The Munk Debates Podcast - Friday Focus: Another tariff announcement and Bibi scores a political victory

Episode Date: March 28, 2025

Friday Focus provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving the news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates. Rudyard and Janice open the show with Trump's announcement of auto tariffs which, coupled with the tariffs on steel and aluminum, could cripple the Canadian car sector. Instead of doubling down on a dying industry which is bound to the US, why not invest in an industry like mining that we export to the rest of the world? In the second half of the show Rudyard and Janice turn their attention to Israel, where a budget victory for Bibi has bought him 18 months until the next election. Can he free himself from the right wing ideologues in his coalition? Or will this new sense of security galvanize him to continue prosecuting the war in Gaza? To support the Friday Focus podcast consider becoming a donor to the Munk Debates for as little as $25 annually, or $.50 per episode. Canadian donors receive a charitable tax receipt. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue. More information at www.munkdebates.com.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

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Make your donation, and we will send you each and every Friday a link to listen to the full-length edition of this program. Thanks in advance for your generous contribution. Welcome to the Friday Focus podcast. Rudyard Griffiths here, the chair of the Monk Debates. It is the 28th of March, and I'm joined by Janice Gross Stein, the founding director of the Monk School of Global Affairs. Janice, another consequential week at home and abroad. We're going to unpack it all with you.

But before we do that, let's just thank some of the fantastic monk supporters that have come on board to donate to the monk debates over the last seven days in aid of our efforts to convene civil and substantive debate on the big. questions of the day. So a big thank you to Alexandria, to Diviish, to Anne, to Doreen, and Elizabeth. Five fantastic women. That's amazing, Janice. Thank you indeed. Well, let's start with, I think, what everybody is buzzing about, an announcement on global auto tariffs out of the White House that will see a fairly significant levy, 25% against not just auto manufacturers in Europe and Asia, but Canada, too, some detail here that will kind of sift through that the tariffs will not come into effect immediately and in full force, and there are maybe all kinds of complicated calculations that have to be figured out in terms of how many

parts in a car crossing the border are made in America or not. But regardless, Janice, It's another significant targeted tariff that takes aim at this time, not aluminum, not the steel industry. Those already have 25% tariffs levied against them here in Canada, but the auto sector. It for sure is registered. And of course, this hits Canada really hard. Auto exports are our second biggest. export to the United States. But the point you made matters here, because the tariff is not only on cars, finished cars, they're on all the parts as they cross back and forth across the border.

And a component part crosses the border eight to nine times. How they're going to impose tariffs on that each time they cross the border. And Roger, how does this all add up? If there's steel, and aluminum in those parts. The nightmare world, you tax the steel that's in the parts, you then tax the part more than once as it crosses the border. And then you figure out if this is covered or exempt

by in Kuzma, the free trade agreement that Donald Trump signed with us. And when we get to the next piece next week, you can have tariffs that if you actually add, them up, are pushing somewhere in the neighborhood of 40 to 50 percent. Yeah. Those are crippling. Yeah.

Look, we always like to have a little bit of debate on the program. I'm very sympathetic towards, you know, the tariffs that have been leveled against Canadian steel and aluminum manufacturers. I think they're egregious and they're completely not in the interest of the United States in terms of its supposed objectives for these tariffs, which is to provide America with the key components to shore up its military industrial complex, the supply chains that feed it, et cetera, et cetera. I think the thing with the auto sector, we have to acknowledge, Janice, is that this is a industry focused in one province, Ontario, that has been in decline

steadily over the last 20 years, with fewer, fewer cars made every year. And with the exception of, you know, some high paid union jobs in a few plants. The reality is a lot of the industry is parts manufacturers. And those are relatively unskilled, lower paid work. It is not the kind of high productivity, you know, high, high tech manufacturing that, you know, Canada so obviously needs. And I wonder, Janice, you know, we react to these terrorists very emotionally. Mark Carney is already.

