The Decibel - Winners and losers after a year of Trump tariffs

Episode Date: February 26, 2026

On Tuesday night, U.S. President Donald Trump touted his tariff regime, after a Supreme Court decision that severely limited his ability to impose tariffs. Now countries trading with the U.S. are left with even more uncertainty about what will come next. Jason Kirby is a staff reporter for The Globe’s Report on Business. He explains what the court ruling means for Canada, what other tariffs could be coming our way soon and who have been the winners and losers in the trade war over the last year. Questions? Comments? Ideas? Email us at [e-mail] Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Mr. Speaker, the President of the United States. On Tuesday night, U.S. President Donald Trump delivered a marathon state of the union address. And he took some time to complain about a recent Supreme Court ruling and issue a veiled threat to the U.S.'s trading partners. And then just four days ago, an unfortunate ruling from the United States Supreme Court. It just came down, it came down. Very unfortunate ruling.

But the good news is that almost all countries and corporations want to keep the deal that they already made, right, Scott, knowing that the legal power that I as president have to make a new deal could be far worse for them, and therefore they will continue to work along the same successful path that we had negotiated before the Supreme Court's unfortunate involvement. That quote-unquote unfortunate involvement was Friday's ruling that decided that many of Trump's tariffs were illegally imposed. But the ruling didn't return things to normal. It has just created more instability and some winners and losers when it comes to the new global trading order Trump is trying to create. Jason Kirby covers economics for the globe's report on business. He's been tracking all of the tariff changes and what they mean for Canada. Canada. And today he's on the show to break it all down. I'm Cheryl Sutherland, and this is the decibel from the Globe and Mail. Hi, Jason. Nice to see you again. Hi. Thanks for having me on.

So Friday last week, the U.S. Supreme Court struck down U.S. President Donald Trump's wide-ranging global tariffs known as the Aiepa tariffs, which is the acronym for the legislation that Trump has used to impose them, the International Emergency Economic Powers Act. You know, big, big mouthful there. So this decision was obviously. a blow to the Trump administration. But Jason, what does this really mean for Canada and the Canadian companies affected by tariffs? It basically means more chaos, an uncertainty. It does feel like we were slowly kind of getting into a bit of a routine where things had stabilized. We knew what the tariff rates would be. You know, there was still, things would set them off and he'd still like

launch, you know, tirades against specific sectors or make broad threats. But things had mostly stabilize and companies and exporters to the U.S. had figured out how they could structure their businesses and get the certification to benefit from USMCA or QSMA, the trade deal we have with Canada and Mexico. And so all of that had kind of started to stabilize. This blows all of that up. So on the downside of that is the uncertainty that gets created. The upside is that we still have that protection being part of that trade deal for the vast majority of exports that, do go from Canada into the U.S. So we are shielded by that still, fortunately, but we really have no idea of what comes next.

Yeah, so as you mentioned, a lot of our goods are protected under the trade deal we have with Mexico and the U.S. Can you give me a sense of which Canadian exports are affected, though? Oh, yes. There were already these Section 232 tariffs. They're called sector tariffs, and they're under an authority that the president has around national security. so we could declare a kind of a national security crisis in these specific sectors. They would launch an investigation and then bring in Section 232 tariffs. These have existed before and they continue to exist.

So you've got things like steel and aluminum and copper automobiles. You've got heavy-duty trucks, furniture. Some are bigger for Canada than others. Certainly the steel, you know, we've seen many hard hit communities that are steel-producing communities in Canada be hit by this. So the question is now, of course, what other sectors is the U.S. administration going to target in the same way? Yeah, and then steel is 50% there. Steel is a 50% tariff. And steel derivatives as well.

It's not just the steel parts, but, you know, a company that makes snow plow plows would be hit by that. It's not, you know, shipping coils of steel. It's a product that's made with Canadian steel that would be incurring that tariff. Right. So there was 10% of goods that were affected by these AIPA tariffs. And for Canada, that was 35%. Yeah. But of course, this has changed now.

