The Munk Debates Podcast - Munk Dialogue with Andrew Coyne: how far is Carney willing to bend for Trump?

Episode Date: August 21, 2026

Rudyard and Andrew unpack leaks from ongoing U.S.-Canada trade talks, which are focused only on the immediate threat of 50% tariffs on Canadian goods rather than negotiating a long-term deal. Even if Canada averts some of these tariffs, CUSMA negotiations lie ahead—and the leaks suggest we may not get full tariff relief on the issues that matter most, including steel, autos, software and lumber, while facing additional concessions on dairy supply management and digital policy.How are these concessions consistent with Carney’s “elbows up” message? Andrew argues that trying to appease Trump risks feeding his appetite for further concessions. This isn’t a negotiation; it’s extortion. If the Trump administration continues to approach trade this way, Canada needs to mitigate this ongoing threat by becoming a more competitive market and diversifying trade.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.

So to make any kind of lasting concession that really touches on our sovereignty in return for such meager, if any, gains that even then can't be counted upon is very, very dangerous stuff because once it's gone, it's very hard to get it back. Welcome to our latest monk dialogue with journalist Andrew Coyne. Today, Friday, the 21st of August. And are great to be in conversation with you as we barrel towards a supposed. a deadline in the latest round of trade talks with the United States. Andrew, some seeming leaks out today of various sorts. Again, everything to be confirmed. What are you hearing and what do you make of possibly some of the features of this deal still TBD as of recording this afternoon the 21st of August? Well, I certainly don't have any pipeline to the people in the room there. The leaks have been few and far between, but obviously deliberate,

where they're coming from for what purpose is always interesting in these things. But, you know, there's been a lot of towing and froing between, what was it, Tuesday night or Wednesday morning when we were told there was some sort of, you know, quasi-deal, and it was all just a matter of nailing down the particular. Well, we're now three days coming on later. We still don't know how to deal. We just have a bunch of leaks. it's entirely possible, just as August 19th proved not to be the deadline.

It's entirely possible that this one, the three days after August 19th, will prove not to be the deadline. That's the nature of these things often is the case. I think what's really important for people to understand is this isn't the deal. This is not renegotiating Kuzma or whatever you want to call the free trade agreement. This is just about the 50% tariff that Trump was threatening to put on on about $20 billion of U.S. of our goods come August 19th. We've been scrambling to try to offer concessions to avert that and, B, get the U.S. administration to remove some or all of the tariffs they put on a year ago under a different section of U.S. trade law. But even if we're successful, put those, that word in quotes, in doing those things, we still have the whole Kuzma negotiations ahead of us. And not only do we have one set of negotiations to do with that,

but because, as I understand it, because we did not come to an agreement as of July the first, we're into negotiations every year now on this. So welcome to our future. This is, this is not some one-and-done thing where we make a tidy package of concessions. The concessions sometimes aren't really concessions. Those are the more normal types of trade negotiations. This isn't one of those things where we make a few concessions and they make a few concessions and then we go back to business. This is the beginning of, or we're midway through the process of continuing to make

concessions, at least that's one possible strategy for it, of continuing to make concessions to try to stave off the beast and try and prevent it from devouring us whole. So it's not a particularly pleasant prospect, but I think people really need to understand this that for all the hoopla and the hype that surrounded this, if we come out of this with some sort of deal, it will be a deal just on those matters and not on the larger trade relationship between the two countries.

Yeah, that's such an important point to underline. We are hearing, though, Andrew, it seems like a deal that will involve, if it does go ahead, as you say, to deal with the specific situation that we find herself in, the threat of these new 50% tariffs levied on a small percentage of exports not currently covered by Kuzma. It seems that, as one might expect, as unfortunately, due to the asymmetrical relationship, economic and otherwise between Canada, the United States, that we will not be getting anything close to full tariff relief on any of the files that we care about, from steel to autos,

you know, go down the list, softwood lumber. And instead, if we are to believe James and Greer, the U.S. Special Trade Representative, we will make additional concessions related to some issues that you and I would agree on. It would be great to take a broom out and sweep away a lot of the encumbrances, let's say, of supply management related to dairy. But then also on digital policy. The administration seems to be saying that Canada is going to make a series of concessions to basically harmonize our policies related to aspects of AI, digital streaming, online harms, the beloved Canada News Act.