announcing this week, $2 billion in taxpayer subsidies to the industry. This is on top of, you know, 50 billion that the Trudeau government put into EV plants, which now look largely obsolete. At what point do we acknowledge that the auto sector is the 21st century equivalent of the 20th century cod fishery, and we just get out of it. We get out of this business, and we get into things where we are actually engaged in high-tech manufacturing. We are actually engaged in enhancing Canadian productivity and wealth creation as opposed to just doing what we seem to love to do in Canada, which is find an industry,

hope it's heavily unionized, and then subsidize the heck out of it. Look, I'm sympathetic to argument to Richard. But last week, or a couple weeks ago, you were talking. about how important not only advanced manufacturing jobs are, but having a manufacturing sector. Some of the jobs in any manufacturing

sector are going to be lower skilled. Those are still good jobs for people. And in fact, the auto parts industry provides jobs for people who were this industry to close, it would be quite difficult to retrain and to adjust

So when we look at, you know, what government does for people, when it works for people, cutting off the whole lower-skilled sector and saying these are obsolete industries, well, you know, car manufacturing in North America is really not obsolete. How have we coped with this? We know how we coped with this. Tariffs against Chinese cars. Get out of the sector. Well, would that really look like that would mean that North America drove Chinese cards, frankly.

So I think there are arguments to be made here that is overwhelmingly in the U.S. interests. This is not about getting out of the sector. This is about what we talked about on this program, forcing these parts manufacturers many, you know, Linomar in Canada, Magna, to move production. from Ontario to the United States to the Rust Belt, which faces similar kinds of challenges. That's what this really is about. And it violates an agreement that was negotiated painstakingly

in the First Trump administration. I don't have any sympathy for it. Well, it's interesting you mentioned Lindemar because it's a big parts manufacturer. People on the Lindemar production lines make $20.30 an hour, Janice. These, again, are low-skilled, comparatively low paying jobs that unfortunately a lot of immigrants are forced to take

because other people don't want to work there because the pay is not great. And hey, it ain't too fun working on an assembly line punching out car parts. You know, the mining sector, we haven't built a mine in this country, a major mine in a decade because of over-regulation. The mining sector in the next five to ten years will need 200,000 workers to replace the job losses that are expected through retirement in that sector. Because, hey, people don't want to go into mining. You know, that's tough, that can be tough work too.

And it, you know, it's perceived of as somehow dirty because it's associated with resource extraction. Look, our economy is going to need to go through an adjustment. These tariffs are going to, you know, be tough on some industries like cars. And instead of doubling down on a dying industry, what about, you know, picking an industry like mining where it's one of our major export industries to the rest of the world, not to the United States? It's to, we export gold, we export precious metals, rare metals all around the world. And yet here we go, doubling down on an industry that is, you know,

in serial decline, bound hand to foot to the United States, when we could have the opportunity, just like those cod fisher people or whatever you're supposed to call them, we gave them a transition. We funded the ability for them to exit the cod fishery and find other jobs. Well, I think that's what we should be doing with the auto sector and some of these other industries that would actually be good to see Canada get out of. Because, A, they're way too bound up in the United States.

The supply chains all run north-south. And second, because the industries themselves are not healthy. They're not dynamic. They're not driving Canadian productivity gains. And they are serially, serially addicted over decades to large-scale government subsidies, even to be sustainable in their current form. Look, I think what you're talking about is going to happen anyway. And so if you just think for five, seven, ten years, then we've robots.

