Your World Tonight - How Canada is responding to U.S. tariffs

Episode Date: February 2, 2025

We're talking tariffs on the podcast, and the Canadian response on what Donald Trump has imposed on this country. We'll be looking at how multiple sectors are preparing - from auto makers to agriculture to oil and gas. U-S alcohol brands will also be coming off the shelves - as Premiers take their own measures. Plus, we'll take a look at a renewed push to "buy Canadian".

Struggling with debt? Help is available. Discover reliable solutions to help you get back on track. Visit Canada.ca slash debt dash solutions for support you can trust. A message from the Government of Canada. This is a CBC podcast. Hi, I'm Stephanie Scanderis. This is your World Tonight. Andres Ganderes, this is your World Tonight. We're talking tariffs on the podcast and the Canadian response to what Donald Trump has

imposed on this country, including U.S. alcohol brands coming off the shelves as premiers take their own measures, plus a renewed push to buy Canadian. We also have reaction from inside the U.S. but first we look at the details of the federal government's Team Canada plan. From meat and eggs, coffee to baby clothes, to certain home appliances, Canada has released a full list of the imports from the United States that will be tariffed

from Tuesday. The list, which targets billions of dollars' worth of American goods, is the first phase in Canadian countermeasures. We'll cover the trade war from several angles. We start now with JP Tasker in Ottawa. We don't want to be here. We didn't ask for this. But we will not back down.

Canada is hitting back at the U.S. with big tariffs to make President Trump pay for launching a trade war. Prime Minister Justin Trudeau will slap tariffs on some $30 billion worth of American goods starting on Tuesday. That figure will jump to $ hundred and fifty five billion dollars later this month. We're certainly not looking to escalate but we will stand up for Canada, for Canadians, for Canadian jobs. Some 1,300 US products will cost more overnight. Everything from juice and liquor to makeup and motorcycles, fruits and vegetables, jewelry and washing machines all made the lengthy list.

It's retaliation against Trump for striking Canada first with a 25% tariff on virtually all our goods and a 10% tax on energy. In this moment, we must pull together because we love this country. Trump's tariffs will be devastating for the Canadian economy. So many products will be priced out of the U.S. market. Windsor Mayor Drew Dilkens is bracing for impact in Canada's Motor City. It's hard to believe that, you know, our largest trading partner and our best friend as a country is acting this way towards us. Liberal leadership contender Christia Freeland is calling for a total war response.

This is a betrayal of America's closest friend and best ally. This is economic warfare. More than two million jobs are tied to U.S. exports, according to government data, and the premiers say hundreds of thousands of them could vanish. Ottawa is planning some sort of aid for those affected. Finance Minister Dominic de Blanc. Canadians want us to stand proudly against this kind of action but to support one another and we'll be there for as long as it takes with whatever it takes.

There is no justification whatsoever for these tariffs or this treatment. Conservative leader Pierre Poliev is condemning Trump for targeting a supposed friend and ally. He's demanding the Liberals recall Parliament to cut taxes and greenlight major energy projects to prop up the economy. It is insane that in this great crisis, Parliament is shut down. Some Canadians are already lashing out in the wake of Trump's attack, booing the American national anthem at an NHL hockey game in Ottawa. And in hard-hit border communities, the frustration is palpable. Mike Bradley is the Mayor of Sarnia, Ontario.

I already had a request from a citizen to take down the American flags. We've never had that happen before. So the anger is deep and it's abiding with Canadians right now. Kirsten Hillman, Canada's top diplomat in Washington, is trying to mend fences, still promising to crack down on drugs and migrants at the border to satisfy Trump's concerns, even if data shows Canada is not much of a problem. So it's hard to know what more we can do, but we're obviously open to any other suggestions

that come our way. There's still a chance Trump could call it all off. With so many American jobs dependent on trade with Canada, pressure at home could force his hand. But it's unlikely, and Canada, pressure at home could force his hand. But it's unlikely, and Canada is preparing for a war of attrition. JP Tasker, CBC News, Ottawa. So despite Canada's ambassador offering the US president an off-ramp, Donald Trump appears instead to be digging in, aggressively defending his tariff decision,

and again using disparaging language about Canada. Again saying this country should become the 51st state, language that's sounding more and more like a threat. Katie Simpson reports from Washington on what Trump, his allies and critics are saying about his actions. We're going to charge you large-scale tariffs on everything you send into the United States. Pin to the top of the president's truth social page is a video from the election campaign showing crowds cheering in support of Donald Trump as he promised to impose tariffs on America's biggest trading partners. My favorite word, tariff. It's part of his aggressive defense strategy, even as he warns Americans of immediate challenges ahead.