I say that with a lot of irony. What do you make of this, Andrew? I mean, it seems to be what we are. always suspected, it just seems incongruent maybe with the last six to eight, 12 months of Canadian kind of chest thumping, of elbows up, of God damn it. I'm not going to buy a, you know, a single bottle of Kentucky bourbon now or into the next century. Well, there's two difficulties that any Canadian government face with this. One is the U.S. is much bigger than we are. We rely on them much more than they rely on us. So we're in a

weaker bargaining position. And point two is, we have a president of the United States who's out of his mind and who's not a rational actor. He's not, we've talked about this before, you can't really deter him in conventional terms and you can't really appease him in conventional terms. It's certainly a bad idea to try to appease him for the same reason it's usually a bad idea to appease anybody that you're simply feeding the appetite for more. And that, to the extent that he's a rational actor, that is certainly something you have to be concerned about.

But the alternate strategy of trying to deter him, of trying to fight back, doesn't necessarily work either. Because he's not any normal president at 30-something percent in the polls, heading into midterms, would be doing whatever he can to try to solve irritants, get files off of his desk. You certainly wouldn't be looking at things like raising import prices for consumers. So none of this makes any sense from any normal standpoint. To come back to the point I was making earlier, you really have to look at this set of talks as part of a larger game in which you have very limited instrumentality. You are trying to perhaps slow down the progress of American tariffs. You're trying to put sand in the gears, if you will.

You're planning for time in the sense that the weaker Trump gets politically that may, to some extent, constrain his options. So you're trying to slow things down. Maybe you're also trying to show or should be trying to show that we can take pain, that we're not coercible, that you can make threats to us, and we will not jump and dance in response to that. whether that involves applying counter-tariffs or just refusing to do what the Americans tell us to do, some combination of those two. But there has to be, I think, some demonstration of that. The third thing is, if you are thinking about making concessions as part of this game, you've got to be thinking about the long run, not just what are we doing in this particular round of it,

but what are we keeping in reserve for playing later? So you and I would both agree, I would be more than happy if supply management even was weakened. I don't believe that it will ever be actually gotten rid of. But if it was even weakened, it would be, I would be most pleased. But from the larger strategic perspective, don't give up anything until you absolutely have to. So one of the concerns in this round is how much are we giving up to get very little? I suspect we're not going to wind up giving up very much in this round. That will be my optimistic thing is I think we're going to give up little to get little.

I think they're trying to contain how much they're giving up in this agreement. And most of what's been talked about, at least in terms of leak. Now, much more may turn out to be on the table than we were told. But most of the stuff we're talking about is removing tariffs that we had put on as retaliation to theirs, putting the alcohol back on the shelves that we had taken off as a retaliation. to remove. So to the extent that it's simply unwinding retaliatory actions that we'd already taken and they were removing some of some of theirs, then we're not getting everything we want it, but we're getting something. But again, if this is part of a larger game where they simply

keep coming back for more, keep demanding more, keep applying more tariffs, then that changes everything. And what really bedevils this is, again, to the extent that there's right, national actors in the White House, there is an announced strategy, national security and foreign policy strategy of dominance in the Western Hemisphere. And there's an announced way of approaching that way, which is they're going to use economic levers and trade talks to try to achieve that dominance. So this isn't like a normal free trade talks or even trade talks where it's about the economy. It's about particular sectors. It's about, oh, I've got a sensitive political sector. You've got a sensitive political spectrum.

We'll agree to keep them off the table, but let's talk about what we can do together to cooperate and succeed together. This is about one party trying to use trade as a weapon. Yeah. And that's just, you can't analyze that through any normal trade negotiation lens. And further to that point, I mean, again, if these leaks are true, you know, Canada will agree to buy its, quota of F-35 says its contribution to the, again, I think somewhat preposterous golden dome obsession of the president vis-à-vis missile defense for the entire continental United States and that they would get first cut first divvy on critical minerals from Canada. So I guess we

would not enjoy an open market price for those. We would have, you know, a sole bidder and we would be a a price taker, not a price maker. These are the very worrisome things is where the concessions, quote, unquote, what you're making aren't to do with tariffs and aren't to do with supply management. They're not to do with bad economic policies that, you know, we should really want to get rid of. These are things that really do affect our sovereignty and our ability to carve out our own path in the world. and it's a bad idea to give those up as a general principle. Maybe you might make concessions on those if you thought you were going to make major gains in return.