that in factories that are making these car parts. And by the way, there will be robots, humanoid robots, that will be going into the mines because we're already seeing that happen. So you are strategically right, that 10 years from now, there will not be much Canadian employment in either of these sectors, frankly,

in either mining or in car parts manufacturing, and we're going to have to figure it. And you're also right, that mining and, exporting, if we do it in a reasonably sustainable way and don't just spoil our own environment, and there's no reason we can't do it that way, reasons to some extent of our dependence on the United States, which is a strategic comparative. Let's look at the realities today, Roger. We're in the middle of an election, right? You know it would be suicide for any political leader

right now, 10 days into a federal election, which is, by all intensive purposes, is undecided close, not to announce support for the auto industry. I have yet to meet that political leader who would do that from either party. Well, look, I think Pierre Pollyov, to his credit, did not announce a $2 billion, just no strings attached, no objectives, profiled for the money. Just here's $2 billion for Mark Carney because, hey, I guess politically, I've got some votes I need to win, you know, in southern Ontario. And I can't afford to lose the more. I lose this election. That's the truth. Yeah, well, look, it's time for the country to grow up. We're in a major moment here, a moment of real threat. And what have both these parties done over the last, the first five days or so of this campaign?

They've announced tax cuts. Tax cuts for people's TFSAs, tax cuts for seniors, as if seniors in this country need more money. They've done tax cuts on people's personal incomes. None of this, Janice, addresses the real structural issues facing the country. There's been nothing on, guess what matters, levels of business taxation in Canada. They're increasingly deeply uncompetitive with the United States and other countries in the world. There's been nothing on investment and encouraging foreign direct investment in Canada of by possibly spending what's now, these parties, we've added it up here at the hub this week.

We've got a great column today by Theo Orgidis. 20 odd billion dollars that each one of these parties has spent putting money in people's pockets when we're supposedly in a national emergency, you know, fighting for the country's very survival and we're feathering our own nests? I mean, come on. This just is not serious.

Well, look, I'm going to argue back. It isn't serious. You're right. But again, I'm going to say we're in an election. And I don't want to hold either of those two leaders to an impossible standard. And let's talk for a minute about one thing, which is the tax-free savings account. What's the subsidy for? The subsidy is if you invest in Canadian companies.

Well, that is not a bad thing when investor confidence is rattled by what Trump is doing and investment in Canadian companies is drawing up. There's at least a certain coherence about that in the moment. The bigger point, unfortunately, is correct. We have to, when this election is over, which is not long from now, whichever party wins has to have a strategic approach to our economy. Because the adjustment that you talked about in the caught fishery, a decade.

You remember how long that time. and how painful it was. And when we begin to move out of legacy sectors, either because of the problem we're having with the United States, nobody minimizes that, or because it's technology that is changing the working environment. That is not an overnight shift. That will take years,

and it is going to require support for the transition of people who are going to be left behind in these sectors. There's no question about it. These are large numbers of Canadian. Well, I think you're more optimistic than I. I mean, if our leaders and parties don't talk about the kind of challenging and at times painful structural reforms that we need to rebuild our economy, even before the Trump tariff threat, because our economy, you know, was in bad shape vis-a-vis international, you know, peers and competitors, if no one talks about in the election and no policy pledges are made, and instead it's all just about sending

checks to different industries and groups, either directly or indirectly in the case of, of, you know, tax cuts, tax cuts. I mean, it's like Winston Churchill did not get up at the Battle of Britain and say, ladies and gentlemen, here's a giant tax cut to bring it home as we, you know, charge the beaches and fly into the air. I mean, I don't know, Janice, I think you have a certain, maybe elite office. optimism here that the technocrats can take over after an election. But if we have no political consensus for any kind of of hard work on ourselves and any kind of policy conversation in

election, any kind of conversation that requires us to think through the things we actually need to do and to give a leader of either of these parties a mandate in an election because they've said those things and we voted for them? I don't know. I think we're whistling Dixie, and that's Mr. Trump's favorite tune. Well, let's, Janice, though, have a bit of time to talk about the Middle East.

It's one of your deep areas of expertise, and there's been some big events there in the last seven days. So a quick break, back on the other side with our monk supporters and donors. Thanks for listening to this excerpt of the Friday Focus podcast to get full-length editions of each and every episode of this program. Simply go to our website, www.com.

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