The Bridge with Peter Mansbridge - Can Anyone Stop Donald Trump On Tariffs? - Encore

Episode Date: April 9, 2025

An encore of trillions of dollars, have been lost; thousands of jobs, in real life, have been lost in Canada alone; all because of Trump's tariffs.

And hello there, Peter Mansbridge here. You're just moments away from the latest episode of The Bridge, and the latest episode of The Bridge is our encore edition for this week. We go back just two days to Monday's program with Dr. Janice Stein from the University of Toronto's Munk School. The topic? Donald Trump, tariffs, and the impact on the world. and hello there peter mansbridge here hope you had a great weekend it's monday beginning of yet another week in a tumultuous world you know look anywhere and what do you see you see some combination of chaos and well whatever it's crazy out there and the stock markets continue their wild ride as a result of the tariffs that were introduced last week by donald trump everybody reacting to it and today we talk to dr janice stein as we always do on Mondays.

Janice from the Munk School at the University of Toronto. And we're going to talk about Donald Trump. And we're going to raise the question, is there anyone on the other side of this issue who can lead the world against Donald Trump? Is there a need for that? We'll have that discussion with Dr. Stein. A couple of notes about the week ahead. Your turn this week is once again, your answers, and there were so many of them, right? A couple of weeks ago that we stretched it into three different shows. And we'll do that again on Thursday, along with the random ranter. The question, of course, was what do you see as the major issue, aside from Trump, in the 2025 federal election campaign in Canada?

And we're only, what, three weeks away from it now. Next week are the debates. Those are big. Okay. Let's move on to my conversation with Dr. Janice Stein for this week because it's a really good one, as they all are. But I really like this one, and I hope you will as well. Here we are, Dr. Janice Stein. Janice, I think we've all assumed that one of the things that Donald Trump is trying to achieve

is to change the world order as we've known it. We've certainly seen him on NATO. We've seen him in his alignment with Russia. And now it appears that we're seeing it on the world financial markets as well. Do you think that this whole issue on tariffs is going to change the world order as we know it in terms of economies and finances? This is the biggest outright attack by the world's leading trading country on the system that it built, Peter. So the big question is, what comes next? Does the attack succeed?

Does free trade take a body blow? You know, the gloomiest are talking about retreating behind tariff walls. I don't think that's where we'll be five years ago, but I certainly think that the trade five years from now. But I certainly think the trading system has taken a huge hit. I think countries will adjust. They will. And this is the irony. They will go around the United States to the extent that they can. They will trade with each other. They will trade with the United States where Trump makes it possible. And if he doesn't, they're going to go around.

Well, that's where I'm a little confused because clearly some countries, Canada included, are suggesting exactly that. But Trump saying over the weekend, and I guess it comes down to the normal thing with Trump is whether or not to believe him. But he said that 50 countries, 50 leaders of countries reached out to him over the weekend to make a deal. Well, you know, there's a little bit of trump uh exaggeration there but he's not wrong we're gonna do that and and the question is what's the deal right so let's divide the world up into tears canada and mexico have the strongest incentive to make a deal. Any deal we can get that's reasonable, that doesn't tear us apart as a country, frankly. We live in North America. We live next door

to the United States. And for us to go around the United States, for Canada and Mexico, it is harder than almost any other countries in the world. The European Union, 450 million people, a very big market. Now, the European Union exports to the United States' biggest customer, so there will be a big shock, the european union really does have options it can and and here's let's just go down this rabbit hole for one minute because i think this is the one to watch the relationship between the european union and china you know if you're sitting in beijing or moscow you're clapping your hands with glee.

It's just, you've gotten a huge present. But the Chinese economy can't absorb what it makes, Peter. They could swamp the European Union, take cars. That's the easiest, most practical example. If there weren't tariffs that the Europeans put on Chinese cars, there'd be no German car industry at all. Be gone. They're cheaper and they will get better.

