The Current - What this U.S. farmer would say to Trump about his trade war

Episode Date: March 12, 2025

Iowa farmer Joshua Manske says the trade war could be “really, really, really harmful” for him and the other farmers who helped U.S. President Donald Trump win his second term. Matt Galloway talks to Americans about the impact of tariffs and counter-tariffs on their businesses — and what they’d like to say to Trump. 

It's not just you. Canadian politics really did get a little dramatic this year. And even people who don't normally follow or trying to figure out what the heck is going on. I'm Catherine Cullen, host of The House, and I started a new Election Weekly with two friends and fellow political nerds. I'm Daniel Thibault, bringing you the Quebec point de vue. I'm Jason Markazoff, bringing the takes and stakes from the West. Together, we are House Party, an elections weekly for everyone. We answer one big burning question every Wednesday. Find us in the House's feed wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway and this is The Current Podcast. Does this tariff

war have your head spinning? You are not alone. There has been a lot happening. Just yesterday we heard this from the Premier of Ontario, Doug Ford. We will apply maximum pressure to maximize our leverage. That's why today we're moving forward with a 25% surcharge on electricity exports. That announcement was met with US President Donald Trump posting on social media. They will pay a financial price for this so

big that it will be read about in the history books. Then Trump followed up by announcing he would double the 25% tariffs on Canadian steel and aluminum imports. That is not the end of the story though. Little later on US secretary, US secretary of commerce, Howard Lutnick spoke with Premier Ford on the phone

and in the end, that threat of an energy surcharge from Ontario was lifted and so was the threat of additional tariffs by the United States. This whiplash of threats and counter threats has people on both sides of the border worried. And so this morning we will hear from Americans on the impact of Canada's counter tariffs and Donald Trump's trade war and what that's having on them.

Joshua Manske is a corn and soybean farmer in North Central Iowa. He manages farmland and sells farm real estate, also sits on the Iowa Farmers Union Board of Directors. Josh, good morning. Matt, thanks for having me. It's good to have you here.

You're just back from the National Farming Union Convention. What are people saying about this tariff spat? Yes, just three days of being with my favorite people in the entire world. Tariffs, of course, are on our mind. Our biggest allies, trading partners, of course, you guys there in Canada,

our biggest buyers of corn-based ethanol and our friends to the south buy a lot of our US corn. Trying to plan out the future with the tariffs on or the tariffs off, it makes life even more stressful than it needs to be. Is it already impacting your business? Well, with us, Matt, at Farmers, we have to deal with three different crops at any given time. Last year's crop, this year's crop, and the following year's crop.

So you're trying to manage all of that risk, and of course you're having to deal with Mother Nature, which is always a fun ordeal. And then when you throw in potential tariffs, not only just on your trading partners, but on your products that you need to grow your crop, like potash, for example, coming out of Canada. And that just adds another level of uncertainty to a farm economy here in the United States that's already kind of behind the eight ball. Potash is important as a fertilizer.

And I mean, one of the things that we know, again, things change, it seems like minute by minute, but the tariffs on potash, it would be 25% have been delayed until the 2nd of April. But spring is hurtling forward, so to your point, I mean, what would a tariff on potash mean for farmers? Well, just increased input costs on top of, input costs that are already very, very high.

Congress, Matt, passed the American Relief act at the end of 2024 to give direct payments to commodity growers to try to backfall the loss of income from the previous growing season. So that's where we're at already. Now all of a sudden these are kind of self-inflicted wounds in a way. Um, that puts us in a really, it puts us in a bind. Donald Trump promised a lot to farmers in the campaign trail. And I know that a lot of farmers voted for him.

He said, I love the farmer. But he also said earlier in the, just in the last couple of days to farmers specifically, get ready to start making a lot of agricultural product that will be sold inside the United States. Have fun. What do you make of that? That's a big sigh. agricultural product that will be sold inside the United States have fun. What do you make of that?

It's a big sigh If it's talking, you know, there's there's you know, domestic feed stacks that can be utilized or hopeful for sustainable aviation fuel, of course But that when you look at our markets 20% of our US corn crop is exported But Matt, when you look at our markets, 20% of our US corn crop is exported, close to half of our soybean crop is exported. And we kind of know how this played out last time. We were exporting around 2.3 billion bushels of soybeans annually.

