The Munk Debates Podcast - Munk Dialogue with Andrew Coyne: the Canada-US trade deadline looms and Iran calls Trump's bluff

Episode Date: August 14, 2026

August 19 is fast approaching, and despite efforts to reach a deal, there is a real possibility that negotiations could collapse altogether. Do Canadian concessions actually reduce threats from Trump, or simply invite more demands? And if Trump agrees to a deal, will he renege later and demand more? Andrew argues that “ragging the puck”—stretching negotiations out as long as possible—may be Canada’s best strategy. The discussion also turns to Canada’s dairy subsidy and protection system: does protecting domestic dairy producers actually serve Canadian farmers, when it leaves Canadian consumers paying up to twice as much for dairy products?In the second half of the show, Rudyard and Andrew turn to the continuing standoff over the Strait of Hormuz. How long can the crisis last? The United States appears trapped in a conflict it cannot easily walk away from. Iran is now the side issuing demands, while making a mockery of Trump’s threats and exposing the limits of American power. The damage isn’t just military—it has undermined the credibility of U.S. threats and security guarantees to its allies, which may prove even more consequential.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 thing that the Canadians always have to be bearing in mind is, first of all, if you make concessions in this in the face of this threat, does it actually alleviate the threat or does it just incentivize further threats? Secondly, if you get a deal by making the concessions, does this deal actually stick? Or does he just renege on it, impose tariffs later with some new demand? Welcome to our regular Friday Monk Dialogues with Globe and Mail. journalist Andrew Coyne. Andrew, great to be in conversation with you. Dog days of summer. You're just back from walking your pooches in the park. So we appreciate you finding some time with us on

this Friday afternoon, the 14th of August. Let's catch up on the trade file, Andrew. We had a lot of interest in your comments last week. Over 80,000 views of your video with us on YouTube. So clearly Canadians are anxious about this dead. the 19th of August next week. Andrew, do deadlines matter to this president? How should the Canadian government think about a deadline? What's going on? Well, do deadlines ever matter?

You know, I remember when I was just starting, I was a journalist writing about a labor negotiation. And, you know, the union leaders, the management, they all said, you know, oh, if we don't get a deal by midnight tonight, we're going out on strike. them out, whatever. And credulously, you know, I wrote down, you know, it looks like they're going out on strike. And, of course, two minutes to midnight, they get a deal. So there's always a lot of

posturing in these things. People are always threatening doomsday. And, you know, it's never really clear that that's necessarily going to happen. There's a lot of negotiating through the media that goes on in any negotiating like negotiation like this, where politics is involved particularly. And oftentimes not only do they, either they strike a deal when they were both bowing and there's no deal to be had, or they just agree to keep talking and they go, they blow through the deadline. They've done this already. Remember July 1st was supposed to be a deadline of some kind. So it wouldn't surprise me at all if, you know, come August 19th, there's some kind of agreement to keep talking but no actual agreement. So that's one, certainly one possible.

look. Now it's also possible that things fall off a cliff and, you know, we get no deal and in fact, everything falls apart. That's not inconceivable. And the third possibility obviously is that we actually get some kind of deal, although, as I think you're suggesting, a deal with Donald Trump is never necessarily a deal or probably is necessarily never a deal. So, and you've seen varieties of these messages all being leaked to the press. So there was a story came out that said, said, yeah, the Canadian government is really looking seriously at walking away from the table and letting the whole thing collapse. And you also saw a story or stories saying the Canadian government is prepared to make all kinds of concessions to get a deal. And I would take all of

these things with an enormous grain of salt. I've seen people rushing into print to write articles about how we're making some massive surrender of our sovereignty. And maybe, but I just think that's a little premature until we see what actually happens in this agreement. The other thing you're seeing, and I predicted this, not that it was very hard to predict, but there had been stories leaked about how the prime minister or his representatives have been telling the Americans, we don't have a lot of room to negotiate here. If we give you X or Y, or if you impose this tariffs, public opinion will be so inflamed in Canada that we won't be able to do anything further. I think that's probably true. I think they're also trying to make it a little more true by

leaking it and they're certainly trying to impress that upon the Americans. Yeah, well, are good. Does the president get some credit though with this deadline? Because it has seemed, Andrew, that it had re-accelerated the talks over the last number of weeks. And do you see that as maybe, I don't know, a mistake on the part of the government? Why did we suddenly kind of jump to attention, so to speak? There was a lot of early rhetoric after these new 50% tariffs. Again, on a small fraction of Canadian goods would be applied, but nonetheless, $20 billion a year. It's not nothing. The Prime Minister came out immediately and said that, you know, his officials would be working with, you know, vigor and VIM. We've had, as a year, we've had, as as you say, repeated leaks and stories about Minister LeBlanc and trade negotiator Charette in Washington, it seems daily, both the leaks and their presence there. What do you make of this? What message has Canada sent to the Americans by seemingly being electrified by this August 19th date?

