LULU GARCIA-NAVARRO, HOST:
Here are some words I never thought I'd be saying. The United States is in a fight with Canada as President Trump arrives for a summit with North Korean dictator Kim Jong Un. While on Air Force One, on his way to Singapore, the president sent out an extraordinary series of tweets targeting Canada's Prime Minister Justin Trudeau, accusing him of making false statements and of being, quote, "dishonest and weak." At the heart of the disagreement is trade. Here's President Trump as he was leaving the G-7 meeting.
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PRESIDENT DONALD TRUMP: We're like the piggy bank that everybody's robbing, and that ends.
GARCIA-NAVARRO: Joining us now from Toronto for reaction is Peter Armstrong, CBC host of the show "On The Money." Good morning.
PETER ARMSTRONG: Good morning, Lulu.
GARCIA-NAVARRO: You know, Peter, Canada has always been one of America's most reliable allies, so I'm wondering what the reaction has been there.
ARMSTRONG: You know, it's funny when it happened yesterday and even through this morning, it's like this just wave of confusion. And people are just scratching their heads and saying, what on earth is going on here? How did this, of all things, go so incredibly sideways? Because you remember at the very outset, Justin Trudeau and Donald Trump appeared to have a really good relationship...
ARMSTRONG: There was this charm offensive from the Canadians. In May, they went to the White House. They did all these things with Ivanka Trump, and they - it appeared to be working. And then, increasingly, just over the last few months, it's clearly been coming off the rails and now this. And, especially, the confusion comes because Justin Trudeau - what he actually said that apparently angered the president so much was by any measure, frankly, pretty Canadian. I mean...
GARCIA-NAVARRO: Really? That's...
ARMSTRONG: ...It wasn't even all that - you know? It wasn't a particularly tough response...
GARCIA-NAVARRO: Yeah. What seemed to have inflamed President Trump was this statement - we're going to play it now - that Trudeau - at a press conference Trudeau gave after the G-7.
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PRIME MINISTER JUSTIN TRUDEAU: Canadians - we're polite. We're reasonable, but we also will not be pushed around.
GARCIA-NAVARRO: So yeah. That's pretty measured there. You know, so I've got to ask you. The strategy, as you mentioned, for Canada - but not only Canada but France and other countries - has been to try and sort of manage Trump to do this kind of charm offensive. But that isn't working.
ARMSTRONG: It's not. And now they really need to - all of these nations are trying to work with Trump - need to figure out what that means. And, I mean, on my show, we explore this a lot - well, what is the actual strategy? Because a lot of people say this isn't really what Trump thinks or really what he wants to get done. This is how he negotiates. And so you can't take it personally. And if you do take it even a little bit personally, you risk really setting the president off. And focus on what's actually going on here.
What he is - what Trump is really upset about, apparently, in this instance is Canada's strange way - the way we do supply management of milk and dairy. It's an artificial control system of the price of dairy and milk products in Canada. And yeah, he's right. There's, like, a 270 percent tariff on dairy coming in from the United States. He doesn't talk about the fact that there's a 130 percent tariff on peanuts going into the U.S. or 35 percent on tuna, that the average tariff in the U.S. is actually higher than the average tariff in Canada.
So if you get too caught up in what's rational and too caught up in what the numbers tell you, you'll lose sight of what's actually going on here. So a lot of people are trying to tell Justin Trudeau, take the high road here. Don't fall for the fight and actually just try to get back to the negotiating table and get a deal done.
GARCIA-NAVARRO: Yeah, get a deal done. But what could it mean for Canada's economy if we do get into a trade war? The U.S. is Canada's biggest trading partner. I mean, how much leverage does Canada actually have not to get, quote, "pushed around"?
ARMSTRONG: Almost none. And it's important to recognize that. I mean, 25 percent of our GDP depends on the United States. Seventy-five percent of our trade is done with the United States, you know? Trump is now threatening to impose new tariffs not just on steel and aluminum - that would be terrible for the Canadian economy. He's now threatening to impose them on autos going into the United States. That's a $50 billion industry in Canada. That - it's a massive employer.
And the supply chain - you know, we've spent 20 years, 30 years really building up an integrated supply chain that allow these sort of North American conglomerates to work better together. Putting in these kinds of tariffs just threw the wrench into that entire system. It would put people out of work. It would mean massive loss of the Canadian GDP growth. It would mean - I mean, it would be a disaster for Canada.
GARCIA-NAVARRO: Right. And just briefly - we only have a few seconds left. I'm just wondering where that's left Justin Trudeau. He's up for re-election. His poll numbers have been going down. Are people sort of celebrating his standing up to the U.S., or are they worried?
ARMSTRONG: You know, it's a good question. And right now everybody seems to be standing behind him. In the face of this latest spat and the tweets of the president and the way the G-6 - G-7, sorry - ended, the opposition leaders - people that I know that don't support the prime minister at all say he made the right call here, and he should stand up for Canada.
GARCIA-NAVARRO: That's Peter Armstrong of the CBC. Thank you so much.
ARMSTRONG: You bet.
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