Writing in another post, will there be some pain? Yes, maybe and maybe not, adding it will be worth the price that must be paid. Here's what Americans are going to see, higher prices for energy, higher prices for groceries. Senator Tim Kaine is one of many Democrats trying to get the American public to understand exactly what this trade war will do to the cost of living. I think we might want to call this the Donald Trump Super Bowl tax. Senator Mark Warner says game time favorite snacks will cost more because guacamole and beer are imported from Mexico and Canada also citing significantly higher costs for cars, trucks and other purchases

that are already expensive. Donald Trump's saying no more. We're not going to be taken advantage of anymore. Vice President J.D. Vance acknowledged tariffs are about more than just trying to stop illegal drugs from entering the U.S. That is of course the premise the Trump administration has presented to justify its action. Vance sees tariffs as a way to generate revenue to pay for Trump's expensive election campaign promises. We are committed to getting America back on a sustainable fiscal pathway. Part of that,

we really think the president believes is the tariff equation. There is a sense among Trump's inner circle that if harm is done to America's trading partners, well, so be it. It seems to be the position of Homeland Security Secretary Kristi Noem. So economically, yes, they will feel pain. They will feel what these consequences are and will be able to continue to go forward with a president who is strong, who is putting America first. And for Prime Minister Justin Trudeau standing up for Canada, Republican Congressman Eric Schmidt says, Americans don't want to be lectured.

My advice to him is he probably ought to talk to the Canadian people who are about ready to throw him out of office because he's been a total disaster. Trump is ratcheting up his incendiary language about Canada, complaining on social media about trade deficits and Canada's defense spending, claiming Canada ceases to exist as a viable country without what he calls U.S. subsidization. Harsh but true, he says, adding Canada should become our cherished 51st state.

Words that likely hit hard north of the border at this brutal low point in the Canada-U.S. relationship. Katie Simpson, CBC News, Washington. Still ahead, the premiers are also responding to the U.S. tariffs, with many targeting one particular product category, booze. We'll tell you who's pulling American alcohol off store shelves and just how big that impact will be. That's later on Your World Tonight.

Well there's no sugarcoating it. A trade war between Canada and the US will have serious economic consequences for both countries. For more on what we can expect, let's bring in senior business reporter Anis Hidari. Anis, the word recession is being tossed around a lot right now. What can you tell us about the potential economic damage of these tariffs? Yeah, I mean it could mean a recession. There's reduced demand for Canadian products in the United States because they just got more expensive, but you know in the opposite direction, the tariffs that Canada is imposing to try and fight back those taxes

will make prices higher. They'll make the prices higher that Canadians pay. And that could mean that people buy less stuff here. A weaker Canadian dollar from all of this could provide a cushion, you know, for low loony makes it cheaper to do business here, that could help a bit. And there's also talk of government stimulus programs to cushion things. But overall, economists say it's really hard to model out or predict what this could look like. So the word recession gets tossed out. But we don't know by how much or if it's a for sure thing. None of the models they have, though, have particularly good news to them, though. None of the models they have though have particularly good news to them though. We have a free trade deal with the United States, KUSMA, the Canada-US-Mexico agreement.

Why didn't that stop this? So under KUSMA, the new NAFTA, even the old NAFTA, under these agreements, this kind of thing isn't allowed except in emergencies. And so Donald Trump is saying this is all because of a national emergency at the borders with Canada and Mexico. Now I'm not going to get into the merits of that argument, but this whole scenario brings up a big issue for international trade and any deals that the United States makes. It's had a free trade agreement with Canada for years, decades.