Well, I certainly wouldn't use the word credit to the administration of this. This is the essence of bargaining in bad faith. You know, bargaining in most negotiations is, if you give me X, I will give you Y. It's an exchange of concessions. It's not do this or I'll impose this massive penalty on you. If management walked into a labor negotiation and said, get a dealer, we're cutting your wages by 50%. I think people would view that as being bargaining at bad faith. It's not bargaining at that point.

It's extortion. So point one. But Andrew, just to stop you on that point, because you know that there was an argument, and I think you and I prescribed to it or subscribe to it, and our friend David From was an early proponent of it, which was the Canadian government should simply wait out the Trump administration, definitely wait until after the midterm elections. And there was an argument from the administration and from Jameson Greer, the U.S. trade representative, that the Canadians were dragging their feet. and that the August 19 deadline was, in a sense, to stop them ragging the puck. Boy, I'm getting into hockey analogies here, I better stop. Well, yeah, so we're going to impose an illegal tariff, certainly under the terms of the free trade deal,

of dubious legality even within the United States. Remember, they're reaching back to the 1930 Smoot-Hawley bill to impose this tariff, and there are legal experts in the United States who say that this is actually not an appropriate, not a legal use of it. So, okay, that certainly puts things in front of us. It's not clear, I mean, we have to always bear in mind, it's not clear they'll actually do it

because there'd be hell to pay within the United States if they do. Now, Trump is, again, unusually impervious to these concerns, to be doing this in the run-up to the November midterms, most presidents would say this is going to cost my party in the polls, and I better not do it. Trump doesn't care, possibly because he's, you know, well, I just have to see how free and fair that election is going to be.

So, but nevertheless, as you say, concentrates the mind. The thing that the Canadians always have to be bearing in mind is, first of all, if you make concessions in the face of this threat, does it actually alleviate the threat or does it just incentivize further threats? Secondly, if you get a deal by making the concessions, does this deal actually stick? Or does he just renege on it, impose tariffs later with some new demands?

So I still think the rag the puck stretch things out as long as you can is a good strategy. That's part of the reason why I think we will probably not see a deal on August the 19th. My betting money would be there'll be some agreement to keep talking.

Now, what I would say, sort of on the Americans side for once, is, I forget whether I've said this before on this, but my worst fear is at least in terms of the public demands have not been realized. So in terms of the public demands they've been making, I've been surprised at how reasonable they are. You know, put our alcohol back on the shelves, remove your retaliatory tariffs, get rid of supply management, or at least open it up a bit.

Those are not insane demands at all. Now, the insane part is they're not offering anything in return. Right. They're just offering less tariffs on it. Maybe we'll lower the tariff that we're putting on you. That's right. But the demands themselves, at least in terms of what we've heard publicly so far, haven't struck me as being out of line.

So that's sort of encouraging. But as with everything else, we'll have to see what comes out and what their actual demands end up being and whether they're ever actually satisfied or whether it just, as the economist says, whether it just lines us up for endless bullying. The booze tariffs seemingly has... have, I don't know, enjoyed a level of visibility and have resulted in a level of irritation, I guess specifically with the president. You mean the tariffs or taking it off the shelves?

Taking it off the shelves. Yeah. And it definitely got their attention. Yeah. And it's kind of, it's, does it suggest, Andrew, that retaliation works, that in a few instances where we have retaliated, We actually seem to have extracted some real leverage that we can use now. And actually, the booze thing, to give that away, to give that back to them and restock the shelves of the LCBO in Ontario with Kentucky Bourbon is a great trade. If, let's say, you can get rid of auto tariffs in return for that.

And does it suggest maybe, Andrew, that early on we were a little too gun shy about the advantages of, of, retaliatory terrorists, more of them, more maybe sectoral ones that presented problems for the president in specific geographies that, you know, bring a lot of CEO business, but also political pressure to bear on him. Well, it's a particularly useful kind of retaliation. So I agree with you, you know, you probably need to mix the strategies in a situation like this. The advantage of the liquor thing is, First of all, it's a tightly controlled market where you could basically governments in most provinces have a monopoly and what they say go. So it's relatively easy to implement and enforce. And at relatively low cost to consumers in Canada, you know, you can always choose other booze.

You can still get wine from other countries and other types of booze. So it's relatively low cost to consumers. Seems to be a lot of public support for it, relatively easy to enforce. And it's done at the provincial level. And I think as part of these negotiations, you know, there's sometimes different people play different parts. Having a loose cannon like Doug Ford as Premier of Ontario, it gives some plausible deniability to the feds. The feds can say, look, we can't control this guy. You know, we'll lean on him, but we may not be able to get him to come on board for this.

So as part of all this game playing, having different penalties imposed at different levels has its uses. So I'm not sure what broader lessons we can draw from it because of the peculiarities of the liquor market in this country. But to come back to your point, it certainly got their attention. It is certainly a bargaining chip that we can play. And I agree with you that we should hold off on playing it until we, absolutely have to. And again, always with the proviso of, is it worth playing that bargaining chip at all if you can't be sure you get a deal? But it may be helpful in at least warding off the worst penalties from them. Dairy quotas, Andrew, you know, loom large here. Parliament passed a resolution.

