Well, I'm so proud of myself. I just won the top prize at ring toss. Oh, is that why you're holding this giant teddy bear? Yeah, I just brought this one from home But what I did win was a subscription to the indicator newsletter. Oh congratulations. That's very exciting. You can sign up
So that NPR.org slash indicator newsletter NPR This is the indicator from planet money I'm Adrian Ma the trade war between the US and Canada is entering a new phase back in August President Trump slapped 50% tariffs on a range of Canadian goods and now Canada one of our closest trading partners is fighting back Today counter tariffs ranging from 15 to 50% kick in on imports from the United States and that'll affect everything from steel to dairy products to electronics And so we felt like this was an appropriate time to check in with a friend of the show Paul Havershrude He hosts a podcast called cost of living which is a show about money and economics from the CBC and the CBC for those who don't know is the Canadian Broadcasting Corporation sort of like a NPR cousin to the north so I guess in a way Paul were practically related We absolutely are we keep talking though and like not happy family remains. It's always it's always Hopefully we're not in like a family feud of some kind like are we cool Oh CBC and NPR are great After the break Paul's gonna help us understand how Canadians are thinking and feeling about this situation and tell us how Canada's trade war strategy is
Just starting to take shape This message comes from Rula World Mental Health Day takes place in October making it a great time to take that next step in getting support if you need it Rula makes accessing quality mental health care affordable with sessions costing an average of $15 with insurance So turn off the talk track that's keeping you from progress and head to Rula.com That's R-U-L-A dot com to find a therapist the easy way This week on sources and methods President Trump's diesel deal with Russia Would it help with shipping costs and would it even illegal the United States produces more diesel than it consumes? There's no real need to bring more diesel into this country plus we take into claims from Ukraine that the US cut access to crucial military satellites Listen now to sources and methods from NPR Hey, how are you feeling right now?
Exhausted from the summer overwhelmed with the new school year restless anxious life kid is here to help Consider us your mental health accountability buddy with episodes on everything from navigating social anxiety to unlearning Perfectionism listen to the life kid podcast in the NPR app or wherever you get your podcasts So Paul the last time that we spoke it was January 25 They were hardly any tariffs between our countries and now we're looking at US tariffs on more than 20 billion dollars of Canadian goods including dairy alcoholic beverages cement even hockey sticks and In response Canada has as of this recording put on roughly 20 billion dollars in tariffs on American goods And so I'm wondering when it comes to US tariffs on Canadian goods Which ones are Canadians most concerned about well the most unnerved is what's happening with autos because really when you look at What we call kuzma what you call the USMCA used to be now after our free trade deal really at the heart It's an auto pact. We've had an auto pact since 1965 both sides have agreed on it It's done good things for our auto industry on both side of the border auto workers And it really seems like what the US is coming after or what the Trump White House is coming after is our auto sector
When you say Canada's auto sector what kinds of things are they making there? Well, we make cars and trucks here like we make the Chevy Silverado We make some other medium and heavy-duty trucks We have a big parts sector and yeah all of that is being hit and adding incremental costs to the price of cars So with these tariffs coming from the US Canada has responded. What's Canada's overall strategy with their Counter tariffs. It's kind of simple. It's just we have to stand up to the bully Essentially like Canada doesn't want these counter tariffs. They're gonna make the stuff we buy more expensive, but nationally again
We're also willing to accept it willing to accept willing to accept economic pain higher prices because what's the choice agent? We just roll over and then the bully keeps coming back for more so then strategically if we zoom in on like what is our strategy? What are we targeting? Well, we're going after stuff in swing states like Ohio like Pennsylvania some other border states in the Hochir is that the counter tariffs will put some political pressure on the White House ahead of the midterms about 80% of our counter tariffs are for industrial inputs So stuff that's not super sexy steel aluminum the rest are for consumer goods And if you look at the US you have a thirty trillion dollar economy So 20 billion at is less than 1% the reality is most Americans are not gonna notice these counter tariffs But strategically Adrian Canada is looking to cut narrow but deep with these I mean I understand bourbon is also a flashpoint in this round of trade disputes Is that right? Well, it is and that really gets to Canada's counter tariffs cutting narrow but deep I mean we have nothing against the good people of Kentucky or their bourbon But we buy as Canadians a lot of Kentucky bourbon. It's not a federal government thing eight of our 10 provinces have decided on their own
Yeah, we're mad at what's happening. We're angry. What can we do to get back at the Trump White House? We control our booze purchases. So we are not going to stock that in provincially controlled stores anymore You know we should mention here that even more tariffs could be on the horizon President Trump announced more punitive tariffs on Canadian cars and trucks that would go into effect January 1st And you started to talk about the auto industry before but what would these even more?