Now in some respects, the US is essentially saying, whatever, I do what I want when it comes to tariffs and free trade. Economists and lawyers that I've talked to point out it could make it hard to feel that a deal is a deal is a deal ever again with the United States. There's also this dangling threat that if Canada fights back, which Canada is, the US says it could raise the tariffs even higher. So what's the sense of the worst case scenario here? I've read some projections that said if there was a 25% tariff on everything from Canada into the US, and our country responded in exactly the same way in the opposite direction, our GDP could crunch down by like 5%. That's a big recession. Now,

that's not what's happening right now. We've got, you know, a different tariff here, a higher tariff there, it's more selective. But for some context, the big recession in 2008, that shrunk Canada's economy by around 3.3%. So, if we had a full-fledged, everyone's tariffing everything in both directions, you could imagine the 2008 recession, but worse. It's a brutal prospect. Now, a trade war won't only hurt Canadians. How will Americans be affected? Donald Trump's tariffs, as they stand right now, increase the prices Americans pay. American

businesses and American consumers. Let's look at just vegetables, for example. Nearly half of US vegetables are imported from Canada and Mexico combined. Those start to become 25% more expensive. People have to pay that price if they want vegetables. Cars get more expensive because a whole lot of the parts just shot up in price. Lumber, steel, energy, minerals. The idea is that everything that the US is importing from Canada and from Mexico becomes more expensive. So

that should make Americans want to buy stuff that's made in the USA instead, and drive American companies to make stuff in the USA. But right now, they aren't making all of those things. And so if you want to buy those things now, or when these tariffs come into effect, it's going to be more expensive for Americans. Anise, thank you so much. You're welcome. That's Anise Hidari in Calgary. So as Anise said, one possible goal of these tariffs is to force Americans to buy local.

Well that idea is already taking hold in this country. Plenty of people saying now's the time to make an even bigger effort to buy Canadian. Kobina Oduro tells us how people are taking action on that. In Sharon, Ontario just outside Toronto, Giancarlo Tramarchi is putting Made in Canada stickers on the shelves at one of his grocery stores. I was pleasantly surprised at just how many products were getting the label put in front of them. So that part makes me proud. Although the president of Vince's market is feeling a sense of Canadian pride, he's worried

about how the tariffs will affect the economy. I'm nervous. There's a lot of tension. There's a lot of anxiety about how this is going to play out. He says since the tariffs have been a topic of conversation for the past few weeks, there has been a push to support buying Canadian. Jared Roush in Saskatoon has been doing that for years. He created a Buy Canadian page on the social media website Reddit back in 2018 during Donald

Trump's first presidency. In the past few days, he's seeing increased traffic. It's a place for us to figure out ways to buy local, support our local economy, you know, with the tariffs, no better time to really start buying local. Prime Minister Justin Trudeau, along with premiers from across the country, are encouraging people to do the same. Experts though warn it could be hard to tell what's Canadian and what isn't because the North American economies are so intertwined.

Fraser Johnson is a professor at the Western University's Ivy Business School. He says this is most pronounced in the auto sector. We have a product that moved back and forth across the border and our integrated supply chains from Mexico to the US to Canada multiple times. Some Canadians are already starting to change their shopping habits, like these Montrealers.

Just got to do it. You just got to pay attention, read the label, see where things come from, take the time. I was already booking my coating before. I prefer to buy local products. I'm starting with my family and also forward the whole message for my colleagues and friends. Please stick to the Canadian products. In Quebec, a non-profit organization also wants to make local products easier to find on the shelf.

Projecteur du Quebec collaborates with retailers to add Made in Quebec or Design in Quebec logos on the shelves. General Director Erin Morin says local products have a reputation as being more expensive, but that isn't always true. If you compare two products of similar quality, one from Quebec and one from the United States as an example, I can guarantee that you will be able to find equivalence in many categories. Experts say if the bi-Canadian movement is to make a difference in the local economy, it needs to be a long-term commitment to have an impact.

Kubi Noduro, CBC News, Montreal. Now in the short term, different parts of the country will feel the impact of these tariffs in different ways. In Ontario, projections say a trade war could result in the loss of half a million jobs, and the automotive sector will bear the brunt of that. President of the Automotive Parts Manufacturers Association, Flavio Volpe, explains how quickly that industry will be affected on both sides of the border. The 25% in automotive will cause for a shutdown of the industry in the US, Canada and Mexico within a week.