But A, they've made no offers that we've heard of of any serious gains for Canada. The only offer, quote unquote, they've made is to reduce the unjust illegal tariffs they put on us. So they've made no offers. And B, as we've discussed many times, we can have no. confidence whatsoever that any offers they did make would last. So to make any kind of lasting concession that really touches on our sovereignty in return for such meager, if any, gains that even then can't be counted upon is very, very dangerous stuff because once it's gone, it's very hard to get it back. So again, this just tells you how strange and unusual the situation that we

find ourselves in. Yeah, I think that's a really interesting way to kind of think this through, that there are, you know, concessions that you might make on trade, but then there are other concessions, as you say, evoke questions of sovereignty. And again, maybe you and me as fellow travelers in many ways, Andrew, you know, are not fans of the Digital Streaming Act or the Online News Act or even the Online Harm Act or maybe the idea that social media, you know, shouldn't be available to people under the age of. 16. But the point is that I guess if you are a country, if you are a polity and you have a democracy and you have a government that's elected, it can and should have views on important issues that affect all of us in the digital realm from AI through social media through to data storage and collection. I mean, these are now, you know, the the utilities of the 20. century. There's important, you know, is drinking water and an effective sewage system. So if indeed we are going to, in the words of James and Greer, kind of harmonize our digital policies vis-a-vis American preferences with the White House that has been captured by Big Tech and big tech's big dollars that went into Trump's reelection bid, specifically through Elon Musk,

Again, I might be preferential to some of the abolishment of aspects of current digital policy in Canada and a different approach, but that's just my view. I guess what I'm worried about here, Andrew, as a Canadian as a citizen of this polity, is the extent to which we are renouncing sovereignty. Yeah. Now, look, any trade negotiation to some extent involves a loss of sovereignty. it's a question of degree. So you could say, we're not going to give up our tariffs. That's part of our sovereignty.

And we had these debates in Canada 40 years ago during the Canada U.S., the first Canada U.S. Retroated Agreement about how much was too much. What is the normal type of sovereignty exchange that you might make in trade talks and what is something more out normal? Now, that's been changing over the decades as well.

You know, the World Trade Organization, used to be called the general agreement on tariffs and trade. And for many years after World War II, it was mostly about tariffs. In recent decades, it's plunged into more into things like subsidy regimes and the use of non-tariff barriers like regulations. And that's fair enough, as long as everybody kind of trusts each other, that that's what they're willing, that that's what this is about, that these are about trying to remove disguised trade barriers rather than

messing around with other country's sovereignty. And of course, it's much easier when it's a multilateral type of arrangement to have that kind of level of trust, that you're not dealing with a smaller partner up against a larger partner. How can there be any trust in this situation? When the president has announced that he would like to make us the 51st state, when he has talked about annexing us, using economic force. And how do you even call this negotiation? and we had this discussion, I think, last week is, you know, a negotiation normally means, I've got something that you would like and you've got something I would like and let's exchange. Let's exchange to our mutual benefit.

Let's each put something on the table that we're giving up that we hope to get, etc. This isn't that. This is extortion. This is the local Mafia Don has threatened us and said, do what I say or we're going to slap on these massive tariffs on you. You know, nice economy you got there. Pity, if anything, should happen to it. That's not a negotiation. That's just, you know, we're basically ransom demands. And the only question is, how far do we pay ransom? And it's not usually a good idea to pay ransom. It may be sometimes it's a good idea to keep the

kidnapper on the line and keep them talking. And so the negotiations, and so the negotiations, have some purpose in that sense of trying to stall and stave things off and try to probe for weaknesses and try to form alliances and build time to make bridges to other trading partners and increase our trade with all those countries. But of course, we're not going to be able to do huge amounts of that in the short time that we have. But all these things kind of fit together. But I just want to stress this point. This is not a normal negotiation in so many different way. One of which is it's basically an extortion demand. Just to play counterfactual, what if we had approached these threats as we approached the past threats by this president with targeted countervailing duties? I mean, you and I discussed this before. In an interesting way, while it's a slightly kooka-mimi policy, the extraction of U.S. booze from a lot of provincial liquor stores has seemingly had a disproportionate effect on the administration and its thinking, and it's now a consistent. that we can, a relatively harmless concession that we can return to extract from the United States, better behavior, hopefully, you know, better terms on other issues that we care about. So we don't know. We don't know if this, as you say, this agreement will be days in the making,

if it will come to fruition. It seems, though, that it's the direction of travel that this government and prime minister wants based on his briefing and premiers. And that's probably where a lot of the leaks are coming from right now. So Andrew, what about that counterfactual? What if we had approached this latest wave of tariffs with a different attitude, an attitude, which was we can't trust this person? This is simply chipping away at us. This is one of a series of negotiations.