The landscape keeps changing, right? So let's talk about what's changed now. So after the ruling, Trump imposed a new set of tariffs, 10% on everything from all countries, which means different things for different countries, which we're going to get into in a little bit. But what does that mean for Canada? Well, for Canada, it actually means that we are going to see a slightly lower tariff rate because we were at 35% under AEPA for that portion. of goods that aren't protected by the USMCA,

now that 35% drops to 10%. If it's going to be 10%, right now it's 10%. He's already threatened that that would be 15%. But then when the actual rules came out, it was back to 10%. So we're already seeing that kind of chaos. So within a span of days, Trump announces a 10% global tariff.

The next day says it's going to go up to 15%. Then the next day the rules come out, it's back to 10%. But is that just a lag in the bureau? bureaucracy trying to catch up with the president who changes global trade policy on a whim morning to afternoon that can change. Yeah. And as we know that, businesses like stability because they like to plan ahead. So again, this chaos is probably very, very difficult for businesses. Can you help me understand how are these tariffs legal? The decision that the Supreme Court made really came down to the fact that Trump was doing this on his own without congressional authority.

Whereas, you know, the section 122, which is how Trump's imposed this 10% tariff, he has that authority. However, it's got a cap of 150 days. So this 10% or 15%, whatever it's going to be tariff, has a time limit on it. It comes with a self-destruct button that says if Congress doesn't approve to continue that tariff after 150 days, it ends. So Trump has a window here where he's got a cover of this 10 or 15% tariff, wherever it's settled. to enact other kind of tariffs to have those in place. But what's different is that these ones, you know, don't necessarily require the congressional approval.

The reason he did this was so with IEPA was so that he could just move very quickly. He, you know, even though the court ruled he ultimately did need congressional approval and they just decided to go ahead without that, it didn't require any sort of formal investigation process or any of the bureaucracy that kind of comes. with some of the other tariff rules that the U.S. has at its disposal. He could move fast. He could get these tariffs imposed really quickly. He could start getting dollars into the U.S. Treasury, which is exactly what happened.

And they raised $130, $140 billion by halfway through December. That was the tally for the fiscal year that they'd raised through IEPA. So it was a substantial amount of money. Mm-hmm. Mm-hmm. Okay. So with these Section 122 tariffs that have been implemented, this is kind of this idea that he could act alone and act quickly.

There is a cap here, 150 days, and then he needs congressional approval. Is there a sense that he's going to get that? No. No, no, there isn't. Now he has to find other ways of imposing those tariffs. And he has those, like the Section 232s, don't require congressional approval. They do require this kind of laborious process of doing an investigation, a formal investigation to test. How has furniture imported from Canada or wherever posed a national security threat?

The bureaucrats in that department say, well, yes, it's obviously a national security threat. So he gets his, you know, formal investigation out of the way and then can impose those tariffs, which doesn't make a lot of sense to a lot of people in the rest of the world. But that's the way things go. And they already have a whole number of investigations beyond the ones that are already in place, the tariffs that are in place, looking at imports of aircraft, imports of pharmaceuticals, machinery, robotics, equipment, you know, kind of automation equipment, Canada, supply. a lot of that to the U.S. If that becomes an area he wants to target, that's one that could hit us pretty hard. Okay, yeah, that sounds like it would be a big issue for some Canadian companies here. So on these sectoral tariffs, Section 232 tariffs, which have already hit a number of

businesses or industries in Canada, you've mentioned there's like cabinets of whole sorts furniture, lumber, buses and bus parts, auto parts, steel, of course. Are these legally sound or could they be struck down by courts as well? Those are legally sound because he has the authority to impose those. So those are likely there to stay. You know, and it's why it's going to likely be one of the mechanisms that he uses to try to make up for what he's losing through court's IEPA decision. There's a section 301 which can target a country based on its unfair trade practices. He called that out in that kind of wild press conference after the court decision where he was like raving at the judges and everything.

and he started talking about how he's going to launch 301 investigations. And we're also initiating several Section 301 and other investigations to protect our country from unfair trading practices of other countries and companies. There currently is tariffs in place under that legislation targeting China. There is an investigation looking at Brazil, but he said we're going to launch more. And that's another area where, you know, Canada is likely possibly going to see the administration try to impose more tariffs because, you know, the U.S. has a list of grievances that it publishes annually. Like, what are the trade barriers that our exporters face? And in this, they list things like the structure of the supply management system around dairy and agriculture, things like the structure of provincial liquor boards and things like that. and some customs rules that we have.

