see from the minerals beneath the land payments and navigate the jo tribal disputes above it. the witness golden light on now to sierra trade war between the us and its neighbors. a voted for now. president trump delays imposing terrace on canada or mexico. but not china. why see, pushing for the levels of those expense in washington afford to 80 make its biggest trade partners? this is inside story. the hello again, i'm james pays us president donald trump plans to impose terrace on canada and mexico on hold off the 11th our deal. they've been delayed for a month,

but us terrace on chinese products have gone into effect and beijing as hit back with duties of its own that it uses washington of unilateralism and it's filed a complaint with the world trade organization. president trump says america has been ripped off by a free country in the world. so tariffs, the onset, and what cost and his trump using the jew t says they're negotiating tactic will get more on little best with our pile of guests in a moment. but 1st, this report from alexandra buys less than a month into his 2nd term, us president donald trump is waging economic war on multiple fronts. in one announcement after another threatening terrace against countries around the world, making it clear the us economy is his strongest weapon. and not even allies are safe. i don't want to use names, but they're so very powerful, both economically and a, getting everything else you want. but when you have

a pot of gold attached or detached, a very good and very powerful his target this week, america's 3 largest trading partners, a 25 percent levy on goods from neighbors, mexico and canada, and 10 percent on china. trump put trade worth $1.00 trillion dollars on the line terrace, or taxes on imported goods. and the u. s. is the world's largest importer president . trump said the levies would force those government to do more to stop illegal drugs. and undocumented migrants from getting into the us. he's also promised to boost for domestic industries. but there was an immediate blow back. canada announced terrace of its own, and stores told us of goods from their shelves. this is a choice that yes, will harm canadians. but beyond that, it will have real consequences for you the american people. in the service,

there were high stakes phone calls, but ultimately, trump claimed early victories. mexico kind of deal with the we reached an agreement to place more national guard in the northern buddha in order to protect the border and prevent drug trafficking canada. it promised to tighten border controls and an exchange. the us terrace are on hold for a month, a china not so easy. just hours after trumps trade taxes came into effect basing responded with a list of its own terrorists on crude oil, natural gas and farming equipment. tighter export controls on in demand rare earth minerals and investigation into google and a complaint to the world trade organization. i can clearly they wanted to provide a president changing thing with a bit more leverage in advance of the upcoming a phone call with donald trump. and i think also it's a, it's a bit of

a shot across the bow indicating that china will not hesitate to respond and respond unfortunately this time around. but in the meantime, trump has already set his sights on his next target. the 27 members of the european union leaders of the block say they hope to negotiate. but if all else fails, they too will retaliate. alexandra buyers out 0 for inside story or the well, let's discuss all of this in more detail with all guess today. and we have from geneva, dimitry growth. they've been sky the director of explain trade a trade policy and negotiations, consultancy, and a former delicate for australia, the world trade organization in london, greg fencin spot founding partner of the investment banking firm, brake mcadam, he's also the chairman of republicans overseas u. k. and then halifax,

canada gavin fidel, a professor of political science and global development studies st. mary's university. he's the co author also of rethinking development products. exciting gentleman for joining us on today's inside story program. we've seen of foster moving a timeline of action and reaction and recent house. i want to come to that in a moment, greg, but 1st i'd like you to take us back a bit. this is something that donald trump campaigned on when he was elected in the event, but you support his policies. so explained to us, what is he trying to achieve with these towers? that's a great question and then you're absolutely right, james. the telegraph to rather well in the campaign as well as during the transition. so, and when president trump is trying to accomplish is what the really, what the voters of the americans voted for, which was fairness in trade and, and more equal treatment by our trading partners. in other words,

having terrorist basically around the same level. so there's, uh, there's just trading equality. but secondly, he's using it as a geo political weapon, as, as discussed in the, in the 1st few minutes of, of this, of the show. and he's tried to achieve some political goals that will be beneficial to the country and in many ways beneficial to the world. well, good, let me just take to off on that because you all, i think in a perfect position to show how in to connect to the world is yours, that an american you worked around the world, you're currently based in london in the u. k. just a few years ago, republicans used to talk about the benefits of capitalism. globalization in free trades that changed that. yeah, absolutely. and the party has changed. and i think the orthodoxy in the republican party was always free trade. but i think what president trump has done rather well is explained that it's not free and fair trade. it's,