So they would wipe it out. So the Europeans stand at a really important inflection point. Do they want to become the importer of Chinese goods that are cheaper and competitive and haven't, in a sense, what the United States most fears, that manufacturing disappears as it moves to a country that can do it cheaper? Or are they going to keep tariff laws against China? If they do, that's the other big sucking market in the world.

If they do, then we're going to see the regionalization of the global tariff systems. Here's my... And it's not black or white, by the way. You're so right to make that point. You're sorry, people are going to make the deals they can. Mark Carney said that, right? He said, after the election, we'll go into a negotiation. If he wants, we will go into a negotiation.

The gift still. We will go into a negotiation. Big if still. We will go into a negotiation. And we will make a reasonable deal. We're not going to give away the store. We will make a reasonable deal. But we will put a lot of energy into diversifying.

And you know me, I am a skeptic of how far we can go on that. I'm probably on the more skeptical end of this discussion in the country. I think it's very hard. But a version of that is what everybody's going to do. Here's my problem on this issue, because I understand and appreciate the size of the American market and how you can't ignore it as a potential customer and trading partner. However, why would anyone, Canada especially, sit down and sign a deal with Donald Trump when we did exactly this a few years ago?

And in spite of what he says today about who could have been so foolish to sign this deal, he signed it. He did the deal. So why would you sit down and do another deal with him, which two years down the road, if it's not working out for him, he'll say the same kind of thing, which fool signed this thing, and rip it up.

Why would you sit down with him? You know, that's a really tough question, but there's an answer now that there wasn't before last week. What did he do on the tariffs to Canada and Mexico? He said anything that's compliant with USMCA is going to cross the border into the United States without tariffs. So even this lawless brigand, which is the best way I can describe him, respected the boundaries of the USMCA. So 38% of what we sent to the United States today will be going into the United States tariff-free under that agreement. That's a pretty good reason.

Yeah. No, no, I understand. I appreciate that. I still, you know, that's what he says today or what he said last week. Who knows what he'll say this week? Yeah. I mean, it's the problem with dealing with him. The other problem with dealing with him is looking at the lineup behind him.

Take this weekend, for example. He says, on one hand, I'll never negotiate. Then, you know, an hour later, he says, I'll negotiate. His people behind him who don't look 100% convinced on this thing, I've got to say. No, they don't look 100% convinced on this thing, I've got to say. No, they don't. But take the initial stand by Trump and say, we'll never negotiate. Now they're starting to say, well, you know, maybe we can negotiate. It looks, I don't know, perhaps this was the plan all along?

Perhaps not. It looks chaotic. I don't think it was the plan all along. Perhaps not. It looks chaotic. I don't think it was the plan all along. And I think it is chaotic. And it is chaotic. Everything we learn about the way this White House is functioning, this is chaos. There's no orderly planning process. There's nothing that resembles what we would normally expect of a president or a prime minister going. So there are two or three champions of this stuff. That's all in the White House who are true believers. Donald Trump is one. Peter Navarro, very familiar to Canadians. And by the way, long had Canada in his line of sight.

Going right back to the first Trump administration, is a powerful, true believer, advocate in this stuff. J.D. Vance, an attack dog who is hard to sometimes decode what he truly believes. But there's just a small group. The rest of them, you could see they make a comment. Trump contradicts them. They don't stand up. They don't challenge because they know that if they do, they're out. And so it is chaos.

The bigger question is, what does Trump think himself? Well, he truly believes, Peter, that the United States has been impoverished by trade and that a trade deficit is a terrible thing to have. That is just not correct. Let's start there. The fundamental argument, the fundamental belief is wrong what's a trade deficit your

your your people are buying more than the country itself who does that affluent people who live

in a dynamic economy which generates enough wealth so that you can buy stuff. You know, a poor country might have a trade surplus. So it's a fundamental misunderstanding. Andrew Coyne had a really good piece this weekend in The Globe

about how deeply wrong he is about what a trade deficit means. But this is his simple-minded view, which is wrong. So it's not only what Europe does here and what China does. What's he going to do when the economic pain really starts to hit home. How many parts manufacturing plants are going to move from Canada to Michigan or Ohio? Frankly, first of all, AI is coming for them anyway. And they're going to be 3D printed in 10 years. But leave that aside.

