The Munk Debates Podcast - Friday Focus: Trump's on-off-on tariffs and a new Canadian Prime Minister

Episode Date: March 14, 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 begin today's show trying to make sense of Trump's tariff policy. Rudyard argues that Trump is not concerned with stock market losses if it means keeping promises to his voter base and reworking the American economy so it benefits blue collar workers, but tariffs are not going to bring their jobs back and will end up making everyone poorer.On the second half of the show Ruydyard and Janice turn to Canadian politics and the election of Mark Carney as Liberal Party leader, thus becoming Prime Minister of Canada. As much as we criticize politics in the US, here we have a PM who does not have a parliamentary seat, was not elected by the Canadian public, and is now representing Canada on the world stage. Meanwhile Canada's premiers are stepping in to negotiate trade deals with Washington while Ottawa takes a backseat. What is happening here? 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.

The following is a complimentary excerpt of this week's edition of the Friday Focus podcast by The Monk Debates. To access full-length editions of each and every episode, along with all kinds of great additional benefits and perks, become a donor to the Monk debates. You can do that for as little as $25 a year, and you'll receive each and every year 50 Friday Focus episodes at full length. It's all available right now on our website. in just a few simple clicks. Triple W. The Monk Debates.com. Look for the Friday Focus option in our navigation bar, the top right of the website.

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 for the 14th of March. I'm Rudyard Griffiths, the chair of the Monk Debates. I'm joined by Janice Gross Stein, the founding director of the Monk School of Global Affairs. Janice, where do we find you this week? You've been jetting all over the world from Taiwan to Washington, D.C.

Do we finally have you back in what Gore Vidal, I thought, beautifully referred to Canada as our Lady of the Snow's? Yes, you do. Yes, you do. Not in Toronto in Ottawa, but back in the snow for sure. Awesome. I want to thank a bunch of new supporters that came on this past week to help the monk debates spread civil and substantive conversation about the big issues of our time. So thank you, Igor, Raghav, Yathu, Cameron, Chad, Elliott, Linda, Miguel. Again, thank you so much for your generous charitable donations to the monk debates.

If you're interested in supporting our work to make sure there's a public square, us to inhabit and have some kind of conversation with each other. Go to our website, www.com, and check out all the different options. If you are Canadian and listening to this, it is a charitable donation, and you will get a tax receipt. So thanks again. Well, Janice, we got to start with tariffs. It was another crazy week.

On again, off again, aluminum, electricity, caffles. forward down to Washington, possibly a bit of a humiliation at the hands of Lutwick, the Commerce Secretary, and a stock market now officially in the United States in correction territory. What do you make it all? Well, let's start with the stock market. You're right up your alley. That, frankly, if you look at that trend line in the stock market, comparing the two Trump administrations.

That's a really interesting thing. You know, it's at least an indicator. In the first Trump administration, the stock market went up. In the second Trump administration, we're very early into it, bare market territory. What does that tell you about the confidence of investors in that, frankly, economic chaos that Trump is creating not only for Americans, and these are American stock. markets so Americans are certainly disproportionately represented, but everywhere in Europe, in Canada, in Asia.

I would say this is an astonishing record of destroying confidence more quickly than even Trump one did. This is not the same Trump. Trump two is not Trump one. Yeah. So let me put an argument out there. What Trump is doing, you could argue, is for. following through with the series of election promises that he made to the people that elected him, the majority of which are not the 1% who own half of all of the equity value of U.S. stock markets.

Instead, these are the people, the men and women in the United States, who've seen their wages stagnant over a generation, who've seen their communities hollowed out by globalization and the shipping of jobs in manufacturing overseas. So yeah, the stock market's down 10%. Wow. You know, the oligarchs, yes, have had billions of dollars of their wealth, especially Elon Musk, vaporized. But, but what Trump is doing, and he's said it increasingly, is there's going to be a rough patch. We're going to go through an adjustment. And look, maybe tariffs are not the way to do this. But he is focused to, I think, to his credit on trying to, to follow through on what was a key promise of the election, which is to rework the American economy so that it benefits blue-collar workers who, frankly, have lost out in America's headlong rush into this highly financialized, highly, you know, software, AI-based, you know, economy. And, you know, it's going to be rough. But I'm sympathetic to the idea that the spoils of American

prosperity and progress have not been shared equally. And Trump is trying, he's trying, and I don't know if it will be successful. And again, I don't know if tariffs is the right way to do it. Maybe tax redistribution would be better. But he's trying to do something to address an American society that has been so deeply scarred in, malformed by mass economic inequality brought on by the financialization of everything, brought on by the power and privilege of Wall Street. Maybe it's time that Main Street gets a kick at the can, and maybe Trump's going to let that happen. So, Roger, I couldn't agree with you more that the working class, and frankly, the lower middle class has really struggled, except ironically during