it's in many cases managed by multilateral institutions. i think the president prefers bilateral trade deals for that reason. and so i think it was so many ways a wake up call to republicans that things are really free and fair. you've got a $300000000.00 trade deficit with china. from us you have a $230000000000.00 trade deficit with the you. so some of those things are, are distortions in the global trading system. and then perhaps more importantly is, you know, looking at the rules, looking at the, the tariffs, you know, the germans are, or have a tariff on american cars. that's 4 times what the terraces on germany, cars, for example. but also, as i mentioned, the digital political issues and it's to a certain degree that the americans are flat, financing, much of the west, and in terms of obviously in defense and security. but also as well in, in these trade surpluses that, that are enjoyed by the u and by china. and in the case yesterday of mexico and

canada, the u. k. is a little different because of there's, there is a bit of a trade surplus in the u. k, but it's very small. so i think that's a, a different situation for the u. k. s, but generally speaking with the biggest trading partners, the surfaces are great and that makes them more vulnerable to the terrace, which is why canada and mexico flips so quickly yesterday to meet for your organization is called explain trade. i'd like you to do that for us. what are terrace all day? a good idea? what effect would they have on the u. s. economy? if donald trump went ahead with this a short survey terrace? uh, uh, as your introduction said, the tax on importing things. if you want to bring in a product from overseas, sometimes the government will charge you a percentage of that product value. as you can think of it, there's a little bit of like a petri, it isn't tax to say you could have bought this locally,

but you tries to bring it in from the seas. and so we will charge you a tax for doing that. there are types in many ways, like any other day incentive, i have some behavior and distance and devise other behavior. so they dis, incentivize, bring in things from abroad and running supply change the cross borders. so making a little part of your product in one country and then bring it back home and they may be sending it obviously as again. and they raise a bit of money for the treasury in martin. the economy is, it's not a big part of the title treasury, but it is, is some in terms of whether they are good or not, they can be considered on their merit. so the terrace against mexico and canada, had they gone into effect, would have raised prices for american consumers. and they would have, i think disrupted some of the supply chains that have been built around the idea that that boy is fairly easy to cross with no tax. so that would have been disrupted. that would have been the cost. but there would have been some money

raised on that would have been of greg was saying some, some benefits in terms of political pressure applied on canada and mexico. it's a policy like any of a gap in the terrace that we're gonna go into effect on mexico and canada with 25 percent. where is the china? it's just 10 percent. what's the view the in canada, they the so you know, you all the closest ally to the united states put the economics for one site to one side for the moment. does more people feel about this and, and the, even the fact the present on trump has been told thing canada that perhaps it should become the 51st state that yeah, i mean, i think canadians were pretty devastated these last couple weeks leading up to this . we are a weaker trader, we partner versus us. we are very dependent on the u. s. economy. we're very integrated into the us economy. we've been coast partners for decades. a lot of the official story here doesn't really track for canada. canada is not

a major source of legal immigration. we're not a major source of illegal drugs. i think in terms of fentanyl canada accounts for 0.2 percent of defense and all the across the us border. none of it really means much sense. canada has been willing to work with us on these issues. 2 months ago, they offered $1300000000.00 to toughen up the border control. it's all been a bit surreal. beginning and economies been on the line, hundreds of thousands of jobs at stake. and i think i can meetings were shocked by the way this is played out, relieved that we got a temporary reprieve yesterday. and, and i think a lot of what's being laid on the table that doesn't really cover all what's going on because it's not just a strictly rational policy. sometimes kaden's don't even understand what they're being asked for from one week to the next truck mentioned banking yesterday and things just keep being thrown on the table and no one's really clear how we're supposed to respond. but that i would argue that canada is willing to continue to be a good partner with us and medicaid. and don't understand why any of this happen in

the 1st place. gavin, if you all the world's largest economy, the u. s. is the world's largest economy. wouldn't to world of totally free trade be the thing you want to keep growing that economy to well, i think that always depends on the conditions you're in. i think north america, in general, has been losing competitiveness to asia and to other economies. and i think that's been one of the last 10 years and 15 years there's been this sense that we need to strong in north america, canada, us, and mexico to compete with asia. so it's true that in certain ways the us has less competitive today against china, for example, than they were in the past. it's certainly not true that mexico and canada or some sort of threat to that competitiveness. you could make an argument that the u. s. as wanted to attract more investment into the us by creating a kind of chaos in canada and mexico, so their investors are wary. but even then it becomes complicated. i'll give you an example. canada canadian investors invest far more money in the us economy every year. then american investors invest in canada, so the us is

