The Indicator from Planet Money - Canada fights tariffs with tariffs

Episode Date: September 8, 2026

The era of friendly diplomacy has fallen to the wayside once again as the U.S. - Canada trade war enters a new phase. This time, Canada is countering the latest round of tariffs with their own, targeting American dairy, steel and electronics. Today on the show, we hear from the host of CBC’s Cost of Living podcast Paul Haavardsrud on Canada’s trade war strategy.Fact checking by Sierra Juarez.Your Next Listen — Why there's no referee for the trade war— Why a trade war makes wigs (and bones) cost more + LeBond JamesConnect with The Indicator — Sign up for The Indicator’s weekly newsletter! — Buy the Planet Money book — Find our socials, YouTube and more! — For sponsor-free episodes, subscribe to NPR+ Support public media with NPR+ and enjoy perks for over 25 podcasts like this one. This show’s perks include sponsor-free listening. Learn more at plus.npr.org. See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

Boyland, I'm so proud of myself. I just won the top prize at Ring Toss. Oh, is that why you're holding this giant teddy bear, Darian? No, I just brought this one from home, but what I did win was a subscription to the Indicator Newsletter. Oh, congratulations. That's very exciting. You can sign up too at npr.org slash indicator newsletter. NPR. This is the indicator from Planet Money. I'm Adrian Ma.

The trade war between the U.S. and Canada is entering a new phase. Back in August, President Trump slapped 50% tariffs on a range of Canadian goods, and now Canada, one of our closest trading partners, is fighting back. Today, counter tariffs, ranging from 15 to 50%, kick in on imports from the United States. And that'll affect everything from steel to dairy products to electronics. And so we felt like this was an appropriate time to check in with a friend of the show, Paul Havershrued. He hosts a podcast called Cost of Living, which is a show about money and money. economics from the CBC, and the CBC, for those who don't know, is the Canadian Broadcasting Corporation,

sort of like an NPR cousin to the north. So I guess in a way, Paul, we're practically related. We absolutely are. We keep talking, though, in like not happy family reunions. It's always, it's always hopefully we're not in like a family feud of some kind. Like, are we cool? Oh, CBC and NPR are great. And you and I, Adrian, are super cool. After the break, Paul's going to help us. understand how Canadians are thinking and feeling about this situation, and tell us how Canada's trade war strategy is just starting to take shape. So, Paul, the last time that we spoke, it was January 2025, there were hardly any tariffs between our countries, and now we're looking at U.S. tariffs on more than $20 billion of Canadian goods, including dairy, alcoholic beverages,

cement, even hockey sticks. And in response, Canada has, as of this required, according, put on roughly $20 billion in tariffs on American goods. And so I'm wondering when it comes to U.S. tariffs on Canadian goods, which ones are Canadians most concerned about? Well, the most unnerved is what's happening with autos. Because really, when you look at what we call Kuzma, what you call the USMCA, used to be NAFTA, our free trade deal, really at the heart, it's an auto pact. We've had an auto pact since 1965. Both sides have agreed on it. It's done good things for our auto industries on both side of the border, auto workers, and it really seems like what the U.S. is coming after or what the Trump White House is coming after is our auto sector.

When you say Canada's auto sector, what kinds of things are they making there? Well, we make cars and trucks here. Like we make the Chevy Silverado. We make some other medium and heavy duty trucks. We have a big parts sector. And yeah, all of that is being hit and adding incremental costs to the price of cars. So with these tariff threats coming from the U.S., Canada has responded, what's Canada's overall strategy with their counter tariffs? It's kind of simple. It's just we have to stand up to the bully, essentially.

Like, Canada doesn't want these counter tariffs. They're going to make the stuff we buy more expensive. But nationally, again, we're also willing to accept it, willing to accept economic pain, higher prices because what's the choice, Adrian? We just roll over and then the bully keeps coming back for more. So then strategically, if we zoom in on like what is our strategy, what are we targeting? Well, we're going after stuff in swing states like Ohio, like Pennsylvania, some other border states. And the hope here is that the counterterrists will put some political pressure on the White House ahead of the midterms. About 80% of our counter tariffs are for industrial inputs. So stuff that's not super sexy, steel,