COVID in the aftermath of COVID when there was, to go back to your point, income redistribution. It wasn't done through taxes. It was done through payouts, but the standard of living went up. And it really matters to say this because we don't pay enough attention. Generally speaking, the standard of living in the working class and lower middle class went up during COVID because of those payments. And by the way, disproportionately went up. among minority voters for the record, just so we get that on the table. I think tariffs is an absolutely disastrous way to help the working class and the lower middle class.

And why is that? Because what's the purpose of tariffs? Leave aside now revenue generation, which you and others that the hub have argued is a really important reason for him doing this to generate revenue so we can do one more tax cut or sustain the tax cut that he's already put in place, which will benefit disproportionately the rich. But leave that aside for a moment. Why are tariffs such a terrible way to do this? Because tariffs don't, what's he really saying when you strip it all away? Move your plant to the United States, bring back jobs to the United States.

Some of these jobs will never come back, Roger. You know it as well as I do. It is not economic to manufacture toys in the United States. It doesn't make a difference what you do on tariff or taxes. That kind of manufacturing is gone from every developed economy in the world because the cost of labor is just too high because we have the benefit system that we have. And he can whistle till the cows come home. Those jobs are not coming back. So where are the jobs going to come back?

They're not going to come back. They're going to be manufacturing jobs at the higher end. And the tariffs are destroying the relationships that produce those jobs. I think it's catastrophic. I don't think creating jobs for the working class is catastrophic. That's an imperative if we're not going to have Trump 3, Trump 4, and Trump 5. But this is the wrong way to do it. I think the counter argument is that, you know, the perfect can't be the enemy of the good.

And yes, it'd be great if America introduced a value-added tax or large taxes on, you know, the 1%. But that's not going to happen. None of that legislation will get through Congress. And that's not simply a problem with the Republicans. That's a problem with the Democrats. It's a problem with big money in U.S. politics, which is sanctified by their Supreme Court. And none of the Citizens' United decision, none of that is going away. The argument in favor of what Trump is doing is that he is bringing about a VAT, a sales tax, by virtue of a backdoor, which is tariffs.

Tariffs is simply another way politically to get away with taxing Americans for the things that they, they're not creating the revenues to allow them to enjoy. The United States in the first six months of this fiscal year, which just ended, is on track to run a number of. deficit, the biggest ever, an acceleration of the deficits under the Biden years, well over a trillion dollars, six to seven percent of GDP. So it's great to say that, yes, poor people, blue-collar people did well in the pandemic because we were giving away free money. We were borrowing, in the case of the United States, hundreds of billions of dollars in a completely unsustainable fashion to fund direct transfer payments, cash payments, to payments to people. And again, I'm a bit sympathetic here. Maybe they're not going about it as elegantly and

sophisticatedly as, you know, the Brookings institution would. But someone has to deal with America's spending problem. They are headed towards a financial reckoning that will permanently damage the quality of their institutions, the resiliency of their society, the, the resiliency of their society, the material lives of their citizens because of uncontrolled deficit spending combined with an inability politically to come up with the revenue tools to address it. So tariffs are that backdoor way, that's sneaky. You could say sly way that Trump and the Republicans are levying the equivalent of a VAT on the U.S. population and making the Americans think that foreigners will pay for it, not for them. That's the political genius of this. And why tariffs aren't just a

bug, they're a feature of two key parts of the U.S. economy, getting the deficit under control and raising revenue in a political environment that does not allow you to raise taxes. So look, who is going to pay for this? Yeah, the consumers in the United States are going to pay for this. And by the way, who's going to be, experience the biggest proportional that increase? It's always the lower classes and the lower middle class because they just spend more of their money on disposable stuff because they have to. They have no choice. Since the regressive tax, which, by the way, is going to hurt the people who voted for him. Secondly, who else is going to pay for it? You and I are going to pay for it.