a very strong economy and they have lots of great potential. and i think in a way there's a kind of performance around these tariff wars that don't always add up to strict g opus geostrategic goals. it's about projecting american power. trump wants to make deals, he wants to show his base, he can extract concessions from weaker partners that i think sometimes that political show is as, as important as any particular economic or a strategic logic. greg, there are many who are comparing what trump did and it's for us to, to now. and they say that there were people around him 1st time around that was stopping enticing rash, action. and many argue that this time that are on the golf rails and the grown ups around to this time is he running the us the way he used to run the trump impala very impulsively and aggressively. and is this not going to be damaging to ensuring a lots is that depend on trust? yes, i don't think so. i think what,

what's happening here is president trump is much more comfortable in his position. he's got people around him who he knows very well and barks on the same page as president trump both economically and g of politically and where he didn't have that in the 1st. in his 1st term, he had a lot of people who were establishment types that had been around washington quite a bit and, and president trump for recall he, he had spent very little time in washington. so he was somewhat of a new comer to the whole system. this time it's different. he had a 1st term and then he said 4 more years out of office to get ready for this moment . so i think they, they've hit the ground running and then there's massive support in the us for the things that he's doing right out of the blocks, the 1st 2 and a half weeks. so that you know, the transition was pulling very well. but the execution, the executive orders from the 1st 2 weeks polling extremely well. so, you know, the, i think this is, are there, there's a sign of economic optimism. and if, if he's going to be provocative and aggressive, even with our trading partners,

you know, go ahead, i think people support it. and i think there's 2 things to keep in mind. you know, the each, each country or the case of the, you, the multi left, you know, have one or 2 issues that might, you know, be somewhat disappointing to the, to americans. and, you know, i've got and brought up a good point. you know, there's not a massive amount of, of flo offense at all from, from canada, although every little bit counts and accounts for, for, you know, hundreds of dust in america every year. but that's probably not the top issue. i don't think, you know, yes, there are getting, you know, terrorist people on the terrace was coming through from canada. that's about $1200.00 that were apprehended last year versus only $700.00 in mexico. but i think the bigger issue in canada is the one percent of defense spending one percent of g d. p, a spent by canada on defense. it's, you know, obviously way below the nato, the north north american treaty organization, level of that's required the minimum level of 2 percent of gd piece. where is it

with mexico? it's more the open border and the sense that all the drugs, that's poisoning many americans about $80000.00 per year. that's a much bigger issue then then really any kind of economic challenges. and then of course with the you, they have the same problem. but the european union is only spending, you know, slightly less than 2 percent on average, but most importantly, germany and france are well below their targets. and i think that's disappointing to the president trump in so many in the administration. of course i'm president, trump is objecting to the current trade arrangements with canada and mexico. they all based on something called the united states and mexico, canada agreement, which at the time was described as a historic achievement, the gold standard of trade agreements signed. on january the 29th 2020, a dmitri signed by president donald j. trump of

the that's absolutely right. and i think, you know, without being the charter about it, the president trump is a leader who is very clearly lives in the the moment in some ways. he does not believe necessarily that treaties the us as committed to, including once he assigned himself me, be binding on him in perpetuity, no matter what the lead ha of them says, and that is a trade off. he makes the trade off. he has, he has more flexibility to govern, to make threats as he's currently doing. on the flip side of that, it means that the was a big us as a negotiating partner with whom you can make long term deals. cannot be trusted as much. and for investors, it means when they are looking at where to position supply chain components where to build the factories. one of the things they have to keep in mind is just because of the us says that those factories will be able to get the components they need, or you will be able to sell into them. and just because they've written that down