Come and talk to us when you actually are serious about dealing with our issues in ways that we think are reasonable. And again, I find the Iranian regime abhorrent to everything about them. But in an interesting way, they've proved a kind of fact set related to their war with the United States and the Straits of Hermuz, which is that Trump is any bully, respect strength. It's undeniable that the Ukrainians also have stared down threats and intimidation from Vladimir Putin, but the Iranians have done that too. and they have shown Trump effectively a backbone and a resiliency that he catastrophically underestimated.

And as a result, they're extracting real concessions from him. Yeah. Well, it would help if we had some equivalent to the Strait of Hormuz. So, yeah, I mean, I'm all in favor of that in principle. I'm skeptical of its efficacy in the situation that we actually find ourselves in. What about NORAD, Andrew? What about David Frum's nuclear option? of withdrawing from NORAD, threatening the withdrawal of NORAD if the United States does not

show some decency in these talks? I wouldn't rule that out. I would simply say, have we gamed through where that leads and what do we actually achieve by it? So the difficulty, as I say, is I think Trump is hard to appease and he's hard to deter. And he's very hard to calculate. One of the benefits during the cold war was the Americans and the Soviets were very different systems of government, but they were all reasonably rational people. And you could game out how to map out a deterrence theory that would be stable. That if the Soviets do this, then we do this, and then they will do this, and then we will do this. And it was a relatively predictable phenomenon. It nearly blew up the world during the

Cuban-Metal crisis. But for the most part, it was a relatively predictable phenomenon. It nearly blew up the world during the Cuban missile crisis, but for the most part, it was something fairly predictable. With somebody as crazy as Trump, I do think you have to be factoring in that in terms of what would be the possible responses. As I mentioned, I think there's some benefits to some show of force and bravado purely to demonstrate, I suppose it's a version of the madman theory of negotiation, is to show that we're willing to take pain. So maybe somewhat bog with the first point. But I think, that has to be part of the mix is we have to show that we're tough, ordinary customers. And certainly we have a couple of benefits in that regard.

Our public opinion certainly seems to be in that mood. And the provinces, you know, they are independent actors to some extent when it comes to things like the alcohol. And that gives you a kind of a good cop, bad cop, potential game there. But I come back to this point of I'm not opposed to. to those kinds of actions. I have some reason to doubt how effective they would be. So if there's not much you can do to appease them

and there's not much you can do to deter them, then I think the other option is you just let what happens happens. If they're determined to put these tariffs on and there's nothing we can do about it, then let's try to mitigate its effects. Let's try to make ourselves the most competitive economy we possibly can.

So that you will still want to locate a plant in Canada even in the face of those tariffs. If there's not much we can really do, if they're just going to do them, which it seems to be the case, then rather than either A, making a bunch of concessions in a fruitless attempt to try to prevent them from doing it, or B, getting into an escalating trade war that may go to places that we don't want it to go, I mean, there can be elements of both those strategies. but to me the largest part is just hunker down and figure out ways to survive, even in the face of a crazy president. Yeah. Yeah, God, it's, I don't like to bring this up. But we had J.D. Vance, you know, in the last 24 hours, literally kind of trolling the prime minister saying that, you know, he comes in and I, quote,

puffs his chest out and says, I'm going to out Trump, out tough Donald. And, quote, it's hilarious. because Carney presents this as some victory for when Canadians, for Canadians fundamentally, but they climb down on a lot of issues. You know, it's not even, yeah. Yeah, so there's no grace here, Andrew. No, no.

There's one other point I was going to make on the retaliation thing is, the biggest things that we could do to the states on things like, you know, holding back exports of oil and gas or potash or, you know, these kinds of export tax strategies have very unfortunate impacts within Canada in terms of national unity. That's unfortunately a weakness in this country. And I just think we have to acknowledge that. It's not a credible threat.