Let's be honest. We're not going to pay for it in the way the Trump thinks we're going to pay for it. But we're going to pay for it because the goals are so mixed. The message she's sending is move your factory to the United States. Okay, General Motors. Okay, Toyota. Take your factory out of Oshawa or take your production line out of Windsor. Just move it across the border and pretend you're the 51st state.

and put your factory in the United States, and you won't have to worry about this. So who's going to pay for that? Canadians. And that's right. We're going to do exactly what they want, which is relocate production and create jobs in the United States. Honda just announced a new billion-dollar plant in Indiana.

They're not building that in southern Ontario. That's right. A lot of our big battery manufacturers that we put $50 billion of taxpayer subsidies into, are now either going bankrupt or canceling their production lines because Trump has rolled back the, again, very expensive, deficit-financed electric vehicle subsidies, which propped up this whole industry, which maybe didn't ever really exist.

There was no consumer demand for it. Okay, but big picture, Rudyard, here's the strategy. Make everybody poor by sucking up jobs behind the tariff wall. I don't give a damn about you. I don't give a damn about anybody else. That's what America first really means. So let's suck up all the manufacturing that still exists in the rich world, in the developed world.

Let's put it all in the United States. But, Janice, do you really actually blame them for that? I mean, they have their backs to a wall. They have a trillion-dollar deficit. They have massive political problems where they don't have the revenue tools to address what is a coming financial and debt. crisis. Cliff.

I mean, we've all been talking about this for a long time, right? That the United States lives by exporting its finance problem to the rest of us. But here's why I do blame them for this. This is dysfunctional political system. Okay, with entrenched interests that are doing what they always do. They are exporting their adjustment problem to us. Now, why is this going to backfire on them? Because most of the advanced manufacturing that can survive in the developed world,

because we both agree manufacturing toys and clothes is not going to do it for anybody in Europe or North America. So the advanced manufacturing, if you actually look at it, Rudyard, doesn't occur only in the United States. It occurs in supply chains that run through the developed world. the whole semiconductor industry, for instance, which is a big hardware industry. It's partly in the United States. It's partly in Japan. It's partly in Amsterdam.

It's packaged in Canada. You bust all this stuff up. And that's what he's going to do. He's going to impoverish everybody else. And he's not going to succeed in his goal of reviving advanced manufacturing. This is make everybody for in the next five to ten years. Yeah, I just, I think we agree, though. You can't blame them for being self-interested.

We're self-interested. Everybody's self-interested. And they're not, this isn't the America of the 1950s, you know, astride the world like a global colossus economically, financially, and militarily. This is an America, you know, challenged by China in a significant way, basically broke. It's now spending more on debt financing than it's military. That's, you know, Nile Ferguson's so-called Ferguson. law, which historically predicts the end of an empire, an end of an era. And they have, yes, a dysfunctional political culture.

We can't deal with that. They have to work within it. And I don't know. I just, we can hope that the world was different. You're usually the realist on this program. But this is the world that we have. And they're going to behave the way they're going to behave. Listen, Roger, I'll tell you why they're not self-interested.

If I thought their strategy would work, I would say, okay. But it's going to fail. That's my point. It's going to fail because the kind of... Maybe it's the least bad strategy. Given the political realities, the financial realities, the geopolitical realities, maybe it's the least bad strategy. I don't think so because I don't think they can succeed as an advanced manufacturer

behind tariff walls, Richard. I really don't. They may be able to get some battery plants back. They may be able to get some car manufacturing back when they bust up an integrated auto sector. But in almost all the other advanced manufacturing, they can't know. Well, I mean, Taiwan's leading superconductor, you know, microchip company just announced a $100 billion investment to move their highest end, their best fabs into the U.S. So I don't know, Janice. Maybe you're right.

We're going to see. But let's take a break right now because we're going to come back on the other side of the show with our monk donors. Thank you again for all those people that made their valuable contributions to our work this week. And we're going to talk Canada. We got a new prime minister getting sworn in as of today. Mark Carney. What happens next? We could be in an election supposedly within a week to 10 days here in Canada.

consequential historic election coming down the pipe, we're going to unpack it all after this short break. 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. Click on the Friday Focus tab in our navigation on the top right of the site. Make a donation as little as $25 a year of $50. cents an episode and we'll send you not only the full-length editions of each and every Friday Focus podcast, but all kinds of special offers, perks, access to events, and additional content. Again, you can do that right now by becoming a donor to the Monk Debates,

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