How Canada & Mexico Respond To Trump's Tariffs

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Speaker 3 Hey there, it's the NPR Politics Podcast. I'm Asma Khaled.
I cover the White House.

Speaker 4 And I'm Susan Davis. I cover politics.

Speaker 3 And today on the show, Trump tariffs are back.

Speaker 5 It's a big deal. It's a big deal.
This is the beginning of making America rich again.

Speaker 3 Yesterday, the president announced 25% tariffs on all steel and aluminum imports. Every country, no exceptions, no exclusions, even for our neighbors, Canada and Mexico.

Speaker 3 And this all comes after Trump had threatened and then pulled back from sweeping tariffs on Canada and Mexico. So today on the show, we want to hear how our neighbors are reacting.

Speaker 3 And lucky for us, we have got a stellar group of international correspondents that we can call up.

Speaker 3 And we're going to start up north with NPR correspondent Jackie Northam, who is just in Canada's capital, Ottawa. Hey there, Jackie, thanks for joining us.

Speaker 6 Hey, thank you very much for having me.

Speaker 3 Jackie, how is Canada responding to this latest news from President Trump?

Speaker 6 Well, Prime Minister Justin Trudeau mentioned to Vice President J.D. Vance that this was going to hurt his home state of Ohio.
Canada is the largest supplier of both aluminum and steel to the U.S.

Speaker 6 It's going to have a huge impact if this does happen.

Speaker 6 However, Trudeau has not said whether he is going to place retaliatory tariffs if these do go ahead, unlike earlier tariffs that Trump had said he was going to put on all Canadian products.

Speaker 3 Yeah, Jackie, I want to ask you about that because there was a lot of back and forth a couple of weeks ago where Trump threatened widespread tariffs on Canadian goods that would come into the United States.

Speaker 3 And I recall Justin Trudeau said, well, then Canada will retaliate.

Speaker 6 Yeah, sure did. He said it was going to be the same, 25% tariffs on a wide range of U.S.
goods, up to $100 billion worth. And so that would be, you know, U.S.
cars or plastic,

Speaker 6 alcohol, any sort of beer and bourbon, household products as well.

Speaker 6 And the reason that he did that, because the tariffs that Trump was threatening to slap on Canada, which are still in place, they're just being suspended for now.

Speaker 6 We don't know if they're going to be, you know, come back again or not. But this was really hitting Canada hard.

Speaker 6 You know, it was affecting agricultural products, lumber and paper products, but also things like potash that's used for fertilizer. They were also, Canada was also facing 10% tariffs on crude oil.

Speaker 6 Now, if you think about it, the U.S. gets about half of its imported oil.
So these were really digging deep.

Speaker 6 And so that's why Trudeau turned around and said, right, we're going to hit back as hard as you're hitting us. And to be honest, he had

Speaker 6 really just broad backing. by the Canadian public because they were sort of fed up with being what a lot of people think is being bullied by the U.S.

Speaker 3 So these broad tariffs that Jackie was describing, as she mentioned, they are suspended for now. They could come back, right?

Speaker 3 We don't really know what's going to happen on those across the board tariffs. But to me, this is interesting because Canada is a longtime ally of the United States.

Speaker 3 I mean, the countries share the largest undefended border in the world.

Speaker 3 And so by acting this way toward a major ally, it seems like President Trump is signaling that foreign policy policy is just a far more transactional process for him than it has been in previous administrations.

Speaker 4 Aaron Powell, you do get the sense that Canada has been put on its back foot a little bit since Trump took office.

Speaker 4 I think that Mexico was prepared for a more contentious relationship with the White House, but I don't know if Canada really saw this coming.

Speaker 4 I will say broadly, I don't think anyone should be surprised by this if there was anything that Trump talked about more consistently on the campaign trail and has seemed the most committed to in the entirety of of his political lifetime is the idea of tariffs.

Speaker 4 And I think these two specific types of tariffs, I think, illuminate how Trump sees them in two different ways.

Speaker 4 I think that the initial tariffs that he had announced against Canada and Mexico were a bit of a stick. It wasn't about the economy.

Speaker 4 It was about getting these countries to respond to immigration and drug policies. And frankly, they did.

Speaker 4 So I think that there are a lot of Trump allies that look at his efforts on tariffs and say, look, it gets people to the table and it gets people to enact policies they might not otherwise enact if he wasn't so threatening.

Speaker 4 On the steel and aluminum front, I think these are a little bit different. I think that this is much more aligned with Trump's economic vision and that he's trying to right-size certain U.S.

Speaker 4 industries, like the U.S. steel industry, which the industry itself is celebrating the tariffs, if not domestic manufacturers.
I don't think it's a negotiating tactic. I think it's economic policy.

Speaker 4 And so it doesn't seem to me that those would be as likely peeled back. It seems like the steel and aluminum tariffs could be here to stay.