Serious tariffs mean for Canada's auto business. You know how when Ghostbusters when Bill Murray asks what would happen if we cross the streams and Egon says it would be bad Adrian those tariffs for Canada They would be bad like that's it 50% tariffs on Canadian Auto's is like an existential threat to our car and truck industry here It would potentially decimate Canada's auto industry It would blow up an auto pack that has been good for both sides of the border Automacres on both sides of the border and car bars on both sides of the border since 1965 So it's such an existential threat Maybe it's just a move it's trying to get us back to the table and get some leverage in a future trade deal I mean it's still January 1st is what four or five months away We've got some time to get back to the table. How are everyday Canadians feeling about this like is it water cooler conversation or people talking About it around the kitchen table. It absolutely is. It's very present because we get a lot of us media up here We can't help but hear everything that's being said whether it's about the terror specifically whether it's the Lake Ontario stuff The 51st state nonsense has really really played up here
I mean that has really got us riled up You're referring to president from executive order renaming Lake Ontario to Lake America And then his references to Canada being the 51st state and referring to our Prime Minister as as governor I mean, that's just it's disrespectful all of a sudden you take this from okay You're having a trade dispute which can exist over here to something that is much more fundamental to us It's speaking to our sovereignty economic and otherwise again It feels like an existential threat to Canada So if you think about how this could play in the broader trade discussions The federal government right now in Canada the people who are negotiating this prime minister are currently They seem to have a lot of support from rank and file Canadians across the political spectrum There is definitely I think an element of anxiety that comes along with this But also it sounds like the mood is sort of defiant Yeah, absolutely because again, we're not going to you know crater the US economy We can't do that. Can we kick in the shins? Sure. Can we make different sectors feel that and can we hope that eventually?
Cooler heads prevail and and you back off Yeah, but we want sort of return to more of what has become normalcy over the last you know six years 70 years We know Trump has his negotiating style, you know, it's just attack attack, right? What about the Canadian government? Do they have an incentive here to make concessions or do you think they're locked in for now? Absolutely, we have a ton of incentives to make concessions We're kind of slow playing this a little bit as much as we can But we also know this 20 billion dollars of tariffs we're talking about right now This isn't even the main event We're still not even talking about kuzma or usmca renegotiations or negotiations which we still have to get into right? So we know if we if we roll over right now on this 20 bill Then what starting position are we coming at when we when we sit down at the table for those negotiations right now?
It does look at your like Canada and the US are doing some signaling back and forth to each other Paul Havershrude is host of the podcast cost of living from the CBC Paul despite all the geopolitical tension I'm glad there's no public broadcasting tension between us. We're always cool Adrian looking forward to having you on our show If you like this program and find value in it the easiest way to support our independent journalism is by joining NPR plus Go to plus that NPR org which will get you bonus episodes invites to virtual events and sponsor free listening This episode is produced by Cooper cats McKim with engineering by Robert Rodriguez He was back checked by Sierra Juarez and edited by Julia Ritchie Kicking Canada is the show's editor and the indicators of production of NPR This election season let the NPR politics podcast save your time and your sanity will help you understand key races Which polls you can safely ignore and what might happen if power shifts in Congress our short daily episodes come out every afternoon So you can spend less time scrolling through each chaotic news cycle make NPR politics your hub for midterm election coverage follow our podcast on the NPR app or We'll get your podcast on the next through line from NPR
I was surprised that this man every single day takes a chair and goes to the troubles and degrees of his house and he starts to tell Stories to his children to his mother to his wife We travel through the past four seasons of ceasefire in Gaza with NPR's and as Baba