And it's basically a laundry list you can pick and say, okay, I'm going to launch 301s based on these things that we've already stated are unfair trade practices that nasty Canada is mistreating American businesses with. So that's another one. And then he's got this kind of bazooka option. It's called Section 33A to dates all the way back to 1930. It's never been used, but it basically allows him to impose up to 50% tariffs on anybody or even ban implements. from any country he chooses. It's just never been used because it's, you know, it would invariably immediately incur all sorts of court challenges that are very similar to AEPA, but it's there in the arsenal. It's just no one, no president has ever, you know, gone for that bullet to,

to use it. So lots of different ways for Trump to slap countries with tariffs. So just want to summarize to make sure that I've got this straight. So there's the AEPA tariffs, which are off the table. But he could use a variety of sections from different laws, including sections. 122, which are the ones that expire after 150 days. There's Section 232, which targets specific industries. Section 301, which targets specific countries. Or this bazooka that you mentioned that could even ban imports from a country. You got it.

Amazing. Okay. So what do we know about how much these tariffs, the ones that are currently on Canada, how much they have hurt Canada? We see it in employment is the starkest area. Stats can and then the Bank of Canada tracks this looking at exposed trade exposed sectors. You know, we've seen layoffs at auto plants. We've seen layoffs at steel mills.

So those are already starting to feel it. And it also is just the uncertainty creates its own problem, even if you're not directly impacted by it. If you're a foreign company thinking of where you're going to open up a factory, if you wanted to really target the U.S. customer, you had like the stability of Canada. You had the nearness of being set up in the U.S. itself or you had the low labor costs of being in Mexico. And this kind of takes Canada and Mexico not out of the question completely, but it certainly would be kind of a red flag that you don't know whether that your industry is going to be targeted. We don't even know what's going to happen with the U.S.MCA or QS.MCA agreement. So that's all up in the air. So it's just this general level of weakness in business investment and uncertainty that causes businesses to hold back.

You know, that just has a compounding effect. When you say it has a compounding effect, what do you mean by that? Well, slower business investment just translates into weaker employment. That hits people's paychecks. You know, that just trickles down to the consumer just having less money that they can spend, you know, and just a weaker economy overall. All right. So we have a sense now of how these tariffs have hurt Canada.

What do we know about how consumers have responded to this tariff regime? Yeah, consumers have responded in a very big way. way by just staying away from the United States in droves. We've seen massive declines in both a number of Canadians traveling down to the United States and how much money they're spending while they're down there. In fact, one of the key factors for targeting Canada is wanting to have more access to dairy for U.S. dairy producers in Canada. So on the one hand, he's trying to boost this sector that is really small, you know, I think it's like 800, 700 million in annual dairy exports, While in just the third quarter, I think the number, it was something like $1.2 or $1.5 billion less spent by Canadian consumers in the U.S. to travelers down there.

So to rally support and to basically defend the dairy lobby, he's alienating a lot of people who were going down into the states. And we see this, you know, in tourist destinations in Las Vegas. We've seen airlines massively cut back on the number of routes that they have flying to the states. And we're now seeing a lot of the tourist destinations in the states try to like, okay, what can we do to get the Canadians come back? Because they need our money. We're the largest source of foreign tourist spending. And, you know, by withholding that. And that's not something that's being done by any, you know, legislation or it's not a counterterror for anything.

That is just a collective sense of feeling wrong. And this is how we're responding to it. We'll be right back. So it's been over a year since Trump launched his global. trade war. And one of his original rationales was because he wanted to eliminate the trade deficit that the U.S. has with its trading partners. So the trade deficit, meaning that the U.S. is importing more goods from a country than it is exporting. And that's something that Trump thinks is very unfair. He's said that a lot of times. How has this trade deficit changed over the last year?

It's gotten worse, which is, you know, we just got the numbers finally for 2025. And the U.S. trade deficit hit a record 1.24 trillion, I think. So, you know, it was wider than it was when he took over. It's not a surprise, though. As soon as the uncertainty of the trade war, you know, his threats kind of early on, and importers naturally said, well, we got to get as much stuff into this country now as we can before the tariffs take effect. And so you saw this huge influx of goods meant that the U.S. trade deficit really expanded in the early part of the year. Okay, so companies were bringing things into the country before because of the... Exactly. We saw all sorts of things.