How many are going to invest and build a new plant in that United States, which is so chaotic? It'll be marginal and there will be a terrific economic hit to the United States. The biggest loser in this whole trade war. The other thing is, if they did move, and it's a big if, as you just explained, if they did move, they wouldn't be going to Michigan. No. They'd be going to states in southern U.S., which offer a much better deal. So this whole thing about recreating the jobs of the past in Michigan or other northern states is, you know. Is a myth. Is a myth.

It's fantasy. Seems to be a myth. Yeah. One thing that you say is true is that he didn't suddenly dream this up last week. Trump has felt this about trade deficits and about tariffs for decades. Forty years. Forty years. The proof is in the pudding of past television shows and things that have been written for him. So let me try to understand that, because clearly if this guy was a student of history, which he's never, with very few exceptions,

he seems to like stories about the 1930s in Germany, but if he was a student of history on tariffs he would see the terrible record major shifts to tariffs have had in the united states and he totally he's totally ignoring that uh it really is astonishing you know if you just go back and look at the 30s and the famous Smoot-Hawley tariff act, that was done for the same reason, right? To improve America's economic position. It led to the worst economic depression. The modern world is everything wrong.

The Great Depression, the 1930s. How did that happen, Peter? Countries retaliated. And that was the story of this weekend. Not that he did this, although it was pretty bad. The scope and extent of it was worse than almost anybody thought. But the Chinese retaliated. And with a significant level of tariffs on U.S. products.

If we begin to see that, the Europeans are still, they're talking, but they're holding their fire. Mexico, probably the most disciplined leader is Gloria Scheinbaum. It's just an amazing story. But if we see this dynamic where there's a tit-for-tat escalation in tariffs that impoverishes everybody, trade declines, and that's the big debate everybody's having now. Which road do we go down?

Do we go down an escalatory response where everybody ultimately loses? Or do we do what we can with the United States, but go around? And that's a real option for the Europeans. It's an option for the Japanese. And, you know, these are decisions ultimately. Nothing's predetermined here.

That's why we elect leaders to make these tough calls at these hinge moments. You know, the Chinese met last week before the announcement with the Japanese and the South Koreans. of the most constructive, friendly, good vibe meeting that went on between those three because there was a lot of fear in Japan and South Korea of China. And so the expectation might have been the Chinese would go slow and wait and see. They didn't. They went all out right after.

That's one of the biggest reasons we had 20% wiped off the markets over that weekend since Trump became president. So it's not, this story's not only about the United States, but China, and it's about the European

Union too. What do they do? You know, it's interesting to watch groups like that form, like Japan, South Korea, etc. Because, you know, in spite of their proximity, it's not like they are the closest knit

community of countries. Japan and South Korea have had a terrible history. Japan and South Korea have had a terrible history. Japan occupied South Korea. There's this famous story of comfort women, Japanese soldiers who used Korean women. It's bedeviled their relationship for years. Joe Biden, finally, as a security threat has grown, finally got those two.

And by the way, it was the now impeached president of South Korea, who is an authoritarian personality himself, who could get above the noise in South Korea and make that happen. But there's a lot of tension in that relationship. So it's not easy. It's not easy for these countries to work together. And there's no country that worries more about China than Japan, from a security perspective. So what they're going to do, what the Europeans are going to do, Europeans are probably best positioned

because they have institutions, they're used to working with each other. They're big together. They know they are. They're proud. They look at these upstarts, you know, over the Atlantic Ocean and frankly say under their breath all the time, grow up.

