LEILA FADEL, HOST:
Canada's latest tariffs on American products are in place.
STEVE INSKEEP, HOST:
Prime Minister Mark Carney imposed taxes of up to 50% on a range of American goods entering Canada. He's retaliating for tariffs that President Trump placed on Canadian products like aluminum, steel and dairy. In a moment, we'll discuss all this with former Canadian Finance Minister Chrystia Freeland, who negotiated with the United States. We begin with the latest news.
FADEL: Reporter Peter Armstrong in Toronto has been following the trade war and joins me now. Good morning, Peter.
PETER ARMSTRONG: Good morning.
FADEL: Peter, what is the state of things this morning?
ARMSTRONG: Well, so as you say, at midnight last night, this latest round, these counter-tariffs from the Canadian government, kicked in, and it's like, you know, this is the retaliation to the retaliation of the retaliation to those first tariffs that were imposed 18 months ago back when Donald Trump first returned to the White House. We're talking about, like, a $20 billion swath of tariffs, and they are dollar for dollar, though not product for product, with the latest U.S. tariffs imposed when those talks between Canada and the U.S. fell apart last month.
But, you know, I really think the line-by-line, sector-by-sector breakdown isn't really the concern. The concern is that we're really now into an escalatory cycle. It'll drive up costs and hurt businesses on both sides of the border. The expectation, of course, is that the U.S. is going to respond. And we all know this isn't going to have a huge impact on, like, the macro economy in the U.S., but where this hits, it hurts, right? Kentucky bourbon makers, California winemakers, tourism in all these areas that used to be so frequented by Canadian tourists. That's cost billions of dollars. The auto industry spent like $110 billion on tariffs and tariff-related costs. Canada's the biggest market for U.S. cars, right? U.S. auto exports to Canada plummeted 22% since all this started.
FADEL: So it will be felt in some sectors. How are Canadians feeling this morning?
ARMSTRONG: You know, I think it would be hard to overstate just how angry and betrayed Canadians are. You know, it's not just these latest tariffs, and it's not even just the 51st state stuff or, you know, the disrespectful way the administration calls the prime minister governor and all of that. It's the totality of the way Canadians and Canadian businesses feel they've been treated over the last 18 months.
Trump has said very clearly that he wants to make Canada a state. Though he doesn't have the power to do that, he was asked if he would use force to make that happen and responded that he would use economic force. Well, Canadians hear that. They see his actions, and they feel really that their very independence as a country is at stake, so they're very firmly behind the prime minister on this. But remember, Leila, Canada and the U.S. don't just trade stuff.
FADEL: Right.
ARMSTRONG: Those two countries build stuff together. We've built up these incredible and efficient, huge supply chains aimed at bringing down costs and taking advantage of this competitive advantage that we have in North America. Trump has said he wants that to stop. And, you know, Canada looks at that and says, we're the largest customer for 26 states. We're a top-three customer for 45 states. Canada's the biggest supplier of U.S. oil, electricity, fertilizer. We're the biggest export markets for autos - more than China, the U.K. and Japan combined. So it's really frustrating, I think, for a lot of Canadians, just to see where this has really gotten itself.
FADEL: So where do things stand, though? Does this just keep escalating? Is there a pathway to get trade discussions back on track?
ARMSTRONG: I really think that's the concern. The two sides are not talking at this point. Trump is posting maps of North America covered in the U.S. flag, memes of him fighting the prime minister and calling him governor. Defense Secretary Pete Hegseth was recently accused of making fun online of the appearance of a Canadian teenager army cadet and her instructor. The premier of Ontario went on TV and said Trump could kiss his you-know-what. You know, getting out of any conflict is hard. Trade wars are no different. Common ground is really needed, and none of this makes finding that common ground any easier.
FADEL: Reporter Peter Armstrong in Toronto. Thank you, Peter.
Yeah. You bet. Transcript provided by NPR, Copyright NPR.
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