal where it lets, you know, the Canada and the United States renegotiate the expanded trade that results from that deal helps Canada increase defence spending which everyone has sort of taken as a thing the United States wants. And then Canada can sort of hold up its end of the bargain for sort of continental defense. I think if there's a sort of point there that needs to be drawn out more, it's to what degree are we actually looking for expanded trade with the United States? It is one thing if you go back to a speech Pierre Poliev gave earlier this year, where he had a big rally and it was a Canada first rally in Ottawa and he gave a sort of big

set piece speech. He held out the option to the Americans of, you know, more trade and more cooperation on defense. And I don't want to say that we've heard Mark Carney sort of rule those things out, but when Mark Carney talks, it certainly doesn't sound like more, more integration with the United States. It sounds like less integration with the United States. And so I, you know, we've got a few weeks left in this campaign. I'm interested to see whether

that becomes kind of a point of debate. Look, why do you think that that divergence exists right now? Why we have one candidate really talking about how the world has changed as we know it. And the other one, I think probably fair to say, focusing on kind of more practical solutions to the crisis that we find them, find ourselves in. Certainly is not downplaying the fact that we're in a crisis, but. Yeah. I mean, I don't, this requires some speculation, but I, it feels a bit, you know, I think there was a time when, when there was, uh, there was more sort of a

belief that the future lay in sort of more work with the United States, you know, on critical minerals, for instance. And it starts to feel like Mark Carney is looking at this and saying, no, the idea of being closer to the United States, like, we actually need to pivot away from that. You know, there's always been talk about trade diversification in Canada going back decades and are we relying too much on the United States? And I think there's a certain commonality between Poliev and Carney in terms of both saying, you know, there needs to be less reliance. We need to be more self-sufficient.

The economic plan I've been announcing throughout this election is to unleash our industry, to make it strong, self-reliant, sovereign, so that we can stand on our own two feet and stand up to President Trump. But Carney seems to be pivoting, seems to be taking a view that what's going on is much bigger than a tariff battle or a trade war. And it's more of a fundamental change. I think the first sentence out of his mouth when he appeared before reporters the, uh, the night on Wednesday night after the tariffs came out was. President Trump has just announced a series of measures that are going to fundamentally change the international trading system.

It would appear at least that Mark Carney is taking a view that this is a much more fundamental long-term change in the way the world works. And Paulia's view is maybe not quite there yet, or it is not quite taking the same view. As we know, one sector that is being hit extremely hard by these tariffs is our auto sector. There was already been the announcement of the Stellantis plant in Windsor pausing its operations. Thirty-six hundred workers will be affected.

They're also pausing operations in Mexico. Hundreds of workers have been laid off in the US as well. And Polly have announced that the sales tax on Canadian-made vehicles is going to be eliminated under his government. Axing the GST on a $50,000 Canadian made automobile will save $2,500 to the car buyer. By saving cash. Both of these guys are really talking about the Canadian auto sector quite a bit. Yeah, I mean, I think, you know, it should be noted the NDP was quick to point out that they, uh, uh, proposed the GST cut on cars earlier, but there is a kind of

convergence here on we need to do something about the auto sector beyond, uh, supporting workers. We are developing a framework for auto producers in Canada to get relief from these counter tariffs as long as they maintain their production and investment in our country. Importantly, every single dollar raised from those counter tariffs, our counter tariffs, which could reach around $8 billion before remission will go directly to our auto workers and the companies affected by those

tariffs. Carney was in Windsor last week and laid out this idea of a $2 billion strategic fund to help the industry and workers, you know, with the goal in his words of building a made in Canada auto supply chain. I think that is another point where there's at least some conversions on the idea that something needs to be done to, to help the Canadian auto sector. I think there's still a debate to be had about exactly again, what that looks like in terms of, are we still integrating, are we still for the most part integrating our, our car

or automotive industry with the United States, or are we building something completely different? Just talking specifically about the election campaign that we're in, I did want to bring up two things that feel like real advantages for Carney as the incumbent in this moment, right? Because he can like put on his prime minister hat and actually do the work. One thing that struck me is that after both men gave their speeches on Thursday, Carney really only took questions on the situation with the United States and on the trade war. And Poliev was thrown a whole bunch of other questions, right? Now he's talking about whether or not a John A. McDonald statue should be put up in Kingston.

I believe we should put the John A. McDonald statue back up. I mean, you agree with that? What do you think? He's answering questions about how his party has turfed four people in a matter of days for inappropriate stuff. Another conservative candidate has been dropped from the campaign over alleged social media activity. This comes after three other conservatives were dropped.

Mark McKenzie was dumped after CTV news obtained an audio recording of a 2022 podcast in which McKenzie supported public hangings. The liberals have also had a problem with this too, but do you think that matters to the campaigns here? I'm sure for the liberal campaign, they don't mind Mark Carney looking prime ministerial. And the questions that he got as opposed to the questions Pierre Pauly have got really go to the fact that Mark Carney has more to answer for and more to talk about now. You know, he is the prime minister, he is in charge at this moment, and so his response,

you know, he has more to be asked about and he has more to say. Pierre Poliev is obviously running to be prime minister, but he can still sort of only talk at this moment about what he would do or But he can still sort of only talk at this moment about what he would do or, or, or what he thinks of, of what Mr. Carney is doing. I know that the NDP has, as we've been talking about on the show, has been really quite sidelined here for the moment in this campaign. Their support is really bottoming out, but they did pitch something today straight out of the first World War. And just tell me about this.