aluminum, the rest are for consumer goods. And if you look at the U.S., you have what, a $30 trillion economy. So 20 bill on that is less than 1%. The reality is most Americans are not going to notice these counter tariffs. But strategically, Adrian, Canada is looking to cut narrow but deep with these. I mean, I understand Bourbon is also a flashpoint in this round of trade dispute. Is that right? Well, it is. And that really gets to Canada's counter tariffs cutting narrow. but deep. I mean, we have nothing against the good people of Kentucky or their bourbon, but we buy, as Canadians, a lot of Kentucky bourbon. It's not a federal government thing. Eight of our 10 provinces have decided on their own, yeah, we're mad at what's happening. We're

angry. What can we do to get back at the Trump White House? We control our booze purchases. So we are not going to stock that in provincially controlled stores anymore. You know, we should mention here that even more tariffs could be on the horizon. President Trump announced more punitive tariffs on Canadian cars and trucks that would go into effect January 1st. And you started to talk about the auto industry before, but what would these even more serious tariffs mean for Canada's auto business? You know how when Ghostbusters, when Bill Murray asks, what would happen if we cross the streams and Egon says, it would be bad? Adrian, those tariffs for Canada, they would be bad. Like that's it. 50% tariffs on Canadian autos is like an existential threat to our car and truck

industry here. It would potentially decimate Canada's auto industry. It would blow up an auto pack that has been good for both sides of the border, automakers on both side of the border and car bars on both sides of the border since 1965. So it's such an existential threat. Maybe it's just a move. It's trying to get us back to the table and get some leverage in a future trade deal. I mean, it's still January 1st is what, four or five months away. We've got some time to get back to the table. How are everyday Canadians feeling about this? Like, is it water cooler conversation or people talking about it around the kitchen table? It absolutely is. It's very present because we get a lot of U.S. media up here. We can't help but hear everything that's being said, whether it's about

the tariff specifically, whether it's the Lake Ontario stuff. The 51st state nonsense has really, really played up here. I mean, that has really got us riled up. You're referring to President Trump's executive order, renaming Lake Ontario to Lake America, and then his references to Canada being the 51st state. And referring to our prime minister as governor, I mean, that's just, it's disrespectful. All of a sudden, you take this from, okay, you're having a trade dispute, which can exist over here, to something that is much more fundamental to us. It's speaking to our sovereignty, economic and otherwise. Again, it feels like an existential threat to Canada. So if you think about how this could play in the broader trade discussions, the federal government right now in Canada,

the people who are negotiating this, Prime Minister Mark Carney, they seem to have a lot of support from rank and file Canadians across the political spectrum. There's definitely, I think, an element of anxiety that comes along with this, but also it sounds like the mood is sort of defiant. Yeah, absolutely. Because, again, we're not going to crater the U.S. economy. We can't do that. Can we kick in the shins? Sure.

Can we make different sectors feel that? And can we hope that eventually cooler heads prevail and you back off? Yeah, but we want sort of a return to more of what has become normalcy over the last, you know, 60 or 70 years. We know Trump has his negotiating style, you know, is just attack attack, right? What about the Canadian government? Do they have an incentive here to make concessions, or do you think they're locked in for now? Absolutely. We have a ton of incentives to make concessions. We're kind of slow playing this a little bit as much as we can. But we also know this $20 billion of tariffs we're talking about right now. This isn't even the main event. We're still not even talking about Kuzma or USMCA renegotiations or negotiations, which we still have to get into. Right. So we know if we roll over right now on this 20 bill, then what starting position are we coming at when we sit down to the table for those negotiations? Right now, It does look, Adrian, like Canada and the U.S. are doing some signaling back and forth to each other. Paul Havershrued is host of the podcast Cost of Living from the CBC.

Paul, despite all the geopolitical tension, I'm glad there's no public broadcasting tension between us. We're always cool, Adrian. Looking forward to having you on our show. If you like this program and find value in it, the easiest way to support our independent journalism is by joining NPR Plus. Go to plus.npr.org, which will get you bonus episodes, invites to virtual events, and sponsor-free listening. This episode was produced by Cooper Katz McKim with engineering by Robert Rodriguez. It was fact-checked by Sierra Juarez and edited by Julia Ritchie. Cake and Cannon is the show's editor and the indicators of production of NPR.