The Munk Debates Podcast - Friday Focus: Trump's tariff plan and Canada's soaring debt

Episode Date: December 13, 2024

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. The following is a sample of the Munk Debates' weekly current affairs podcast, Friday Focus. Rudyard and Janice begin today's show reflecting on Justin Trudeau's relationship with the Trump administration. Why would he make public statements that provoke ire from our southern neighbours? And how should Trudeau respond to Trump's plan to impose tariffs on Canadians goods? In the second half of the show Rudyard and Janice talk about the grim financial outlook for Canada. With a ballooning debt how is the government going to be able to provide important services to Canadians? And how will government spending and employment growth coming primarily from the public sector handicap Canada's efforts to grow the economy? Some strong fiscal medicine might be what is required to remind us that we need to change course or risk a financial crisis. To access full-length editions of 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 13th of December, 24. I'm Roger Griffiths, the chair of the Monk Debates. I'm joined by Janice, Stein, the founding director of the Monk School of Global Affairs. Well, Janice, another action-packed week.

So much to discuss, but I got to start by getting your thoughts on what we've seen in terms of that kind of social media tit for tat between President Trump, Elon Musk, Prime Minister Justin Trudeau, Doug Ford, nipping and sniping away at the sidelines. What are we to make of all this? Is this diplomacy in the 21st century or is this, I don't know, politicians behaving badly? It's probably a bit of both here, Roger. And it would be interesting to take us down a rabbit hole of the new culture where we do public baiting of each other, political leaders on social media. We have a lot of fun with that. And I have to say, although this is a very serious subject, there was something humorous about

Doug Ford saying, well, let's not get too worked out that he called him governor. He's thinking about him at 12 o'clock at night. I'm not. So that must mean there's some kind of relationships there. Aren't Doug Ford's better moments, frankly, but it was genuinely fun. a little bit of levity for sure. On a more maybe serious sense, the stand-of-side was the back and forth between Elon Musk and Prime Minister Justin Trudeau, Justin Trudeau giving a speech to a woman's rights charity called Equal Voice,

where he seemed to kind of indicate that if it wasn't preferable that Kamala Harris had been elected, president over Donald Trump, it was a statement or a kind of judgment, her non-election on the part of Americans and their willingness to accept women as political leaders. Elon Musk triggered by this, calling the Prime Minister a moron. Again, Janice, I just wonder why, from Canada's perspective, leaving Elon Musk out of this for now, why we wouldn't kind of just keep quiet, keep our head down, work away on no doubt the important bilateral lobbying that's going on behind the scenes. I'm kind of surprised to see so much of this out in the open.

and so much of it out in public. And I think some building animosity, it seems, between the two sides. You know, the late great Alan Gottliep, who among other things, was our ambassador in Washington, said over and over again, we do best when we stay below the radar.

And he is absolutely right. That was an injudicious comment by true. You know, he had gotten on the plane. He had taken his team to Mar-a-Lago. And I was in Washington for the last couple days, and what I did hear back is the meeting went very well. It was a cordial meeting. Some good bilateral discussions are taking place coming out of that meeting. So don't make a comment about the president, Alex, opponent.

at this time. That introduces a political note into it. And of course, it got attention. Of course it did. So stay below the radar is the best advice that we can give as we navigate. What really, right here is an issue with very serious stakes for the Canadian economy. This is a big and important issue. So 25% tariffs would, we are already in a recession, so let's just multiply the impact. We actually get that on January the 20th. But, Janice, is the politics just too juicy too good? I mean, Donald Trump is a foil for everybody and anything. And to what extent can this prime minister are facing, you know, some pretty challenging poll numbers,

polling in the high teens versus peer polio of over 40 percent, to what extent is it even fair to expect an embattled prime minister not to try to squeeze the lemon, to try to get a little juice here on the basis of the fact that this president is not simply unpopular with Canadians. scares the pants off a lot of them. Sure does. And I don't think if we pull the record, most Canadians would have a very good opinion at John. But look, this is a prime minister who's, to put in the most possible language that I can in facing an uphill battle for re-election. And he has just a little bit of time to decide what he's going to run on. So is he going to run? Is he going to be the prime minister

that brings home the deal, avoids these crushing 25% tariffs, and runs on a campaign that's based on, I'm your man to deal with Donald Trump. I got it done. Real like me. Trust me. I know what I'm doing.

Or is he going to be the prime minister that's going to take on Donald Trump? As, by the way, the Mexicans, our glorious shine bomb came out of the gate swinging. And is he going to run on? I am the man who will stand tall. We will not capitulate to Donald Trump under my leadership. And I know what I'm doing.