on a piece of paper with the president's signature at the bottom doesn't mean it will still be true a week, a month, a year from now. it is a choice he's making on that choice has consequences, gavin, i mean, what we've seen in recent houses are full in, in, in, in the prices on the stock exchanges around the world and phone calls between the mexican president and trump, and the canadian prime minister and trump did trump back down old, is this what he wanted and you'll be to achieve any way to spook both of them and have a better than a negotiating position. right. uh yeah, i think it's tricky ground if you want to start to protect it. what trump was originally intended, but i think, yeah, i mean, he got these concessions and i think what do you mostly got is a very public display of these concessions. i mean with canada can seem to do. they were more or less already offering. but, you know, now we have 30 more days of worrying and stressing and renegotiating those costs and the new issues being thrown on the table. so i'll just pick up this idea of nato. i think there's actually

a lot of canadians who are quite sympathetic to the argument that canada should be spending 2 percent to meet as natal commitments. but what i can say is we spent the last month and a half talking about destroying the canadian auto industry. uh, reducing illegal migration from canada and fentanyl shipments from canada. so talking about whether or not american bank skin invest in canada easily enough. and, you know, no one has explicitly linked this nato disk discussion to the tariff war. it's just one of the many issues that gets thrown up every time we talked about why we're, you know, care for with us are almost are for the us. so this it's, it's both achieving goals, but also distracting from goals at the same time i apply for one would love to have a real discussion about whether or not candidates should increase its natal spending. and i find this whole and destroying the community economy thing to be a distraction from it. greg, i mean, you would probably agree with me. i think that the election in november was one in large part because of the economy. and because of inflation in particular,

i've just come back last couple of days from the us. what is a big got full right now about the price of bags. nothing to do with this is to do with blood flow, but is trump signed with fine? if this goes ahead and the price rises in the us, are these poll ratings then drop? yeah, there's a slight risk of that. i think the president acknowledge that over the weekend when he said that people are probably going, you know, will be willing to pay a little more. and i think that's one of the issues that was the other issue that was of utmost importance and the election was the open book. busy her and, and the, and the effects of that open border. and so i think the way the voters look at it is, i thought i'm happy to pay a little bit more for my next getting coffee beans. especially, you know, if, if there's fewer criminals living in my neighborhood and, you know, there were some, and so many of the, the, the initial to deportation flights were not just illegal migrants, but illegal migrants with other criminal records. and so i think a lot of people look at the threat of these terrorist terrace as something they're

willing to live with, the risk of that slight inflation. and then the other point is, you know, the, the, in the 1st term, trump put terrace on a $300000000000.00 or so dollars worth of products from china. there was no meaningful increase in inflation or increase in those prices. what's most important for managing inflation and other one of the reasons one, the election is that the by the administration had absolutely reckless spending that caused the inflation and then of course, hostility to the private sector. so trump, in the 1st term and you'll see it again in the 2nd term, is going to be really deliberate about deregulation. so tax reform and deregulation, that's what keeps inflation down, could, could tire 7 effects on it, possibly, but i think they'll be minor compared to the regulation and tax reform campaign, dimitri, that greg mentions the terrace on china in the 1st. um, of course,

as we've set, set deferred on canada and mexico now for 30 days, but china is going ahead, and china is retaliating with its own terrace of 10 to 15 percent. how damaging is this? so the best chinese count of times seems much more like a shot across the bell than any attempt to do sort of significant loss thing. damage to the us economy in the same way that the 10 percent tariff, the us is just levied on china. we're also not hanging, make a punch, but more of a sort of opening job. 10 percent is not going to be shoot. we cannot make li determinative, but any kind of trade. that's the sort of fluctuations you get with currencies anyway. but it's an opening solver. the chinese count upon who's more about saying, hey, look, we have options to help you. and i think one thing that it's very important that you'll view as understand about any kind of travel situation is that even if you

can hurt your competitor, oh, more than they can hurt you. that doesn't help the people in your country being have. so it'd be why right us coming. can i add something into this because i'd like you to explain this is an expert on trade of it sounds like a bit of job and, but i'm told it's important to de minimis exception, which could actually be quite important. could it not? this has to do with internet shopping, people buying things, particularly buying things from, from china. and a lot of people, us buy a lot of goods that ultimately come from china is absolutely, and this is a complicated issue that i'll try to make it as simple as possible. please. normally, when you ship goods across the board, as there is a lot of paperwork to do, and there are terrorists to pay in many cases. however, one thing that the u. s. and a lot of other countries have is what's called a de minimis threshold, which basically says that if your package,