And that number is 1.8 now, roughly. And we never, and most of that, of course, was our market share to China that we never regained. So these trade wars, they have long-term implications, especially when, you know, we've, we've tried to gain these markets for over 40 years and now it seems all of a sudden, you know, it takes how long to grow that market share and

then all of a sudden it's, it's gone. You say last time in 20, in 2018, when the president, when he was president before, it introduced tariffs. The Department of Agriculture estimates that what, $27 billion was lost in ag exports? Right. So then you had the, what was the called the market facilitation payments to backfall that. Okay. So that was a direct payment for essentially a self-inflicted wound. And, but here we are, how many years later? And we haven't regained that market share back. direct payment for essentially a self-inflicted wound. But here we are how many years later and we haven't regained that market share back.

So that's the kind of gain that you really shouldn't be playing with this. And of course you've got USCMCA that has, that the president did renegotiate before correct and there's mechanisms if there's trade disputes. And so it's, yeah, it just makes life more stressful for all of us out on the countryside. If you were able to pick up the phone and speak with the president, what would you say to him on behalf of farmers?

I would say, you know, Mr. President, obviously with, you know, farmers put you in office or was one of your big constituencies. Appreciate your sentiment and having our backs here. But the way these broad-based tariffs are being threatened, taken on, taken off, without going through the mechanisms of the previous, that your previous administration made, I think is, uh, short-sighted and, and really is it, it's going to have implications and could be really, really, really harmful. Josh, it's good to speak with you. Thank you very much.

I appreciate you having me on. All the best. Josh Omaneski is a corn and soybean farmer in North Central Iowa, also sits on the Iowa Farmers Union Board of Directors. Tom Gould is the CEO of Tom Gould customs consulting, chief strategy and compliance officer for Gaia dynamics, which uses AI to help clients

navigate the maze of customs rules. He is in Portland, Oregon this morning. Tom, hello to you. Hello. Good to meet you, Matt. It's good to have you here. What have the last, I mean, I said this, the story is changing kind of hour by hour in some ways.

What have the last couple of weeks been like for you since Donald Trump first started to threaten tariffs? It's been kind of crazy. It's been every day looking at the federal register and looking at notices to see what's new, what's changed. And it's hard to keep up. What are you hearing from your clients about what this means? I mean, again, there's changed, and it's hard to keep up. What are you hearing from your clients about what this means?

I mean, again, there's a real sense of uncertainty. Yeah, and you know, it's interesting. I think that they're all concerned about the tariffs, but I would say they're even more concerned about the uncertainty. It's very difficult for businesses to plan or make decisions when they don't know what their cost is gonna be.

And when we're talking about a 25% swing or even more in the cost of their products That makes them very anxious because really they just don't know are they gonna make a profit or they're not gonna make a profit Howard Lutnick the Commerce Secretary said last night that this isn't chaotic at all that the only people who are saying that it's chaos Are people who are trying to be silly in his words Interesting I hadn't heard that but Everybody that I talked to whether they're actually companies that produce products and import products or the service providers

that help them move the products and clear them through customs, they all agree that it is chaotic, is a word that I hear a lot. So your job is, as I said in the introduction, to try to help those clients figure out what the rules are as they're trying to move products around. Walk me through that now.

If this is a chaotic environment, how much work is it to figure out how to comply with the law when the law seems to change constantly? Well, it's a lot of work. And so you said walk you through it. And let's take for example you know the aluminum or steel tariffs that are going into play today. You know a month ago we really didn't know what was happening. We had no clue and actually we didn't know what products

were going to be hit with the tariffs until late yesterday afternoon. There are what are called derivative aluminum and steel products and those are products that are made with aluminum or steel as opposed to a product that's 100% aluminum or 100% steel. And so there's an old list. There's a new list and there's some products that were already known and other products that were just added to list. So, So, you know, it's a kind of a guessing game in many cases, and some companies literally didn't know that they were gonna pay 25% tariff, yesterday, they didn't know that they were gonna pay 25% tariff on product that they were importing today. How do you keep track of all of this?