Yeah, it's, you know we're in a strange time when we're talking about victory bonds again. Instead of relying solely on banks and paying debt and interest to those banks, let's pay interest to Canadians instead. And so I'm inviting Canadians to do their part and this would be a way to do so. You know, this idea that you would sort of invest money in the, buy a bond from the federal government and they would promise you a rate of return and then they would use the revenue from selling these bonds to fund the, you know, sort of economic response in this case to the trade war. And this is, this is an idea straight out of wartime.

In fact, during the World War, victory bonds raised more revenue than taxes because Canadians were so committed to doing their part. So right now, for Canadians who are wondering, how can I contribute? A victory bond would be a guaranteed investment where you would purchase a bond, a five year or 10 year. And if you hold it to maturity, you would get all the revenue tax-free. It's been sort of kicked around a bit in the last little while, as maybe something that needs to be brought back.

It is, you know, as you say, the NDP is really struggling to be in on this conversation because the polls show that there's sort of a clear kind of two leading options to be prime minister. And Jagmeet Singh is really having a hard time sort of elbowing his way into this conversation. So this is, you know, maybe something that gets them some attention and gets them maybe a bit more traction than they've had in the first two weeks. I know we've been hitting on this throughout the conversation, but I do want to talk about the campaign moving forward here.

Like, I thought it was interesting to hear the bloc's Yves-Francois Blanchet Thursday say that he thinks now we will be able to have a more normal campaign because it's clearer that negotiations will start with the United States after the election. I don't know about that. I would like love to hear your thoughts on how you think that this is going to play out from here, but it feels like we're heading into a second phase here. Canada was really the focus of Trump's taunts and ire and ridicule for many, many, many months. And now it does seem like he does have all these other targets, other countries that he's now going up against. So how do you think all of this is

going to play out in the campaign? What challenges does each candidate face? So if one was a cynic, I suspect they would, they would say that, that Mr. Blanchette would like the Trump issue to go away because it would probably be easier for him to, again, similar to the NDP, get into the conversation if there was less concern about Donald Trump. Uh, I think though that it's really hard to look at this and say, oh, okay, let's put Donald Trump aside for a few weeks and we'll come back to this later. As we've already said, there are still tariffs coming, there are still going to be impacts. And beyond that, as we speak, international markets are crashing and flipping all over the place. There are going to be

retaliatory actions from other countries. You know, maybe there's a global recession, maybe the U.S. goes into recession. It's hard to say that Donald Trump is a reality that that Canadians can afford to sort of talk about later. And I think the conversation sort of seems to me to keep evolving. First, it was what are we going to do about tariffs? Then it was, oh, maybe he wants to annex us. So how should we respond? This is an

attack on our sovereignty. And now I think the conversation is again sort of moving. If Mark Carney is right, and if maybe he's, you know, maybe the debate turns to that is, okay, well, where, what does the world look like now? And where does Canada fit into that? And to even go back to one of your guests earlier this week, Jason Stanley, the professor who's moving to the University of Toronto talking about Canada and the Ukraine being at the forefront of the fight for freedom against, you know, neighbouring authoritarian dictatorships like that. You know, you hear something like that. And again, it's hard to say, okay, well, this is really just about tariffs. And so I think there's still a lot here to work through.

Uh, and I think to a certain extent, even maybe Canadian leaders and Canadians are sort of working through what the ramifications of it are. I mean, I think the other piece of this is it's hard to know. It's hard to know what Donald Trump is going to do from one day to the next. And so the idea that, that Canada has been spared for their tariffs or that we kind of know what the state of play is now, I think that's a hard assumption to make. Erin, thank you as always. And, and I should say, I will I will say, we'll give everyone listening more

information soon, but you're going to be with us on election night. We're going to do like a live stream. It's going to be on YouTube. We'll let you guys know soon where everyone can catch it, but it will be great to have you. Always happy to hang out. Okay, that is all for this week. I just want to note before we go that there were some really important policy announcements made this week during the campaign. Big announcements from the parties on housing, for example. We are going to get to that. I promise.

That is all for today though. Frontburner was produced this week by Matthew Amha, Matt Muse, Ali Janes, Joytha Shangupta, Kieran Outhorn, Lauren Donnelly, and Mackenzie Cameron. Our intern is Iza Adil. Our video producer is Evan Agard and our YouTube producer is John Lee. Our music is by Joseph Shabason. Our senior producer is Elaine Chao. Our executive producer is Nick McKay-Blokos and I'm Jamie Poisson. Thanks so much for listening and talk to you next week. For more CBC podcasts go to cbc.ca slash podcasts.