There was importers like loading goods onto trucks to just drive them down to the states and park them in vast parking lots filled with stuff that you... It's basically your inventory storage, but you didn't have the time to go and secure a warehouse. So they would just fill trucks of stuff and bring it down and have it sitting there and draw from that so, you know, when they needed it because it would be tariff-free. It makes it very difficult to know what's going on with the trade deficit in the States because importers are trying to react to these chaotic changing decisions that keep happening. But what you can see is that the U.S. trade deficit with China, for instance, has dramatically narrowed. There still is a very large trade deficit, but it is really shrunk. It shrunk with Canada as well.

You know, he used that claim so many times that he was subsidizing Canada. America was subsidizing Canada to the tune of $200 billion or $300, and then it would change it to $500 billion. You know, a lot of that was just because we ship a lot of oil to the states. And if you take that out of the picture, we didn't have a trade deficit with the U.S. But our trade deficit, the U.S. trade deficit with Canada shrunk. But it's also expanded with a lot of countries. So with Mexico, it's gotten a lot bigger. The U.S. trade deficit with Vietnam has expanded a lot because those are the cheaper low-cost countries that now are supplying the goods that China would have supplied before. Okay. What do you make of the fact that the trade?

trade deficit persists. You know, the U.S. is a consumer economy. They consume more than they can produce at home. And that's just the way it is. It's interesting. It's one of the reasons you've seen this weird narrative come out of the White House of kind of chastising Americans for buying too much stuff. You know, do your daughters really need more than one doll? Why do you have so many pencils? You know, you only need one pencil. And it's this idea that if you all just stop buying stuff, you know, that you want, then we wouldn't have a trade deficit because to get all that stuff would cost a fortune to make it in America because of higher labor costs, you know. So, you know, is a American factory going to set up a doll factory that it can produce dolls

to supply that American family that wants to have three dolls for their daughter instead of one at an affordable price? Probably not. And so those come from foreign countries where it's cheaper. It's interesting that you say this, you know, just buy one dollar, buy one pencil. But isn't the American economy dependent on consumer spending essentially? Oh, very much so. Very much so. It's huge. Consumer spending is a massive part of the American economy.

It's one of the contradictions of all of this, you know, on the one hand saying, well, we need to stop doing this. But that is what props up Americans economy is the consumer. It's been like the surprising resilience of the American consumer has, you know, even before Trump came along. There were so many times under Biden where there was like, oh, well, a recession is imminent, a recession is imminent. And then, lo and behold, the consumer just consumer kept on buying and kept the economy afloat. And so that continues to be the case. So if Trump gets his wish and everybody does stop buying stuff, then he would have a much bigger problem.

Ranting and raving about trade deficits is a thing that's probably not going to go away, but it gives them something to use as a justification for these tariffs. So it sounds like some countries have benefited in a way. from Trump's tariff regime. Which countries would you consider winners here? I think you mentioned a couple there that the deficit has gone up quite a bit. But yeah, so which countries should consider winners or at least countries that have kind of survived the chaos?

Yeah. And it's almost like you have to look at what's happened with this ruling and the changing tariff regime because a whole bunch of countries, you know, Canada wasn't among them. We right from the beginning said, you know, we're going to stand up to the bully. going to have counter tariffs. We did pull those back, but there's, we've just refused to agree to do a bad deal. It's always been the line. No deal is, is better than a bad deal. A lot of other countries

said, well, we need to just get a deal, any sort of deal, because they didn't have the protection of Kuzma or USMCA agreement. So there's kind of agreements that have been in place, you know, the UK signed one saying, sure, we'll make all this investment, but it'll cap our tariff at 15%. Well, now this change that we've seen with AIPA being thrown out and new tariffs coming in, those tariff rates might actually rise for some of these countries. Like the UK is in a position where if the tariff was 15%, if Trump decides the new tariffs are going to be global tariffs, it's going to be 15%. Once you add on some of the other compounding tariffs, so they add on sectoral things,

well, suddenly the UK is worse off now than they would have been before. Canada, though, like I said earlier, Canada and Mexico are actually beneficiaries for now of this change just because it lowers our overall tariff rate, even if tariffs went up to 15% in the case of Canada, that's still lower than the 35% we were at before. What about China? How does it fare in this? Is it a winner? Is it a loser? China's a bit of a winner on this front. I mean, China's been a surprise all around. They're a little bit of a winner because they too had a higher IEPA tariff rate than this global tariff. But they still are being hit by some of the other sectoral tariffs, and then they've

