The Current - Trump puts 3-day pause on 50% Canadian tariffs

Episode Date: August 19, 2026

U.S. President Donald Trump announced a three day pause of tariffs on Canadian goods late Tuesday night. We speak with industry leaders in lumber and auto -- two major sticking points in the ongoing trade negotiations. Then, we hear from former Minister Richard Goodale, who sits on the federal government's Advisory Committee on Canada-- U.S. Economic Relations.

It wasn't too long ago that much of Canada's political class was united in their embrace of immigration to help grow the population and with it the economy. Now, many of those same people are singing a different tune, arguing that Canada's immigration consensus is broken. I'm Jamie Poisson, host of the Daily News podcast Frontburner, where we recently took a closer look at the political 180 on immigration. Check it out on the front burner feed wherever you get your podcast. This is a CBC podcast. I'm Lindsay Duncombe, and this is the current podcast. Canada has dodged the new U.S. tariffs that were set to begin at midnight, at least for three days.

President Donald Trump had threatened to hit Canada with 50% tariffs on a slew of Canadian products, a move that would affect some $30 billion of goods. After intense down-to-the-wire negotiations, last night President Trump announced he would pause the news, tariffs because there is a deal. He hinted that it could include reviving the Keystone XL Pipeline Project. Senior American officials say Canada has expressed a commitment to remove what they view as discriminations relating to alcohol, dairy, and motor vehicles. There is a different take from Ottawa, though. Prime Minister Mark Courtney's statement simply said substantial progress was being made and the work would continue. We're going to hear three. We're going to hear three.

perspectives on what this news means, starting with Canada's auto sector, which has thousands of jobs at stake. Brian Kingston is the president and CEO of the Canadian Vehicle Manufacturers Association. He joins me from Ottawa. Brian, good morning. Good morning. What's your reaction to where things are this morning with this news of a three-day pause? Well, we are encouraged that Canada and the United States continue to talk, as the Prime Minister noted, in his statement. substantial progress has been made. The key here is that we are at the table and we continue to have conversations. The auto industry is under extreme pressure right now. We've witnessed well over

$35 billion in tariff costs incurred. Exports are down. Production is down across North America. The situation cannot persist. We have to get to an agreement. So I'm encouraged that we're continuing to talk that we avoided new tariffs, and I remain optimistic that there is a deal to be had here. What do you know about this commitment Canada may have made with respect to motor vehicles? We're still awaiting details on the specifics. Talks continue. What we're trying to do is get to a point that keeps the Canadian automotive industry competitive. We're in this very odd situation right now where it is more cost-effective for manufacturers to build cars in Japan, Korea, Europe, and export them into the United States than to actually build a

vehicle in North America. That simply doesn't make sense. We've created this highly integrated automotive industry with the United States over the course of decades. And that's what's enabled us to grow this industry. And it's why autos are our second largest export. So the current situation cannot persist. There is an agreement to be had. The U.S. looks at Canada as its largest export destination for vehicles, bigger than Germany, Mexico and China combined. So there's an agreement here to be had. We have to keep talking. Yesterday and over the weekend, there were all kinds of leaks coming out about specifics here. And understanding that you don't necessarily have the latest on what the proposals are, but we understand that the U.S. proposed to lower auto tariffs from

25 to 15% and that Canada said that was not acceptable. What tariff level can the industry absorb without more job losses and plant closures? Well, our North Star here has to be to return to duty-free North American automotive trade. Do you think that's possible, though? That doesn't sound like what is coming out of the White House. It may not be possible in the interim, but that has to be the objective over the medium to long term. The question now is can we get to some sort of agreement that allows the industry to continue to succeed in Canada? The auto industry is relatively low margins. So even low levels of tariffs can be extremely costly. If you look at the tariff bill that Canadian manufacturers have paid since this started, we're talking about over $5 billion. That is not

sustainable. And it makes it so difficult for companies to plan for the future. How do you commit billions of to an auto plan if you don't know what your tariff cost will be. So we have to get to a place where tariffs are completely eliminated or ultra low. I think we're getting close. But again, this additional three days is going to be critical. That threat, though, of tariffs, the additional tariffs is presumably still looming until a deal is officially reached. Just how big an impact would that have if it were to come into place? If we have additional tariffs, the big challenge there is that it could potentially kick off a new cycle of retaliation.

And then the question is, how do you get back to the table? We've been going through these discussions now for almost two years. We cannot allow another cycle of retaliation. Obviously, that will have serious negative consequences for other sectors of the Canadian economy that are targeted. But it also means the auto industry will continue to incur these costs. So it's really not. an option. We have to secure relief and then focus our efforts on the upcoming discussions around the Kuzmo Agreement where we'll have additional opportunities to improve the terms of trade. Thank you so much for joining us this morning. Thank you. Brian Kingston is the president and CEO of the Canadian Vehicle Manufacturers Association. Canada's lumber and wood product industries have been another sticking point in Canada-U.S. trade. It is is a top priority, particularly in B.C. Derek Niebuhr is the president and CEO of the Forest Products Association of Canada and the Canadian Wood Council. He's in our Ottawa studio this morning. Derek, good morning. Hi, Lindsay. Thanks for having me. How are you feeling about where we are this morning?

Well, not many of us slept last night who were involved in these files across the industry. And, you know, I think it's not perfection, but it's definitely. progress. And I think Brian summed it up pretty nicely. I think the fact that folks are still at the table that we have an interim arrangement and we'll learn more about what that potential deal might look like, hopefully in the hours or days ahead. When you were staying up late, looking for the latest, were you looking for the specific word, forestry or lumber? How does it feel to not see your industry being mentioned in these early statements? Well, you know, we have been. I think the Prime Minister, I think, premiers in Quebec and BC and Ontario have been very clear about wanting to see solutions for forestry before American booze goes back on the shelves. You know, I think for us, the relief on 338, you know, that's over $5 billion, about $5 billion of our products in veneer and fiberboard and paperboard.

In addition to that, you know, we've got kitchen cabinets and wood upholstered furniture caught up in Section 232s. That's another billion dollars worth of Canadian product. and then another 10% of a 232 on top of our existing 35% on lumber. So it's been a year of hits starting back in August of 2025 and the relief for us to this, what I would call, stroke of the pen risk, you know, that's section 338, that's section 232, those pieces that are just so unpredictable, you know, our hope is that the federal government can make those risks go away.

One of the concerns particularly from BC Premier David Eby was that there's so much focus on industries such as auto and dairy. And there have been such longstanding trade issues, particularly on softwood lumber, that the forestry industry, as huge as it is, could get overlooked in this process. Is that a concern you share? It's not. You know, I think I welcome Premier Eby's support of our sector in this regard and his commitment. to ensuring that, you know, if he's going to make a move to put booze on the shelves, that Canadian forestry industry needs need to be addressed.

I would say where, you know, where the forest sector is different than the other sectors, and listen, all sectors are really important. But our sector employs more Canadians than steel, aluminum, and auto combined. We're just under 200,000 full-time employees in hundreds of communities across the country. So, you know, this is jobs 100, 200, 300,000. jobs at a time in communities of four or five, 10,000 people. So the connection and the importance

of the success of our industry to those smaller and northern and rural communities is so critical. And I know the negotiators and the prime minister and Minister LeBlanc know that. We were hearing from the auto industry that their hope here is a return to some sort of tariff-free trading, however realistic that may or may not be. What is your hope? Three days from now, What is the best possible outcome you think the forestry industry could get? Yeah, you know, I think as I mentioned, that the Section 338 risk for us is significant. You know, so seeing that go away. Those are the new tariffs.

That's correct. Sorry, yeah, the most recent tariffs. Then we have the Section 232 tariffs that came in back in October of 2025, which, remember, are the National Security Risk tariffs. So that because, you know, the U.S. deem that Canadian lumber kitchen cabinets and wood upholstered furniture posed a security risk to the United States. That's bonkers. And that 232 tariff risk we would like to see go away.

And we would like to get back to the table on softwood. Listen, we saw, you know, earlier this week, we saw the U.S. housing start numbers, which are a big indicator of health for the wood industry across North America. They're down 13% year over a year in July. high energy costs, high construction costs, affordability concerns. The economy's fundamentals in the United States are not great right now, and that's what we should be focusing on here.

And the U.S. Chamber of Commerce said yesterday that these tariffs are doing nothing to help the underlying economic concerns in the United States. Before we let you go, you mentioned a lot of those concerns in the United States are also pressures in Canada too. we know that mills in BC have closed. There are thousands of people out of work. How much more pressure can the lumber industry weather right now? It's tough, but we're a resilient bunch.

So as far as today goes, I think we're taking the interim win here in terms of the delay on the 338 as we wait to see what else happens. The other thing I'll say, though, is we've seen almost about as many mail closures in the United States as well. And that's one piece that's not been talked about a lot. and similar to Brian's comments on Asian cars getting into the U.S. cheaper. We're seeing European wood get into the U.S. cheaper. So we've got to get back to this building, the North American pie and strengthening the North American economy.

There are win-wins here, and hopefully the conversations in the days ahead will get us closer to where we used to be. Thank you so much for joining us, Derek. Thanks, Lindsay. Derek Nyber is the president and CEO of the Forest Products Association of Canada and the Canadian Wood Council. It wasn't too long ago that much of Canada's political class was united in their embrace of immigration

to help grow the population and with it the economy. Now, many of those same people are singing a different tune, arguing that Canada's immigration consensus is broken. I'm Jamie Poisson, host of the Daily News podcast Frontburner, where we recently took a closer look at the political 180 on immigration. Check it out. on the front burner feed wherever you get your podcasts. Former Liberal Cabinet Minister and diplomat, Ralph Goodale,

has been watching these trade negotiations closely. He is on the Federal Government's Advisory Committee on Canada-U.S. Economic Relations. Ralph Goodale joins me from Regina. Good morning. Good morning, Lindsay. I want to start by getting you to parse out the different messages here that we're hearing from Ottawa and Washington.

Trump says there's a deal, but that's not exactly what we're hearing. hearing from Carney. What do you think of the position Canada is in right now? Well, Trump's threat of those new 50% tariffs is still hanging in the air, but it is now specifically postponed for three days. That's good. As your two previous guests have mentioned, obviously some progress has been made. The $28 billion in Canadian exports that had been at risk by that threat, have avoided those new tariffs at least for now. But the situation is still, as the Prime Minister said earlier this week, delicate and intense. It would appear that

the work to be done in the next two or three days is the trade lawyers on both sides, writing up and agreed upon text, and everyone will be anxious to see what it actually says. And in that process of committing what each side has agreed to a formal written legal text, there may be bumps or twists or turns that need to be ironed out. So I think the prime minister is essentially saying it's not over until it's over, and there still is important work to do. But you do think we're at the detail stage, as opposed to a large gulf on any one of these. issues? Yes, that would certainly be the indication from what President Trump said last night.

The Prime Minister is taking a more cautious line, and I think that is probably prudent from Canada's point of view. We want to avoid any new tariffs. We want to reduce the level of tariffs that presently exists since last year. we want to get that path forward on Kuzma so that we can preserve Kuzma for the long term, which in effect gives Canada the best deal in the world in relation to the United States. I think Canadians will be looking very carefully at the text to ensure that we've made progress on all three of those objectives. Do you have any sense in your role on the advisory committee, how looped in the premiers are? to where we are now and whether or not the provinces are on board,

because ultimately when it comes to decisions around putting booze back on shelves, that's up to the premiers. Yes, indeed, it's provincial jurisdiction. The prime minister has always been very careful to be respectful of provincial jurisdiction. As the advisory committee has met over the course of the last several weeks and months, either in person or virtually. Most recently, it's been online meetings because they've been called with very little notice and in rapid succession. But every time the advisory committee met, it was clear that Minister LeBlanc and a chief negotiator, Charette and Ambassador Wiseman

had just come to the advisory group, having just briefed the premiers before that. So it would seem to me that the federal government has kept the premiers very closely in the loop to make sure that this is a team Canada effort and there are no nasty surprises or anyone feeling left out or missed or taken for granted. Oil seems to be something that has captured the U.S. President's attention here. Trump posted on Truth Social that the great Keystone XL pipeline may be awoken from the grave, and there is an image of him hoisting a chunk of pipeline from the ground. This is a longstanding pipeline project that would potentially carry Alberta oil to U.S. refineries.

What do you know about how Keystone specifically and energy more generally, generally is factoring into where we are now? Well, energy is obviously a critical strategic export commodity from Canada to the United States. We are their largest foreign supplier of energy. And as much as Mr. Trump says he doesn't need anything Canada has, in fact, energy is a very strategic component of our relationship. And if you put the resources, the energy resources, whether that's conventional or new renewables or nuclear, add that whole collection together, you put the energy resources of Canada together with the United States and under the umbrella of Kuzma. and you have the most energy secure and energy affordable situation here in North America anywhere in the world.

So there is a huge strategic value to Canada and to the United States from making smart use of our energy resources. and it really makes the point that Canada is in many fields. Aluminum is another. Potash is another. Critical minerals is another. We are a vital supplier for the United States that, quite frankly, they cannot do without. Kuzma talks, as you mentioned, are still to come. What are you going to be looking for in terms of this deal and what it could mean for the ongoing negotiations?

Kuzma is in that phase now of annual reviews going forward. The Kuzma umbrella gives Canada great access to the United States market. It is broadly supported by Americans and by the Congress. The agricultural sector in particular is a strong supporter of Kuzma. We want to have a path forward that we can continue the discussions about how to preserve and strengthen Kuzma for the long-term. The other thing that we absolutely want and must do is continue to double down or triple down on building out the Canadian economy for the future so we will become less reliant on one single market in North America. We have to leave it there. Thank you for joining us.

Thank you, Lindsay. Ralph Godell sits on the Federal Government's Advisory Committee on Canada-U.S. Economic Relations. For more CBC podcasts, go to CBC. c.ca slash podcasts.