Speaker 3 Jackie, there's one thing, though, that Sue just said I want to ask you about, and that is the idea that the initial overture from Trump around broad-based sweeping tariffs, that it worked in eliciting some sort of response from Canada.

Speaker 3 From your vantage point, from your conversations with the people and politicians in Canada, did it work?

Speaker 6 At the end of the day, the difference was between when he said he was going to do it and when he said he was going to postpone the tariffs. Two things happened.

Speaker 6 One is that Canada agreed to announce a fentanyl czar. And this is really an American term czar.
You wouldn't hear this in Canadian lexicon, right? It's just not there.

Speaker 6 And the other thing was a joint strike force team meant to target money laundering and the criminal underworld and that sort of thing.

Speaker 6 Other than that, Canada had everything else in place already, over a billion dollars to beef up its border security, things like that.

Speaker 6 So we're not really sure what the difference was between he said he was going to implement them and until he said he was just going to hold off for a month, just those two things.

Speaker 6 So it really leaves a lot of Canadians wondering, what was this about? You know, I was just up there on a trip. I was so struck by the, you know, just a depth of anger and disappointment.

Speaker 3 So given that ill will that Jackie has described, what is the off-ramp here? I mean, these two countries, Canada and the United States, have economies that are deeply intertwined.

Speaker 3 Is there an off-ramp here?

Speaker 4 It certainly doesn't seem like it.

Speaker 4 And I know it's partly Trump being Trump, but I also think the continued talk, and I think he reiterated it just within recent days, of wanting to make Canada the 51st state.

Speaker 4 Obviously, that's a much more complicated process. But I think it does sort of speak to almost a bit of dismissiveness Trump has towards Canada as an ally.

Speaker 4 I think he sees their resources and their minerals as something that the U.S. has direct interest in.

Speaker 4 And this is one small example of a bigger worldview in which I think Trump is much more antagonistic and dismissive of traditional U.S. allies, especially when it comes to economic terms.

Speaker 4 Like he just wants, he wants a better deal, even from longtime U.S. allies.

Speaker 4 And I think you're going to see this intensified because the White House is already indicating that they're looking to the European Union for more tariffs.

Speaker 4 And I think they're similarly saying like, wait, well, why us? And it is a profoundly different economic viewpoint coming from the Republican Party. And Trump is ready to go.

Speaker 3 All right. Well, Jackie Northam, thank you so much for bringing your reporting to us.

Speaker 6 Thanks very much. Nice to be here.

Speaker 3 And we're going to take a quick break. And when we get back, we'll have more on the reaction from our neighbor to the south, Mexico.

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Speaker 3 And we're back. And we're joined now by our colleague Ader Peralta, who covers Mexico for NPR.
Hey there, Ader.

Speaker 8 Hey, Osma.

Speaker 3 So, Ader, I also want to get the response that you are hearing from Mexico to this latest move from the Trump administration, the 25% tariff on steel and aluminum.

Speaker 8 You know, Mexico's president, Claudia Schembaum,

Speaker 8 has always said that Mexico's response will be cool-headed. So this morning, the president came out for her morning briefing.
You You know, she basically said, everyone, stay calm.

Speaker 8 We're not going to enact retaliatory tariffs, unlike Canada.

Speaker 8 And, you know, basically she said these tariffs on aluminum and steel are not a reality. They go into effect in March.

Speaker 8 And she said, we're going to talk. She got her economy minister out and he said, look, these economies are too interwined.
And so we have to find common sense.

Speaker 8 And he said that Mexico is going to wait for Trump's cabinet to get settled and that they just want to have phone conversations.

Speaker 8 And what the economy minister said is, we're going to explain to Trump just how complicated and impossible this would be for him. And he gave a really interesting example.

Speaker 8 He said, take a look at pistons, the pistons that go in cars. For a car that is made in Michigan, those pistons would be made with U.S.
aluminum.

Speaker 8 But then that same piston goes into Canada and then to Mexico and then back into the U.S. Sometimes, he said, that piston can cross borders up to eight times.

Speaker 8 And so they're like, so what are we going to do? Are we going to put tariffs on this piston eight times? times? What would that do to car prices? What would that do to American consumers?

Speaker 8 And so I think the bet here in Mexico has been to hope that these economies are so integrated that Trump will eventually back down from tariffs once he thinks about the consequences of them.

Speaker 3 Is that the strategy as well then that Mexico took when President Trump announced the broad sweeping tariffs that were going to go in place on Mexican goods on February 1st?

Speaker 3 Remember, that was similar to what happened in Canada. He announced these big tariffs.
There were some talks and then he pulled back. But was Mexico's reaction similar at that time?

Speaker 8 It was exactly the same. And the first tariffs that President Trump announced, he would place 25% tariffs on everything coming out of Mexico.

Speaker 8 That's a huge deal because Mexico has become the number one trading partner for the United States. So it's billions of dollars on all sorts of things, right?

Speaker 8 From limes and avocados to computer screens to the cars you drive. Mexico took the exact same tack.