got this Section 301 tariff targeting, you know, China. But China surprisingly has seen its exports to the U.S. plunge, but its exports to the rest of the world rise. So they're actually exporting more than they were before. It's just shifted a lot. Africa is a major destination for Chinese goods now. Europe, it's risen. What we might be seeing is this period where China seems to be faring okay, but it could

be an illusion. You know, it's going to take some time to see how this all plays out for them. And then what about the U.S. then? On the whole, has it benefited from these tariffs? I mean, the U.S. Treasury has benefited because it's brought in money, but American consumers haven't benefited. American businesses arguably haven't benefited. You know, if you take a look at manufacturing employment, which was a big point of Trump bringing all this in was to bring American jobs back to America, factory jobs, while factory employment is declined, not all that differently than Canadian factory employment is declined.

You've got this failure to get the benefits of tariffs, but you also have the corollary is you also have consumers having to foot the bill for these tariffs. Because, again, you know, Trump doesn't acknowledge this and no one in the U.S. administration does, but an import tax is basically a tax on your own people because it's the importer that pays the duty and they are going to pass that on to their, you know, customer and it just gets fed on down the line to the consumer. And so it's arguably one of the reasons why inflation in the states has been kind of stubbornly high and, and it's certainly in certain pockets. Trump was at a steel mill the other day and the executive was congratulating him

and saying how fantastic it was because he'd just been able to jack up prices by like something like 15%. Well, you know, jack up prices on who? Well, you're U.S. customers. So basically, when you ask, you know, how's America fared? They were kind of worse off under the tariff regime that we had under Trump with IEPA. And they're arguably going to be just as worse off if he finds ways to replicate the AEPA tariffs with all these other bits of tariff legislation at his disposal. Okay. One of the goals here with Aipa tariffs was to kind of bring investment back into the U.S. Now that they're gone, will that endanger this whole plan to get more investment into?

the country? We saw during the state of the union, Trump threatened any countries that were thinking of changing some of these investment deals that they'd signed with the U.S., you know, now that this Supreme Court has ruled that the whole underpinning tariff regime that was used to threaten those countries to sign the deals in the first place doesn't exist. He's saying, don't welch on our agreement. So it's a mixed bag, and it's going to probably take some time before we actually could see how much actual investment the U.S. bringing in. Canada, interestingly, has historically been the U.S.'s largest source of foreign direct investment. We're massive on that, but we've pulled back a lot. It's not a good, safe, stable environment

for a lot of businesses to invest in the last year. Just to end here, Jason, I'm wondering if there's another big lever that Trump could yank to inflict broad sweeping tariffs on everyone. Could there be a Liberation Day 2.0 already comes out with that board and has all the lists of the countries? Or are we going to be seeing death by a thousand tariff cuts to the global trading order? I think it can be both. Death by a thousand cuts. But Trump is a showman and he wants to have that moment. You know, he wants another liberation day where he can stand there and hold up a sign with all the countries and their new tariff rate. I am certain that we're going to see another theatrical moment like that as he brings in some of these other things. Because there's a lot of these other

tariff options that he has. He can't put them all on probably one single board like he did that day. It's not all under one tariff regime because he's got to conduct investigations and he's got to do all these things that take months and months and months. But he will, I'm sure, want to stand there before the cameras at some point very soon and kind of list here are the ways I'm going to punish the world for taking advantage of America in his view. So it sounds like one thing might be certain, which is tariff uncertainty in the future. Yes, yes, which has been the thing that's been certain from the beginning of this, and we've only just amp that up even more now.

Jason, thanks so much for coming back in the show. Really appreciate it. Thanks a lot for having me. That was Jason Kirby, a staff reporter with the Globe's Report on Business. That's it for today. I'm Cheryl Sutherland. Bianca Thompson joins us from the Canadian Journalism Foundation's Black Fellowship Program and is our associate producer.

Our producers are, Madeline Wynne White, Rachel Levy McLaughlin and Mikhail Stein. Our editor is David Crosby. Adrian Chung is our senior producer, and Angela Pichenza is our executive editor. Thanks so much for listening.