I mean, I said you're using AI, is that helping you? It sounds like a lot of inputting into the computer. There is, it's a combination of all the above. Yes, the AI helps, and it does help us to sort through the massive amounts of data, but also it's a matter of talking to people and reading the articles that come out. I'm involved in a number of associations with customs brokers and freight forwarders,

and we've all become friends, more closer friends, I would say, because we talk to each other, because we share the nuances, the things like how the tariffs are reported, especially when you have a product that's subject to two, three, four, five tariffs. Is there a specific order that they need to be reported, and how do you do the calculations,

and how do you do the math? The Trump administration has said repeatedly that the goal of all of this, the goal of these tariffs is to bring manufacturing back to the United States. Is your sense in speaking with your clients that those kind of conversations, are they starting to happen? Yeah, they are. Back in 2018, I had clients that were importing products from China that said, you know what,

let's look and see if we can bring those into the US. Unfortunately, they weren't able to because the tariffs were applied to the inputs to the raw materials to the parts, the components, as well as the finished products. So it didn't make sense for them to do it. It made more sense for them to move their production to another country, a third country. third country. But today I'm actually seeing people seriously looking at, I have a client that I just talked to that was on a trip where he was looking at locations to set up a factory to start producing products here in the US. But remember, even companies that are producing products in the US, they're still often importing the inputs, whether it's the raw materials or the components, or they're, they may be bringing in the know-how, the inputs, whether it's the raw materials or the components, or they may be bringing in the know-how, the labor, how to set up the factory line, the workers, and so forth.

So it's more complicated than just putting a tariff in and telling people to set up their factories in the United States? Yeah. It depends on the industry. If you're talking about a simple industry like maybe textiles and apparel, we're talking three, four years to set up an assembly line to be able to teach the people how to, you know, use, operate the machines, deal with quality control issues, make sure that it's right. But if you're dealing with something more complicated, think of like an electronics product, you know, we're talking about, you know, eight, 10, 15 years

to get to the point where the production is as efficient as it is in a country like China or maybe even, you know, Mexico or Southeast Asia where they do it today. It takes a long time to pull all the pieces together to get to the point of being able to produce a product that is of the quality that the customers are demanding. I'll let you go, but are you wondering what excitement awaits you today?

Yeah, I'm actually- Excitement may not be the right word. Yeah, well, a lot of, yeah, I don't know what the right word is, but I'm in Portland talking to a group of customs brokers about the tariffs. So, you know, it's just a, it's a matter of, everybody just wants to know what's going on

And how to how to how to deal with the the uncertainty Tom good to speak with you. Thank you very much Thank you. Tom Gould is the CEO of Tom Gould customs consulting Are you ready to take control of your finances and build the life you've always dreamed of I'm Jessica Morehouse a, a Canadian money expert, accredited financial counselor, bestselling author, and host of More Money. Each week, I bring you inspiring interviews and practical advice to help you make smarter financial decisions. Tune into More Money on your favorite podcast platform and let's start your journey to financial empowerment today. Mark Bush is a professor at the School of Foreign Service at Georgetown University, also an expert on international trade. Mark, hello to you.

How are you? I'm well, what do you make of what you've heard from Joshua and Tom? I mean, chaos is the word that gets thrown around and maybe it's not strong enough of a word. Couldn't agree more. The trade policy uncertainty at the moment is crushing businesses and in particular farmers who, as you pointed

out in your earlier segment, have not recovered from the retaliatory strikes of our trade partners under Trump 1.0. How is this different than, as you say, Trump 1.0? Because we saw tariffs imposed during that administration as well. You know, it's a lot different. And it's a lot different on the outbound and on the inbound. And by that I mean that this is like a massive tariff undertaking. And even though we debate what the legal basis of each separate tariff might be, the reality is that these tariffs are morphing into one another and being used as stacked protectionism.