The effect on the American side will be as profound in automotive as it is in Canada and as immediate. There will be hundreds of thousands of Americans on temporary layoff or worse just as quickly as it will happen in Ontario and Quebec. On the east coast the head of the Lobster Council of Canada says his industry still has some time. According to Jeff Irvin the busy season for live lobster is still a few months away. If the tariffs hang on into the spring when we're in full production virtually everywhere, fishing and processing and you know preparing for live shipping. So it's all a timing thing but at the end of the day if it hangs around the market will

start to react probably right away. In the prairies there are heightened fears of economic uncertainty for farmers. In 2023, Saskatchewan alone exported nearly 27 billion dollars worth of goods and services to the US. Jeremy Welter is a farmer in that province. There's an extreme amount of integration into our supply chains and that's been built in because it has worked out so well. This really creates a lot of uncertainty. I suspect it's going to create a lot of pressure and a lot of economic pain. And I hate to say it, I don't think everybody's going to make it. I think consumers are going to feel it. You know,

in a time of record high grocery prices, this is going to make things worse. In Alberta, the 10% tariff hitting the oil and gas sector on Tuesday is being met with concern by most in that industry. But for some, there is a feeling of cautious optimism. Emily Fitzpatrick tells us about that from Edmonton. It's still negative on the oil and gas sector, but not as bad as a 25% tariff would have been. Saturday's tariff announcement was met with mixed reactions by the oil and gas industry. Many experts were resigned to admit that while not ideal, 10% could have been worse. But today, reality is sinking in for the energy sector in Alberta.

Charles St. Arnaud is the chief economist with Alberta Central. And he says there are still many uncertainties surrounding how these tariffs could play out and who might bear the brunt of them. Ontario and Quebec will be more affected by the current structure of those tariffs while Alberta will be less affected. So the question is, will that increase tensions between the premiers of the province, especially of the various provinces, especially as we start to think about how Canada retaliates to those tariffs. Out of that potential for tension comes a potential for growth too.

Peter Tertzakian is the president of an energy industry firm in Alberta. He says diversifying our country's markets could be the path to strengthening the economy over time so that Canada becomes less dependent on its top customer. There's no question there's going to be pain, uncertainty, anxiety, impacts on investment and all of that. However we need to actually even look beyond that and say okay we don't want this A to happen again and B also this is a big opportunity for Canada and Alberta within Canada to grow up and try and get more diversified markets.

Alberta Premier Danielle Smith believes the way to do that is through pipelines. In a written statement, Smith said she wants a national effort to fast track building oil and gas pipelines across Canada. Warren Mabey, an energy and environmental analyst at Queen's University says moving oil has always been deeply interconnected with the U.S. Keeping it within Canada is an option, but it's one that won't happen overnight. The last example that we have is the Trans Mountain Pipeline. It was announced in 2013

and it was only brought online in 2024, so a decade. I don't know the combined will of many premiers working together could speed things up. I suspect not. I suspect it would take a long time. When the tariffs come into effect on Tuesday, Maybe predicts Americans will feel the financial impact first. But as the trade war continues, both sides will suffer. Emily Fitzpatrick, CBC News, Edmonton. Claudia Shane-Bom says Mexico's sovereignty is not up for negotiation. The Mexican president reacting today on the U.S. tariffs on her country. Shane-Bom says 25 percent U.S. tariffs on Mexico

will have a grave impact on the economies in both countries. And she rejects claims by Donald Trump tariffs on Mexico will have a grave impact on the economies in both countries. And she rejects claims by Donald Trump that her government has ties to drug cartels. The U.S. should set their sights on their own country, she says, where they have done nothing to stop the sale of illegal drugs. Luis de la Calle is a Mexican former trade negotiator and economist. He explains what industries will be most affected by the tariffs on his country. 60% of the auto parts that the U.S. imports from the world come from Canada and Mexico.