We can't actually do that and keep the country in an obscene state. So I think we have to be realistic about what kind of pain we can actually impose on them. But what's very clear to me is that we can sustain pain ourselves. And that is part of making yourself uncoercible. Part of it is strategic things like making your infrastructure more, you know, less easy to interfere with, having more options when it comes to trade. Pierre Pollyere likes to talk about having more leverage. Okay, great.

Again, show me where we actually have that leverage, but I'm not opposed to exploring whatever options we can on that. But that should be your general strategy has to be make yourself uncorcible. That means preparing public opinion so that it can endure whatever the Americans throw at us. It means, as they, giving yourselves options. it means making yourself a harder target. All these things are important. But be realistic about how much you can actually either bribe or threaten the American president

because, A, it's the United States of America, and B, he's not a rational actor. Yeah. Yeah, and look, heaven forbid that, as you say, showing pain, the ability to absorb pain and you just think of what Ukraine is going through, you know, right now with overnight, daily missile attacks. In some cases, you know, dozens of fatalities. And that's just civilians, not what's happening on the battlefield. So last word to you, Andrew, but it's, you know, I think context is, context is important here.

Like, we are, you know, we're facing a threat here. And thankfully, we haven't had to pay a. butcher's bill like the type that's been leveled on Ukraine. But Ukraine should be an example of just how far, how precious sovereignty is, how precious autonomy is, independence. And the willingness in that case of a culture to not only suffer under the predations of Vladimir Putin, but punch back now in a remarkable way. So I don't know, I kind of say to Canadians who are going a whinge about all this and kind of twist ourselves into knots. I mean, look at the rest of the world. Look what other nations and countries are dealing with when it comes to threats to their

fundamental way of life. And what? We're just, you know, we're going to kind of worry about what the TSX is closing at on Friday the 21st of August. Yeah. I mean, look, depending on how bad the tariffs get, it can impose economic costs and we can survive that. So yeah, we're not facing an existential to win in that sense. And look, if he really put on not the 50% on 20 billion dollars of our goods, but if he put on sort of across the board tariffs, first impact of that would be to drive the dollar down. And the dollar is part of our strategy, if you will, that that makes our exports more competitive. It comes at a cost in that everything costs more here,

so it's like a national wage cut. But it also means you're able to compete even in the face of tariffs. But as I mentioned earlier, there's a lot more you can do besides just taking the strain through dollar depreciation. There's a lot more you can do to make yourself more productive that we are masters of our own house on doing. You know, radical tax reform, radical competition reform,

a bonfire of the subsidies that we hand out to every business, large or small in the country, making ourselves hyper-competitive, hyper-productive. That's been an imperative even before this. We've been losing ground to every developed economy over the last 30, 40, 50 years, you know, because of our sluggish productivity growth. And we've been relying on either high commodity prices or high labor force growth, and neither of those are really going to be a hay. available to help us. So we really need to, we've already, before all this, needed to make a high,

high priority, top priority of raising our national productivity. But now with the Trump threat, it's become a national security strategy. We have to be more productive to be able to withstand what Trump is throwing at us and not pay as high price in our standard of living as we might otherwise. So to keep battling forward in the face of these Trumpian headwinds, we need to have a much, much stronger, you know, bedrock rate of productivity growth and economic growth. Yeah. Well, Andrew, thank you for finding some time for us on what, no doubt, is a busy Friday afternoon as you were writing and thinking about these tariffs for your excellent columns at the Golden Mail. I'm glad to note for viewers of this podcast that you have followed my instruction and put a copy of your best-selling book,

the crisis of Canadian democracy back over your right shoulder. That was missing last week, Andrew. That's like 101 for authors. I mean, no, I slipped there, Roger, and you called me on it. Okay, well, I'm glad I didn't have to call your publisher. Ladies and gentlemen, check out Andrew's best-selling book. We'll put a link in the show notes and we'll catch up with you again next Friday, Andrew.

So much for the dog days of summer. You and I are not getting a break here. The news is big, momentous, meaty, and it's been a, a real pleasure to chew it over with you this last half hour. Very good. Thank you. Bye-bye. The Monk debates are a project of the Aurea and Peter and Melanie Monk Charitable Foundations. Rudyard Griffiths and Ricky Gerwitz are the producers.

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