Canada taxes back

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Kristin Schwab (1:02)

A tariff here, a tariff there, a tariff tit for tat. Are we officially in a trade war? From American Public Media, this is Marketplace.

In New York, I'm Kristin Schwab in for Kyra's Doll. It's Tuesday, September 8th, and it's good to be here with you.

So governments usually do not formally declare a trade war. There's no document or anything, but there are tariffs. And today, Canada imposed a bunch of them, ranging from 15 to 50% on American products, including steel, paper, electronics and dairy. The country says it's responding dollar for dollar to tariffs the US placed on Canadian goods last month. Canada is our second largest trading partner, right after Mexico. Our economic relationship goes as far back as, well, pretty much since we've been neighbors. Marketplace's Stephanie Hughes starts us off with some historical context.

Stephanie Hughes (2:08)

The geography of North America kind of wants the US and Canada to be trading partners. Historian Andrew Holman points out major mountain ranges and rivers run north-south on the continent, and that lends itself to trade.

Andrew Holman (2:20)

But I think that there's something bigger here as well, is that Americans and Canadians for all their differences have the same kind of character.

Stephanie Hughes (2:29)

Holman, who grew up in Ontario and now directs the Canadian Studies Program at Bridgewater State University in Massachusetts, says there's a cultural affinity between the two countries, along with similar consumer tastes. You could say they grew up together.

Andrew Holman (2:44)

They know one another despite the fact that Canadians complained from time to time that Big Brother should know more about Little Brother.

Stephanie Hughes (2:50)

Like siblings, the two countries have often fought as they've traded stuff. Holman points to the 1870s when Canada's first prime minister, John A. MacDonald, put in place something called the National Policy, which included a protective tariff.

Andrew Holman (3:05)

So that manufacturers in Canada would be protected from competition from external producers. And the United States, of course, followed suit not too long after.

Stephanie Hughes (3:16)

In 1890, then-Ohio Congressman William McKinley, who later became president, led an effort to pass a law that commonly became known as the McKinley Tariff.

Susan Colburn (3:25)

Which raised import duties sometimes up to about 50% on Canadian goods.

Stephanie Hughes (3:31)

Duke historian Susan Colburn says it was seen as a way to protect American industry, but some US policymakers also thought of it as an inroad to potentially annexing Canada.

Susan Colburn (3:42)

Prominent American politicians talked openly about how these trade policies could be used to soften up Canada and bring it into the union of the United States.

Stephanie Hughes (3:55)

Which, she points out, has echoes in the rhetoric taking place now.

Susan Colburn (3:59)

Like when Vice President Vance describes Canada as a state and then claims that's a Freudian slip.

Stephanie Hughes (4:05)

But a lot of things about the trade war now are unprecedented. I asked historian Andrew Holman how the current moment compared to prior fights over trade.

Andrew Holman (4:15)

Historians like the old adage that history doesn't repeat itself, but sometimes it rhymes.

Stephanie Hughes (4:20)

This, he says, doesn't rhyme with anything. I'm Stephanie Hughes from Marketplace.

Kristin Schwab (4:26)

Wall Street Today, oil prices went up, so you can guess where stocks went. We'll have the details when we do the numbers.

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Local communities are mostly saying thanks, but no thanks. Monterey Park on the east side of LA County, it's become the first city in the US to ban data centers. That's been entirely due to the efforts of a group of residents called No Data Center Monterey Park. KCRW's Brandon Reynolds has the story.