But they export to the United States. They have a trading relationship with the United States. China is not a good option for them. And in that world, they will make the best deal they can and trade with each other. You know, let me just say this, Peter, there's a whole discussion going on right now in Europe and Ottawa about Canada joining and becoming, getting associate status in a new defense production agreement. Well, you have to ask yourself, how practical is that, right? So we have to separate the talk from what is doable.

You know, you keep hearing this stuff about the F-35 and the possible replacement of the Swedish fighter, the Griffin. Can I go off the deep end here and say, in a very balanced statement, that's lunatic. That is lunatic. A country like Canada cannot simultaneously run two air forces. It is lunatic. It will not happen. Okay, I'm going to save that piece of tape and we'll remember that.

I get why we might say it, because the F-35 said it's a multi-billion dollar deal for the United States and you're looking for levers. And by the way, there's no kills. The allegation is the United States, there's a kill switch and they could turn it off because they're the manufacturer and they're selling to the whole of NATO. And there is no kill switch in the M35.

There's something called software upgrades. Right. We all get those, right, on whatever phones we use. And those software upgrades come from the United States. And I imagine if they wanted to, they could find a way of shutting that down. Yes, they could. The upgrades. But imagine for them the nightmare that they have

allies that they have allies and they are shutting down the software upgrades who you know whose security are they degrading exactly let me ask this is the last question on this uh particular area before we take our break um you know clearly donald trump is the lead question on this particular area before we take our break. You know, clearly Donald Trump is the lead figure on one side of this argument. Is there a lead figure on the other side? I mean, there's, you know, you're always an expert at knowing what's sort of going on behind the scenes in these kind of conflicts, and this one a trade conflict. But is there a lead figure on the other side? assumes in these kind of conflicts, and this one a trade conflict. But is there a lead figure on the other side, you know, a Brit or a German or France? Is there somebody who's kind of running the game plan on the other side?

You know, the formal leader on the European side, right, is Ursula von der Leyen, who is officially the lead negotiator who makes policy. But if you actually listen this weekend, it's very, very interesting. There's such a division between the Brits and the Germans. You know, Germans, morally outraged. Former finance minister of Germany. And look, anybody would be morally outraged. And I'm not so much morally outraged as I'm just confounded by the stupidity here. This misreading of what a deficit means and the measures that you take.

Even the way they calculated the tariffs, they did it in a way. If you were in grade three and you did ratios in arithmetic, you could do it. This is the most sophisticated government in the world. And their calculation on how the numbers, how they got to the tariffs, just mind blowing, frankly, that this would happen. But the Germans are saying, we're done. We're done. This is the new hinge point. We have to build up Europe and trade amongst ourselves.

The Brits are not there. Keir Starmer's not there. And he's a Labour prime minister. He is, look, he will be one of the first to look for a possible deal that he can make. So the Europeans here, Peter, are not speaking with one voice. The Japanese are dealmakers. I was just in Japan. They were already there in their head.

They are dealmakers. So in that sense, there is not. There's no Winston Churchill rallying the world against the threat that's coming from washington that is not how let me let me just ask um you know if we if we weren't in an election campaign right now yeah and if mark kearney was the prime minister yeah he is the prime minister but if he wasn't facing an election campaign, which he could lose, given his background as a governor of two banks,

England and Canada, unlike anybody else that we can name off the top of our head, I assume he gathers some respect from those countries. Could he be in a position like that? I mean, he's one of the world's most sophisticated understanding of the financial implications of these tariffs, because that's really what's going to matter. How much are they going to depress growth over the next four or five years. He'd be a natural, Peter, because that's what he did do on the International Financial Stability Board, this kind of really expert, not well-known group of financial experts and central bankers who got together in the financial crisis when it could have crashed.

It could have crashed. There's no doubt that was a very dangerous moment. And they pumped cash, liquidity, into that system to prevent it from crashing. But he didn't, quietly, without a lot of publicity or fanfare, unless you were watching, you really didn't know. So a different Mark Carney may come out of this election if he wins than the Mark Carney that is in the middle of still what remains a close election in Canada.