Trust me. You know, both are possible narratives. I don't think he's made a decision yet. But from my perspective, Roger, if we're going to get to January 21st without tariffs, we can't afford any kind of name. calling, we need to stay below the radar. And we need to put a package on the table, which is there but expensive. It's an expensive package to put on the table and give the president a win from the first day he steps into the White House. But just to play devil's advocate, I mean, I think a lot of

people are starting to internalize something we've been writing about at the hub for the last 10 days or so that some tariffs most likely are inevitable. At this time, there is no, collect $200 as you pass go. So from the calculation of the prime minister, if you have a pretty high certainty that he will impose tariffs on Canada by executive order on the 20th of January or shortly thereafter,

why not set yourself up now for a more oppositional stance? Because two reasons. One, you know, the old adage, you bully a bully. You don't create a situation where you look like you're ready to roll over because, you know, in the school yard, you're handing out $2 bills to everybody not to beat you up during the lunch hour. Second, this is popular that if Trudeau come, if Trudeau is faced with tariffs, I think a lot of Canadians could rally around the flag. they could say, look, this is, what have we done to deserve this?

We're good neighbors. Yes, we could have spent more in defense, but are we really a source for large drug importation into the United States? No. Are we really, you know, a security risk in the way that the kind of uncontrolled migration across the border in the Biden years arguably could and maybe will be a security risk for the United States? No.

So why not start to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, to, flex a bit here. Maybe is that what we're seeing? You know, I think that's exactly the line of reasoning, Roger, that's going on. You know, the bully, the bully argument. I was in a public conversation this last week with Steve Verho. Steve Verhoel is our most experienced trade negotiator. He did the renewal of NAFTA, too, Kuzma. And he is so experienced. and really smart. And he made the same argument, but just a little differently, he said, look, you cannot start by making a concession to Donald Trump.

You have to start tough because he only respects tough people. And only after you've established your reputation for toughness, can you put the package on the table? Now, that's not where I am, and it's not where I am because we have a very short, time until January the 20th. And I'm still not 100% sure that we can't avoid anything but a very minimal outcome. But what I am sure is being tough is not talking about the fact that the United States didn't elect a woman yet. Being tough is talking about what we're going to retaliate and we are not a security threat.

And yes, we will fix our border and we will own the problem to. except that we have it, but we have stuff that you need, Mr. President, like our oil and gas. And if you want Americans shivering in February, you go ahead. That's standing tough. So I think you have to be very careful not to taunt this guy, not to humiliate him on anything that is a sore spot for him. And what we know about Donald Trump, the size of his majority really matters. So I don't think that comment was well advised. Those were not the grounds to show your frustration. No, it really is a dilemma because you're right.

He can be easily antagonized. And to me, that's why tariffs are so dangerous. And I think the first period of the coming year is going to be, a precarious moment for Canada for the world in terms of tariffs. Because if Trump is seen to capitulate to other countries' threats of retaliation, then his whole image of tough guy, of someone who's who's coming in and reasserting the primacy of America, literally America first, kind of goes out the window. So the very fact that they even announced these tariffs, the 25% for Canada, 25% for Mexico, roughly the same for China, suggests to me, like, there's going to be a lot of brinksmanship

before this is over. And I really struggle, Janice, to square the circle on how Trump capitulates on these things, persona embedded in this idea that, you know, he will take from others, you know, what America has lost. deserved in terms of chattels and goods. And I just don't think we're going to get away here without a sizable pound of flesh. Maybe it won't come in the form ultimately of longstanding tariffs. Maybe it'll come the form of much higher defense spending, where we have to buy a lot of American military equipment, or maybe it'll take the form of much greater American access to our economy for its airlines, its banks, its telecommunications companies. I just don't think

he's going to let tariffs go and then not ask for anything in return. You know, I agree with you. I think there's a cost. There's a cost for everything with Trump. There's a price you pay. But it really does matter what the price is, Roger. So after Moralago, there were a couple of leaks conversations that he had with people in which she said, well, that was just to get them going.

They've got to fix that border in order to avoid these tariffs. It was a little bit of mixed messaging coming out in the immediate aftermath. And I think you'd be the first one to say, look, if there's a demand and supply management to give banks greater access, U.S. banks, greater access to Canada, you probably say it's a good thing for the Canadian economy because we get at some monopolies and near monopolies that we have in this country. And it can actually be good for growth. But there's no good story on 25% tariffs. It's all bad. And so I think part of the strategy has to be do your utmost. We're talking about a short time here.

We're talking about six weeks. I didn't do the math correctly. We're the 13th year, but I'm roughly in the zone. Avoid those that 25% tariffs, which once you put it on, is hard. to get off because they stick. They're sticky. And they're hard to get off and put other stuff on the table that might be much better for our economy and still give them a win. But put on the table a package that would be much better for our economy than what this is. Well, let's take a quick break. We'll say goodbye to our complimentary listeners, join our monk supporters, curators, and donors on the

other side of this short break. We are going to to take up the question of the economy. There's some big action this last week with new employment numbers out, a huge rate cut by the Bank of Canada. And more importantly, this coming Monday indicators pointing to a long, awaited fiscal update could show that the Canadian government, the federal government, has blown through its deficit estimates for its last fiscal year. is this the harbinger of a tough moment for the Canadian economy to come?

We've got that for you right after this 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.w.The monkdebates.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 at Triple W Monk Debates, MUNK, DebateswithanS.com.