what's in it is under a certain value, you can skip all of that. the idea is that if you send a box of cookies to, to your mother in the us, you shouldn't have to fill in an entire import declaration, calculate what tower of code that was cookies full on there and so on. except facilitate that kind of trade. however, that system was never designed for the way that shopping works now. and for companies like amazon, cheyenne, or team, or that through millions of small packages, all under that the minimum is threshold at the board as of every country, every day. it's a completely different way of conducting trade. it's no longer a giant container ship for one company, stock full of just washing machines for walmart. it's now a 1000000 different people, small package practices. so one of the things that us is doing a long side raising these terrace is getting rid of that to minimize threshold. it

is basically saying to the likes of shan team or an amazon that if you want to send any kind of package to a buyer in the us, that package and the amount of how small will now have to pay the tower ups. if it's true of a tower report, exactly what's in it and be subject to some additional regulations the way the logic parties with before. thank you very much for me, is binding that to meet you because i think i think that could be quite an important point. gavin, given the experience of canada, trump is now saying hang on your tire. so coming soon, how should the european union do you think, play this one as well? i think the european union braced themselves for a very similar scenario. and if they were to follow a model, i think that would probably be claudia signed bomb and mexico. i think handled the negotiations well from the beginning. i don't think in canada, the trudel government handle things very well from the start. but they handle

things me better than these last couple weeks. and that is that you have to, you know, keep your calm and prepare for the worst, but then also be willing to negotiate back and see if you can avoid catastrophe. i think at the end of the day there probably is certain things the trump administration will accept from your uh, the tricky thing will be figuring out what those are. okay, greg. there are some countries who haven't be named by trump yet. india seems an interesting one, but where you all the u. k. all the just trying to keep the head down and avoid his attention at this point. yeah, i think so. i, the prime ministers is dealing with you right in the european union right now, and i think they have an opportunity here. that's the most important thing to keep in mind is that the president trump has said kind of things about prime minister care storm or in the last few days, even though they're in, you know, political parties with, at the opposite ends of the spectrum. and yet, um, i think president trump has a 1st of all as

a fondness for the u. k. and for the united kingdom, he's always had a good relationship with this country. and secondly, that the, the british are actually meeting the easily meeting the minimum 2 percent of g d p standards in nato. so they're at about 2 and a half percent. and so that's not an issue for the us right now. and then certainly, you know, there, it's an island country, there's no risk of illegal migrants, no realistic risk and illegal migrants coming through the u. s. a. you don't have that issue that the president trump has with canada and mexico. so there's just not a lot of challenges or headwinds. and as i mentioned earlier in the segment, there's these trade surplus between the united kingdom and the united states is relatively flat. so those are all good, you know, good issues or, or, you know, head, you know, tail wins for the united kingdom right now. thank you very much, greg. and thanks to all of all guess today. dimitri cross, they've been sky greg spence and i'm gavin fidel for context. and that'll assist

about trumps tyler. as you'll find much more on our website, i'll just say we're don't. com. what would you like us to discuss next time on the program? we'll welcome your comments and suggestions. use our facebook page. that's facebook dot com, forward slash a j inside story on x. look for us at ha, inside story for me, james phase in the production team here in del hall. please stay safe, bye for now. the the increasing power in africa production most and that is killable. so to use violence in the country that he's rushes presence in the central african republic, a stabilizing force, or calculated strategy for dillman. and this is, of course, the continent. they provide security and they take uranium, they provide security. let me take diamond rushes shadow and advocacy coming soon,

phone out to 0. it's one of the most recognized sites around the world. thing for support from phone and why? what's the funds back home? it's more than just a football club. anyone who says politics should be left off of football and you doesn't know about football, isn't about politics. and this says he's stuck on the passion and the politics of the pool, etc. the defiance joins part of the funds, who make football series on which is the, or the, there's no limit to how a dream contains key stuff in your own event, you know,

counter everything's the real bad isn't in doha, the top story is on, i'll just say that both of us allies on detractors, i've condemned president donald trump's comments about johnson, with some accusing him of openly calling for ethnic cleansing. the us president says he wants to take over the strip and forcibly remove palestinians to us. we'll take over the gaza strip and we will do a job with a to, we'll own it and be responsible for dismantling all of the dangerous, unexploded bombs and other weapons on the side, the level of the side and get rid of the destroyed buildings level of ad create and economic development that will supply unlimited numbers of jobs and how.