He will have a stronger voice, I think. All right. We're going to take our break. When we come back, we're going to talk about the Middle East because things are happening. And we want to get up to date on that. So we'll be back with Janice Stein right after this. And welcome back. You're listening to the Monday episode of The Bridge,

and that Monday is like all Mondays. Dr. Janice Stein is with us from the Munk School at the University of Toronto. Let's talk Middle East, and we're talking about it because a number of things are happening, including Benjamin Netanyahu is in Washington today for meetings with Donald Trump, and I assume those meetings will deal both with the trade war, because Israel has a lot at stake on that one as well, with terrorists being implied against them,

and there's the situation in Gaza, which is horrible. And there are a number of things happening there, including Gazans themselves protesting against Hamas in a way we haven't seen before. So there's a lot of things at play, if you wish, here. So take us through what you see as the most significant. You know, Netanyahu is in Washington today because in an off-the-cuff comment, in a conversation with Donald Trump,

he was invited to come. And again, this is part of the unplanned way, because the presidential visit, the visit to see the president, it's a big deal. It's a big deal, and it's usually used as a reward. That's not what Donald Trump does. Gaza, as you said, you know, the terrible story about aid workers that were killed, which the RDF initially denied and has now said, in fact, yes, something went very, very badly wrong, but 15, Peter, killed. It's a symbol, I think, for the larger situation in Gaza, which has very

different two sides of the story, right? One, not enough food again in Gaza, very, very limited amounts of flour, bread, which is pushing that population, and that's what you talked about, to actually come out now and say, enough, we're not interested. People are putting their lives at risk in Gaza by demonstrating because we know that after the first round last week,

two were killed. They were taken by Hamas, two of the demonstrators. They were tortured. One died and another is missing. So you're putting your, it's not like going out to a demonstration in Toronto or Paris. You are putting your life at risk when you do this. But there is a feeling among the – and they hate both. They hate Israel for what Israel has done to them, and they hate Hamas. But that's a watershed moment when Palestinians are standing up and saying, go, go, we need an end to this. And that's what the strategy was designed to do, right? After that second long ceasefire when Hamas came out, fully clothed, fully intact, guns, there was a decision.

Okay, we're going to go back and we're not going to leave until these guys leave because there's no other way to remove Hamas from Gaza. This is all a war between Hamas now and Israel about who can endure the longest without much prospect of a compromise at all. And Trump walked away from the ceasefire. That was the only way that could have been extended. He Trump walked away from the ceasefire. That was the only way that could have been extended. He just walked away, lost interest, walked away. And as we see, if anything, the

conflict is escalating, not de-escalating. At the same time, I think Netanyahu is in Washington today not over Gaza. I think they're in Washington, one, because of the sanctions, you're right. And by the way, this was the first country dropped its tariffs against U.S. products to zero over the weekend.

They didn't make a deal. They just capitulate entirely, frankly. But I think whether there is over Iran. One alarming note in the last two days got buried in the whole big story about tariffs. The Iranian army is on the highest levels of alert. And the United States sent three batteries of missiles to Israel, anti-aircraft missiles. When that happens, that usually means one or the other side is expecting an attack.

And these things could spin out of control. They must calculate. Why are we here now? Donald Trump gave Iran. He wants, he's interested in negotiating an end to their nuclear weapons program. He gave them two months. Ayatollah Khamenei, after a lot of internal deliberation,

but he's got the final word on everything in Iran, rejected the offer. And so there is a widespread fear now that the United States will attack and go after those nuclear sites. And clearly coordination between Tel Aviv and Washington would be absolutely critical here. That's the last thing. I would just say this. That's the last thing anybody needs, given the instability that we already have.

I was going to say, you know, you can only have so many balls in the air. Yeah. And, you know, it seems like Trump has a lot right now. A huge number. A huge number. And by the way, and by the way, again, under the radar, he fired six of the top members of the National Security Agency, the head of Cyber Command and Cyber Security in the United States. So while all this is going, he has made the United States extraordinarily vulnerable to a cyber attack at this point.