I never thought I would see this day come in my career. And as your earlier guest pointed out, this is entirely unprecedented. But it's also quite novel in the sense that the retaliatory strikes are different from Trump 1.0. The Canadians, the Mexicans, and the Chinese for that matter have offered very creative reprisals, including non-tariff measures. The Chinese are doing antitrust. Mexico has vowed carousel retaliation, which will drive even more uncertainty into the equation. And the big one, as of this morning, is the EU's response, $28 billion in retaliatory strikes. Looks like they're

going to start in a pretty classic way, going after bourbon, motorcycles, et cetera, but watch that one ramp up real fast. Well, and Canada's just announced almost $30 billion in retaliatory tariffs on the US in response to the steel and aluminum tariffs. The market has been responding to this over the last couple of days, certainly. Donald Trump was asked about the stock market plunging yesterday when he was at an event with Elon Musk. Have a listen.

Markets are going to go up and they're going to go down. But you know what? We have to rebuild our country. Our country has been stripped of its jobs, of its factories, and I'm tired of seeing where they build apartments, cheap apartments in an old broken down factory. But you have factories all over the place that are empty from many decades ago, and we're going to change it around. And it's all taxing policy. He says the tariffs will bring factories back to the United States. Can you just briefly explain what we might learn about this story through the example of Harley Davidson? In Trump 1.0 he really gravitated toward the story of Harley Davidson and it's a story of tariff-skipping foreign direct investment and the logic is that India

imposed a 100% tariff on large engine motorcycles produced by Harley and Indian from the United States. And they went into India to bypass the tariff. And Trump likes that logic. He believes in a kind of field of dreams effect. Build it with tariffs and they will come. The problem is that he largely got his story about Harley wrong. Harley definitely did go into India, built certain motorcycles in India, but eventually migrated to Thailand. And that's a competing story. That's the story of export

platform foreign direct investment. Thailand has all these free trade deals with China, with the EU, and Harley went there to get in on those markets at zero tariff and completely shuttered its efforts in India as a result. That's the part of the story Trump doesn't seem to have capitalized. And the ultimate irony is that when the European Union in the first Trump administration retaliated for Trump's steel and aluminum tariffs,

Harley, to get around that, shipped its motorcycles from Thailand to the EU. So there's your ultimate closure of the circle and that's really what Trump should have learned from that moment. So are these factories going to come back to the United States then when he puts these tariffs in place? Look, there's no doubt that you've got a lot of businesses that are fretting over this and wondering what will it take to get around this uncertainty. And we just heard that from Tom that some businesses are already starting to think about that.

Exactly. And you're going to get a lot of this questioning going on. But eventually as we see how this one plays out, they're going to be making the following calculation. Can I ride out four years? Can I really reshore my entire supply chain? And as your prior guest pointed out, there's no way a semiconductor firm can reshore an entire supply chain and as your prior guest pointed out there's no way a semiconductor firm can reshore an entire supply chain. You've got inputs moving 24,000 miles around the world

before final assembly. That doesn't get reshored by virtue of a 25% tariff. Just in the last couple of minutes that we have, you're a dual citizen of Canada and the United States? I am. You remember the free trade election then of the 1980s and the fight over, what people thought that would mean for our, you know, sovereignty, but also for international trade. What is it like watching this play out all over again? It is the ultimate irony. I'll tell you, I graduated from Queen's University in 1988.

All of my courses were about the bilateral that went into effect in 1989, the precursor to NAFTA. And at the time, we were told this is going to shield Canada from American unilateralism. And boy, that really never happened. And moreover, on his way out the door for the Trudeau administration to go unilateral against China on electric vehicles, if that's what it takes to pander to the US, then the trade agreement was riddled with flaws and we had the wrong attitude about it all those years ago.

Do you have a word of advice for whoever is going to lead to this country? We have an election that is looming. What would you say to them about how to handle what we see right now? Stop flying down to DC and asking the Trump administration what it wants, come down with a proposal

and offer it on the table as an ex ante solution that's more or less a universal settlement and make it very clear, USMCA may not be as valuable to Canada as Trump seems to think it is. Mark, it's great to talk to you. Thank you very much. Thank you. Mark Bush is a professor

at the School of Foreign Service at Georgetown University. He's also an expert on international trade and a dual citizen. For more CBC podcasts, go to cbc.ca slash podcasts.