Speaker 8 On the day that President Trump announced those tariffs, Claudia Schemebaum said, we have retaliatory measures ready. But I'm going to wait to talk to President Trump.

Speaker 8 That next morning, she talked to President Trump. she came out to the nation and said, these tariffs have been postponed.
And this is the playbook, actually, that Mexico used during its first term.

Speaker 8 And basically, what they've learned, and they've told Mexicans this, right, is that we're not going to take on Trump in the sort of same aggressive manner that he takes with us.

Speaker 8 And so far, that seems to be working.

Speaker 3 Ader, the way that these negotiations were presented to us, those of us who cover the White House, is that President Trump wanted changes from Mexico on immigration and that he got changes on immigration, did he, from Mexico?

Speaker 8 I don't know. I think it's a bit of a sleight of hand.
Right now, Mexico is not doing anything that it wasn't doing when Biden was in office.

Speaker 8 I mean, Mexico, when Biden was in office, had sent troops to the border. It allowed the U.S.
to deport non-Mexican migrants to Mexico.

Speaker 8 You know, we've been hearing a lot about raids and all these military planes shipping migrants back to their country.

Speaker 8 But the Mexican government says that they haven't seen a significant uptick in deportations since Trump took office.

Speaker 8 So I mean, in a lot of ways, Mexico's relationship with the United States is the same. They're doing sort of the same things.
But what we're getting is a much more aggressive language coming from U.S.

Speaker 8 leadership.

Speaker 3 Sue, do you see

Speaker 3 these threatened tariffs as a negotiation tactic from the Trump administration?

Speaker 4 Yeah, I mean, they absolutely are. And again, I think that this is where I say you have to look at tariffs as a multi-pronged tool for Donald Trump.

Speaker 4 I think that they will likely come back if immigration outcomes are not achieved. On the immigration front, I think that that is a direct response to the election.

Speaker 4 And Republicans on Capitol Hill see this as sort of their number one legislative priority.

Speaker 4 They're trying to put together a budget resolution this week that will allow them to spend much more money to send to the U.S. border.

Speaker 4 And I think that this is going to be a repeat throughout this administration. And again, separately on the economic economic front, I think he sees it as a tool there.

Speaker 4 And I will say that, like, Trump is not entirely alone here.

Speaker 4 It was interesting to me that Debbie Dingell, who's a Democrat from Michigan, she said, like, look, tariffs are a tool and we should think about using them as a tool.

Speaker 4 I think where the discomfort comes from is that Trump is using them as a bit of a sledgehammer and they'd like more of a scalpel approach.

Speaker 4 And she also said the trade agreement between the U.S., Mexico, and Canada was recently renegotiated under Donald Trump, right? And she's saying, like, look, maybe we don't need to be doing this.

Speaker 4 The United States doesn't need to be doing this with like scattershot tariffs. They need to renegotiate this broader trade agreement between these allies to get a better deal for the U.S.

Speaker 4 Like do it, do it as a big structured reform versus a really unpredictable strategy, especially because tariffs do create a great sense of uncertainty in the U.S. economy.

Speaker 4 I would also say, too, that Donald Trump is convinced that tariffs will increase revenue for the United States of America.

Speaker 4 And he is convinced that tariffs are going to be a pay for for for the tax cuts that they want to renew.

Speaker 4 And I think that's creating a bit of unease on Capitol Hill because it's a little hard economically to always explain how tariffs will increase revenues.

Speaker 4 But the White House has made that very clear that that's their economic strategy here. And I just don't think on this particular economic issue, he's willing to show a ton of flexibility.

Speaker 3 So then, Sue, just like I asked you about the dynamic with Canada, how does this end with Mexico? Is there an off-ramp?

Speaker 4 It's a great question. I do think, economically speaking, the U.S.
sometimes has a a weakened hand because we get a ton of our produce from Mexico.

Speaker 4 And if you start instituting broad-based tariffs, what's the thing that's going to go up? Grocery prices.

Speaker 4 I mean, that is almost like the easiest way for everyday Americans to start feeling those price impacts. And so I do think that while I kind of do think the U.S.

Speaker 4 has the upper hand in negotiating these because of the size of our economy, I think that you can't be completely politically blind to the potential blowback against Trump and Republicans for rising grocery prices.

Speaker 8 And I could be terribly wrong here, Sue, because

Speaker 8 I hear you on Trump being dead set on tariffs, right? But I think if things do change

Speaker 8 between these countries and in this market, it's probably just not going to happen with the swiftness that we've been seeing in these first few weeks of the administration.

Speaker 3 All right. Well, we will be keeping an ear out on what develops on the tariff front.
But Ader, thank you so much for joining us.

Speaker 8 Thank you guys for having me.

Speaker 3 And that is a wrap wrap from us today. I'm Asma Khaled, I cover the White House.

Speaker 4 And I'm Susan Davis, I cover politics.

Speaker 3 And thank you all, as always, for listening to the NPR Politics Podcast.

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