So imposing a 25% duty will doom car manufacturing in the Midwest. I mean, that is the best way to encourage importation of cars from Japan and Korea. The same thing on food. I mean, from avocados to beer to tequila, tomatoes, and bell peppers and everything else. So, US consumers in California, in Texas, and many other states will begin to suffer

either scarcity of Mexican products or higher prices. President Shane Baum says she will announce more details on Mexico's retaliatory tariffs on Monday. Well, starting Tuesday in many parts of the country, you'll have to grab a case of moosehead, say, over Miller High Life and Crown Royal instead of Jack Daniels. A number of provinces are pulling American alcohol from liquor store shelves. As Philipp Lee Shanock reports, Canadian alcohol producers say removing trade barriers between provinces should be the next step. Leaving a downtown Toronto liquor store, Will Main says he has no problem buying Canadian.

And I tried to do that today. I unfortunately failed. I accidentally bought two white cloths for getting there, Americans. So I'll fess up to that. Starting Tuesday, that won't be an option. The Liquor Control Board of Ontario will remove all US products from its shelves. Georgia Horseman says she doesn't mind that she will no longer have the choice. I agree with it. I think that for Canadians we got to stand strong together

and we don't need their stuff. We produce great stuff here in Canada. There's a silver lining for us. Debbie Zimmerman is with the Grape Growers of Ontario. She's looking forward to having more shelf space for locally made wine. It's really for us about trying to get more consumers to try that bottle of wine. And in Ontario, BC, Newfoundland and Labrador, PEI, Quebec, Nova Scotia and Manitoba, there will be more opportunity for producers of Canadian beer, wine, ciders and spirits, all announced retaliatory measures targeting U.S. alcohol. Manitoba Premier Wab Kinew says

it's about protecting jobs in sectors targeted by U.S. tariffs. The day that tariffs take effect we are going to be pulling US products off of liquor mart shelves. Local Manitoba producers like Brock Kutz of Patent 5 Distillery says it's a great opportunity but there are obstacles to buying Canadian. It's more difficult for us to sell into Ontario or Quebec than it would be into the US. Now's the time to look at these interprovincial barriers and see if we can do something about them. Concordia University economics professor Moisha Lander says there are other issues with the ban on selling U.S. alcohol. Why are we compounding a problem by removing the free will of people to choose what they do and don't like? And he says

while Kentucky bourbon is an obvious target, a complete ban on U.S. booze no matter where it's from could be hurting Canadian allies. Most of the wine that's made in the U.S. that appears on Canadian shelves is from California, Oregon and Washington. All three states have democratic governors. Only British Columbia is making that distinction. Premier David Eby banned his province's liquor distribution branch from buying American alcohol from red states. Still, Canadian producers will face challenges

even with the U.S. booze ban, says Craig McMillan of Ontario Artisan Wineries. We are going to be seeing increased costs for equipment, supplies and materials because of the tariffs going both ways. Which, as many economists say, make trade wars a no-win for anyone. Philipp Lee Shanok, CBC News, Toronto. Yukon is now the first territory to join the alcohol ban bandwagon.

On top of that there are other provincial and territorial countermeasures. Among them Nova Scotia says it'll double some highway tolls for commercial US vehicles. BC's premier is directing the province and Crown corporations to buy Canadian goods and services first. And in Quebec, Premier François Lagault says he'll do more to help small business and develop new markets for Quebec goods. Canadians are vying for Grammy Awards tonight and this song is from one of them. This is Witchy by Montreal DJ producer K. Trinada featuring Childish Gambino. K. Trinada is up for three Grammys including Best

Dance Slash Electronic Recording for this song and Best Dance Electronic Album for his third solo effort, Timeless, which also features this tune. Other Canadians up for Grammys are our conductor Yannick Nezet-Segan with three nominations, including for work he did on the movie Maestro, as well as Vancouver Metal Act, Spirit Box and Toronto superstar The Weeknd who have won not each. There are also Canadian producers who have worked on some of the year's biggest hits like Toronto producer Nathan Ferraro who has three nominations for his work on Beyonce's Cowboy Carter album. But we'll leave you with more from Kate Renata.

This is Witchy on your World Tonight. I'm Stephanie Scanderis. Thanks for listening. With me, yeah Can you feel it?