I believe it was right after the last federal election, saying that dairy quotas would be defended. I could be wrong about that, but I seem to remember it wasn't legislation, but it might have been a motion of the House in support of the dairy subsidy and protection system that we have in Canada. You took, I thought, some well-aimed swipes at the dairy cartel here, which, if we want to be honest with ourselves,

yes, has small family farms, but I believe the data backs it up that the majority of the quotas are actually owned by large multinational companies, some of whom are not even Canadian headquartered. How much, you know, again, room is there to run on this for the government? Because it seems like the Trump threats against dairy have now made Canadians more excited. about paying more for their cheddar cheese. And it's become like a war bond or something for Canada in 2026. As always, Trump winds up backfiring and achieving the opposite of what he intends to that respect. It's such an indefensible policy. Always has been.

It was at least comprehensible politically in the past. you know, if you go back to whenever it was, the 60s, I forget the exact number, it was something like a quarter million dairy farmers. There's now, I think, 5,000, 7,000, most of them in Quebec. It's just incomprehensible why it's even such a political lightning rod or third rail or whatever metaphor you want to use. So not only is it bad policy, not as only does it drive up the cost of essential food stuffs and not just milk, but dairy products generally, also chicken, eggs, butter,

all these things that are just absolute staple items are two or three times the world price. So we can support not even family farms, as you say, because part of the effect of the quota is the quotas that drive with the prices, the value of that premium prices gets capitalized into the value of the quota. So it makes it harder for new farmers, young farmers, to get into the business. It tends to reward consolidation, which is why you've seen more and more of these things being bought up by large, basically, agribusinesses. At the same time, it discourages Canadian farmers from going out and seeking export markets. They just hide behind these tariff walls and the quotas and produce products just within that envelope rather than going out and taking on the world.

And the first thing you hear from Canadian dairy farmers and others protected by this is, oh, we can't possibly compete. You've seen how efficient those New Zealand farmers are. Well, the reason the New Zealand farmers became so efficient is they got rid of their supply management. They had something sort of similar to it back in the past, and they scrapped it all. And lo and behold, New Zealand farmers became export kings. They had to. It was the only way they were going to survive.

And so they make these world-beating products that they export around the world-beating products that they export around the world. Well, there's no reason Canadian farmers can't do the same thing. So it's in their interest in the long term as much as anybody. And yet, we hold on to this indefensible policy, bad for consumers, bad for dairy farmers, and on top of it all, a huge trade irritant, not just with the Americans, but with everybody. Everybody's fed up with Canada on this issue. And to imagine that we'll hold hostage, not just this trade negotiation, but all kinds of trade negotiations, keep getting stuck on this point. It's just bewildering. And yet, it enjoys the support of every party. And as far as I can tell, every member of every party, except God bless us,

Maxime, who's got a lot to answer for, but on this one, I agree with him. But nobody in the sort of mainstream of Canadian politics dares get out of line on this. And in fact, of course, Andrew Shear was elected leader of the Conservative Party largely in the strength of his attacks or is supportive supply management and all kinds of Quebec dairy farmers signed up to become conservatives for the sole purpose of voting for them when they don't support the conservatives for a second. So it just distorts our politics, distorts our trade policy, you know, harms our trade relations. And on this one, I disagree with you, Roger, I disagree with the public, perhaps, that even though Donald Trump is demanding it, I think we can get rid of it.

Yeah. Well, let's see. We will barrel towards the 19th. I think your prognostication is right that there will be some kind of extend and pretend, maybe a partial deal. It's hard to see them coming up with something comprehensive. But on that whole theme, we're going to hold you back for a quick bonus segment exclusive to monk donors to talk about what's happening in the Straits of Hermos because it is, in a sense, Andrew, it's the crystallization of this dysfunctionality that we're seeing in the Canada-U.S. trade negotiations, that there are no deadlines. There are threats and more threats, but nothing ever ends. Nothing begins. We seem to be in some weird suspension of time, except I guess oil prices and diesel prices in particular keep ticking higher.

So Andrew's going to stay back for a few extra minutes with monk donors. If you'd like to become a monk donor, join now on our website, triplew.munk debates with an s.com. Find the donor level that's right for you. If you're a Canadian resident, we'll send you a charitable tax receipt for a portion of your gift and we'll also send you a link right away to listen to the back half of this monk dialogue with Andrew Coyne. Thank you for listening to the first half of our monk dialogue with Andrew Coyne. To get access to the full episode right now, consider becoming a monk donor.

For just $50 a year, less than a dollar a week, you will get 72-hour advanced access to all of our premium podcasts, including Friday Focus with Janice Gross Stein. You also get our live streams of mainstage debates and all kinds of other great perks and privileges. simply go to our website, triplew.munkdebates.com. That's MUNK DebateswithenS.com. And click on the join button on the top right hand corner of the screen. Again, that website,

triplew.munk debates.com. The Monk Debates are a project of the Aurea and Peter and Melanie Monk Charitable Foundations. Rudyard Griffiths and Ricky Gurwitz are the producers. Be sure to download and subscribe wherever you get your podcasts. And if you like us, feel free to give us a five-star rating.

Thank you again for listening.