And in a sense, if you think about us for a moment, although we don't think about ourselves right now this way, but if you think about Canada as part of North America, we are now living in a continent that is extraordinarily vulnerable to a massive cyber attack. Well, I'm glad you've left us with such a calming feeling about our world. Well, I'm relatively speaking less gloomy than other people about the global trading system. Right. We're going to trade. We've passed the point, Peter, where any country really believes it can make everything that it needs. And even if it could make it, it would be so inefficient.

Right. And in Canada, we certainly don't expect that we can. So the advantages of trade are so obvious. There is one point we should make. We trade hurt a lot of people, right? There was, you know, the Bill Clintons and the Margaret Thatchers and the Ronald Reagans. This was every, this was going to lift all boats. Everybody was going to be better off.

Well, it actually didn't. Lots of people lost jobs in manufacturing. More from technology than from trade. We know now that that's the case. But it certainly hurt people. And part of the reason Donald Trump got going on this tangent in the way that he understands it is that trade, free trade, was disruptive to established, you know, manufacturing, factories, plants,

and wiped out those jobs. And those are the voters. Those are the voters who are going to be with him all the way on this. You know, you knew and I knew Brian Mulroney. And, you know, I kind wish um that he was still alive today not that he was perfect because he certainly wasn't and he made mistakes but he was the architect of free trade yeah and between him and reagan they made uh they made the free trade agreement the initial one work and everything that kind of since then including kuzma because

he had a an influence with just Justin Trudeau on that one. But I would, God, I would love to know what he'd be saying today. You know, so would I, because not only did he have an influence with Justin Trudeau, he went down to the Trump White House and he worked with American officials during that period. I frankly think he would be devastated, Peter. He would see it as the undoing of his life's work, which in some sense it is. Because however we come out of this,

we're not going to trust the United States in the same way. There's going to trust the United States in the same way. There's going to be reservations, right? We will never wholly invest in the way that we have in an integrated North American economy, which is what Brian Mulroney really believed. And we've come so far along that road, but there are limits now. We all understand them.

Okay. We're going to leave it at that for this week, but we'll talk again next week. Thanks, Janice. Thank you. And let's have a good week, a quiet one. We'll try. Yeah. Let's have a good week, a quiet one. We'll try. Dr. Janice Stein, a regular on our Bridge Mondays, and we are so lucky. As I say every weekend, many of you write to me and say that as well. Even those of you who disagree at times with Janice's comments and opinions,

and that's okay. She enjoys that too. I mean, the whole idea here, as you know, from the beginning of the bridge is to throw it out there and you react one way or another. I enjoy your letters too. Sometimes we have some good back and forths about things that are said, and that's okay too.

All right, a couple of notes. You know, it's interesting because I've been throughout this day, as I'm sure some of you have, I've been watching the markets. I don't usually follow or tune in to CNBC, but I have today just to follow the kind of world markets. One of the things that I've noticed today, and you've probably noticed when you drive up to fill up your gas tank, if you still use gas, the price of oil has come down right it's now around 60 dollars

a barrel on the world price and what that means is your price of the pump has come down and you know not insignificantly too so that's the good of 60 dollars a barrel. Here's the bad, or the potentially bad. $60 a barrel is kind of the market which oil markets like Newfoundland's oil, offshore oil, Alberta's oil sands oil, $60 a barrel is kind of the mark that they look and say, you know, if it's less than that, it's too cheap for us to produce oil. We need a higher price than that. So keep that in mind during these turbulent times. Because, you know, if there's anything that could crater the Canadian oil industry, it's the world price of oil.

So let's keep an eye on that one as well. Lots at play here. That was our Encore Edition for this week. Hope you enjoyed it. Keep in mind, tomorrow, your turn, Will Mansbridge will be here filling in for Petereter mansbridge for your program with your turn and the random renter that's tomorrow