Trade War Escalates; Canada's ