The Current - Trump’s ‘Liberation Day’ is here. What should Canadians expect?

Episode Date: April 2, 2025

U.S. President Donald Trump is expected to unveil the full scope of his tariffs plan Wednesday afternoon, a trade policy he says will liberate his country from reliance on foreign goods. Guest host Mark Kelley discusses the economic and political fallout for Canada with former federal minister Lisa Raitt, and Carlo Dade, director of trade and trade infrastructure for the Canada West Foundation.

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This is a CBC Podcast. Hi, it's Mark Kelly here. You might know me from my regular gig as co-host of the CBC's The Fifth Estate. You'll be hearing more from me when I fill in for Matt as he crosses the country talking to Canadians about the election. I hope you tune in, and please enjoy the current podcast. Later this afternoon, Donald Trump is expected to announce the full scope of his tariff plans. We still don't know exactly what he'll announce.

Will this be a flat tariff of 20% on all goods coming into the US or will some countries get a lower rate? It's a head spinning enough trying to keep track of what tariffs the Trump administration has already imposed on Canadian goods But hey, let me take a crack at it. We've got 25% tariffs on steel and aluminum 10% on energy then there's a 25% tariff on cars and light trucks assembled outside the US. So will these tariffs disappear now or will the new tariffs be stacked on top of the existing tariffs? You're forgiven if you want to scream at the radio or your phone in a fit of tariff fatigue or frustration. Whatever Donald Trump announces this afternoon, the economic damage and political fallout of the US-Canada trade war is likely to deepen.

To get an idea of what Canadians can expect and what can be done to mitigate the damage, we've reached Lisa Wrait. She's managing director and vice chair of global investment banking at CIBC Capital Markets. She's also a former minister in Stephen Harper's Conservative government. Lisa, thanks for being with us this morning. Thanks for having me, Mark. Give us your view.

What are you bracing for? I mean, the people around you, what are you bracing for today from the Rose Garden at the Wright House? Well, it's funny, you should say that you're pulling your hair out trying to figure out what all of the tariffs mean and how they all work together because I think that's the key. It's the uncertainty that has most of the conversation space, I think, right now. We don't quite know what we're going to be facing. And it's hard to come up with solutions if you don't know what the problem is. So we're kind of like boxing in the dark

in the moment. In the meantime, business will continue. We're going to continue to have commerce. We're going to continue to have commerce. We're going to continue to have trade. It's just people are now thinking about things of the nature of, well, what are we going to do if we can no longer export into the United States and be competitive? Are we going to set up shop in the United States? Are we just going to have to lay off a ton of people here in Canada? And once the, I guess once the parameters are in play, people will take the decisions based upon the plans they're making. It's not like they've been sitting idle for the last month. They've been trying to figure out how they're going to do better or how they're going to

survive. You know, it's interesting Lisa, as I'm reading what Canada is bracing for, there's no indication coming from the White House what, what, you know, there's no inside line to the Canadian government. I mean, how odd is that? You know, we talk about a relationship with the US and how it's frayed, but they've given no heads up to our government what to expect. Do you find that odd? I do, but I guess what we have to compare it against is how is this administration treating

other countries? What are they doing vis-à-vis Mexico? What are they doing vis-à-vis the UK with respect to France? And if we're not getting as equal treatment there, then we do have something to be very concerned about, and we have to start thinking of ways in which to ensure that we're keeping these lines of communication open. On Monday, Trump hinted that he may not be as tough

as he said in the past saying, and these are his words, we're going to be very nice. Relatively speaking, we're going to be very nice. So what is the very nice, nicest, best-case scenario this afternoon for Canada? I got to tell you, when he says something like that, my instinct is to think, oh, it's going to be really bad. Because he's classifying it as really nice. He's sending out his narrative to say, oh, you think this is bad, this could be much, much worse. So be happy the fact that I've granted this kind of dispensation to be nicer to you. Because if you say anything negative about what I'm about to give you, then, you know, I have other things that could make it awfully worse.

And that's kind of what I'm reading from it, not necessarily anything else. And quite frankly, it's because we've been whipsawed back and forth by this administration since they took over basically in January, trying to figure out where they were coming from. So we will, I guess, all will be revealed this afternoon. And then from there, whether or not it stays in place, or if there's another delay, there's certainly going to have to be follow up as to what this means. Whether or not it's an announcement with a lot of meat behind it that we can take a look at documents and figure out exactly what is being proposed or what is being put in place. So that's, it's a wait and see until this afternoon. And then tomorrow, how will the markets react?

How do people feel about their investments, about their investments in the United States and their retirement funds? And how much stock do you think Trump is putting in the stock market and the reaction of the markets? So, you know, that's a really great question. And it's the one that people want to say, look, he really cares about the stock market.

And if he sees it reacting negatively, he's going to take his foot off the accelerator. I don't know if that's the case. You know, there's a lot of media in the United States. And one of the more friendlier media channels was preparing people yesterday saying, look, your 401k is going to take a hit and just know that this is for the greater good and we want to prepare you

for it. But you know, hold the faith, this is something we need to do for America to make them, to make us more, more productive and to be treated fairly on a world stage. I mean, that's the kind of, I I guess narrative and discussion that's happening in the United States and in the media channels that a lot of Mr. Trump's followers listen to. Well, Lisa, I don't have to tell you and of course our listeners we're in the middle of an election campaign where the US-Canada trade war has become a central issue and not the key issue here. Now take a listen to how Liberal leader Mark Carney responded yesterday to a question about today's tariffs.

As I also mentioned to the president, I was very clear, we will respond to additional measures. So we will put in place retaliatory measures if there are additional measures put against Canada tomorrow. What do you think of that, Lisa? Because there are other countries right now that I'm told have been doing, you know, the 11th hour negotiations with Trump to try to stave off these tariffs. What do you think at this stage? I know Canadians are all talking about let's get elbows up, but is this a time to retaliate or negotiate?

I think there has to be retaliatory measures, but I think we have to be smart about it in Canada. We have to pick the things that aren't going to be hurting us disproportionately. Don't put tariffs, don't put retaliatory tariffs on things that we don't make in Canada, quite frankly, that we don't have the ability to purchase, where we're actually sticking Canadian businesses with the extra cost because that's not going to be hurting anybody. I think it's fine to have that kind of message sent in. I think the message is being sent to the Canadian electorate as much as it's being sent in to the administration. And I don't think anyone necessarily would have their backup by saying, well, we're going to have a plan for retaliation. It depends upon what it's

going to be. And the United States is, I would assume, very assured in themselves that they have a lot more ability to withstand a trade war than Canada does. And the reason for that is just sheer size. Yeah, absolutely. And the Canadian government has put up billboards in Republican states that say tariffs are a tax on hardworking Americans. Do you get any sense, and I know there's been a lot of appeal to the Americans by saying let's go beyond the American politicians, namely the American president, and try to appeal to Americans themselves? Do you see any, that campaign getting any traction?

I think it's performative, and maybe it's as much for, as I said, a Canadian audience as it is for the United States. I'm not going to criticize any government that's trying to put anything in place right now to forestall these tariffs coming on because they are absolutely destructive to our economy. So they're going to try and what's a couple of billboards. The danger, if I could put that out is I believe that the, the sentiment in a lot of the States that already vote for Mr. Trump is, is hardening.

Um, they do buy in, they do approve of him putting tariffs at the border. They do believe the concept that America has actually been treated unfairly in the trade world and that their jobs were exported around the world and that they want to bring them back home again. And as a result, that's a really tough thing to break through. I mean, they're going to listen to their president who still enjoys a pretty good approval rating rather than a couple of billboard signs on the side of the road that could be placed there not only by the Canadian government, but by the Democratic Party who is having a gripe with the Republicans.

Yeah, as we're seeing right now, and you mentioned that because there's some senators that are getting together led by the Democratic Senator for Virginia, Tim Kaine, who's challenging Donald Trump's use of tariffs on Canada in the Senate. He's calling this is a made up emergency. This whole idea that there's a fental crisis and Canada is to blame is a made up emergency. They're trying to solicit some support from Republican senators as well. Do you see that going anywhere? I don't know if I see it going anywhere, but I certainly welcome it.

I think that is one of the big gaping silences that we've been experiencing here in Canada for the last month. And I'm very glad when I saw, they were significant Democratic senators who came out to do a press conference. It was Chuck Schumer, it was Amy Kolbach. It was a really good set of people that I think can put forth the message in a clear way. And as a result, I'm glad to see it finally happening.

And I know in Canada, we've been asked to provide support in terms of written stories, written information, to enright any center that we possibly can in terms of explaining the importance of the relationship between Canada and the United States. And I think that's a positive thing to do as well. Lisa, before I let you go, do you see things as getting worse before they get better?

Of course. Well, look, there's a couple of good things that we can look forward to. I'm just looking to get out of the turbulence and the turbulence right now is the uncertainty of not knowing what the tariffs are and the uncertainty of not knowing who the government is going to be that's going to be negotiating, you know, April 28. Once we get those two pieces in place, I think it's time for whoever's in charge to make sure that they have a really strong plan and that Canadians do really understand what are possible remedies to this and how life is going to look like going forward. So the pieces will fall into place and then it's up to us to respond accordingly and to get our act together. And if we are so beholden to the United States that we're placed in this kind of threat or

panic, then that is a really good indication that it's time to remind ourselves how do we grow our economy in Canada and what's the best thing for us to do. Peter T. to do. Lisa, good to talk to you. I appreciate your time. Thank you. Oh, my pleasure. Thank you so much. Lisa Rae is the Managing Director and Vice Chair of Global Investment Banking at CIBC Capital Markets. I'm Sarah Trelevin and for over a year I've been working on one of the most complex stories I've ever covered. There was somebody out there who was faking pregnancies. I started like warning everybody. Every doula that I know. It was fake.

No pregnancy. And the deeper I dig, the more questions I unearth. How long has she been doing this? What does she have to gain from this? From CBC and the BBC World Service, The Con, Caitlin's Baby. It's a long story, settle in. Available now. Carlo Dade is the director of international policy at the School of Public Policy at the

University of Calgary. We've reached him at an airport. Carlo, good morning. Morning, Mark. You've been listening to Lisa. Let me start with you on this idea of retaliate or negotiate. What's your view? You have to do both. Obviously, we're dealing with a level of unpredictability and uncertainty we've never dealt with before. This really is new territory for us.

And I think it's really important to understand that what's worked in the past and our past relationship with the US won't guide us necessarily going forward. The trick is to help Americans realize the damage that the tariffs are inflicting on the American people without turning the attention to us. So we get blamed for contributing to it or Fox News or One America or someone can spin it that now we're part of the problem.

So, I mean, how, let's start with what you're expecting. We'll start there and then we'll branch out from there. What are you expecting from Donald Trump this afternoon? Well, you know, I've been following the development of terror policy amongst the America First Movement for five years. Matt and I have been talking about this, et cetera, and I don't know. I love your honesty. Thank you. Thank you for the transparency. I'm probably more confused than the average person

because I've been following the various machinations and contributions of the development of the policy. So there are a few things I'm looking for. What authority is the president using? The president has great authority, but he doesn't have the authority to wake up in the morning and do anything he wants. So, which authority in the government is he using? Are the tariffs, say, a set percent?

Is it 17 percent, or are they nice round numbers? That'll tell us if they've done some work in actually calculating the tariffs or if they've just kind of made it up as they've gone along. What level will so there are a bunch of things that normally you'd expect to be done well in advance before you walk into the Rose Garden. I kind of expect them to walk in scribbling on paper and handing papers to the president and arguing amongst themselves Yeah, that's not that's not very bad not very reassuring

But Carla do you see it an element of retribution in this in this policy from Trump? Sure in terms of the mix of things that are coming in Retribution certainly does figure into this what percentage is the retribution is a different question. I think it lurks in the background. The Americans feel victimized, and we went through this in the 1970s, 1930s. They think the world's ganging up on them. And so this does have an element of retribution to it. It's not the dominant element, certainly, but it's there lurking in the background.

What kind of job losses are we looking at? The potential for job losses? I know we're heading into uncertainty. Nobody has the answer to that, but what should we be bracing for? I don't know that we can say. There's that much uncertainty. Will the terrorists be stacked on the preexisting terrorists? Will we get exceptions in certain sectors?

Will there be a set duration? So yeah, you can't model something with so many variables out of line. The Ontario Premier Doug Ford has been quite outspoken about the terrorists and the impact on Ontario, in particular, and Canada in general. He's calling this termination day because of the potential for so many layoffs in this country. He was on NBC's Meet the Press yesterday. Take a listen to what he had to say.

The only thing acceptable is zero tariffs. Americans need Canadians. We have such an incredible relationship together. I've talked to endless CEOs of businesses. I've yet to find one CEO that agrees with this. It's just going to hurt their economy. So what about the CEOs, Carlo? Do you think that they have a voice or any sway whatsoever with President Trump?

Sure, they do. But step back and look at the larger picture in the US. The Steve Bannon strategy of flooding the field. How many executive orders have we had? How many different sectors of the U.S. economy? How many different community services? How many different expenditures that the U.S. government provides to communities have been hit?

It's been flood the field at muzzle velocity. No one has, I think, the ability to really focus on mounting a resistance even to specific issues. Normally, executive order, people come together, communities formed, you have a reaction, but everyone is just overwhelmed, diving for cover, reeling from the rate, the rapidity, the intensity of what the Trump administration has done across the breadth, not just of the US economy, but of society, of institutions. Yeah, I know you're part of an expert group on Canada-US relations that put out a report,

Broken Trust Managing an Unreliable Ally. And I guess that is now the US has become such an unreliable ally, and I guess that is now the US has become such an unreliable ally. And one of the points that your group wanted to make was that Canada should not rush into trade talks. Why have you taken that position? Sure. This is something, one of the painful lessons we've learned early on. When Trump first said fentanyl is an issue, you saw premiers and the federal government rush to offer solutions, throwing everything we had on the table to see what would tickle Trump's fancy.

But the Americans never gave us specific demands, and they never gave us assurances. So sure, we'll help you on fentanyl. Tell us what more besides the 101 things we're already doing, what specifically do you want? But rather than getting that, we rush to put demands or offers on the table and we've gotten nothing for it. So that was a painful lesson that we learned. Hopefully we've learned once and for all with dealing with this administration and the Americans going forward. Prime Minister Mark Carney spoke with the Mexican President, Claudia Scheinbaum yesterday, and he posted on X after that call that, quote, in a shifting global economy,

strong and reliable partners matter. Canada and Mexico are focused on deepening our trade relations and building stronger economies together, end quote. So how much do we need now to diversify our economy beyond the US? That's a good point. Let's remember that we threw Mexico under the bus for the second time in as many trade negotiations.

They saved us during the first NAFTA renegotiation by sharing information on what they were doing with the Americans. They saved us on steel and aluminum tariffs when Jesusiade brought the proposal to Christia Friedland and offered to have her sign on. And now we need them again. So lesson number one for us is let's be a bit more careful with our allies. But look, we've been trying to diversify trade since the first time the Americans did this to us. The most recent time, 1971, Royal Commission, we

were going to diversify trade. In the interim 50 years, trade with the rest of the world has increased, but trade with the US has increased more. It's difficult. You live next to the fattest, easiest, richest market on the planet. Do you really want to go to Honduras?

Sorry to pick on Honduras, but do you really want to go to Honduras to work three times as hard for half the money and four times the risk, even with the current U.S.? Well, Carlo, I know, speaking of the U.S., you're on your way to the U.S. and that whatever your meeting's down there, I'm sure they were bound to be interesting, but thanks so much for making time to talk to us on your way out the door. My pleasure.

Carlo Dade is the Director of International Policy at the School of Public Policy at the University of Calgary.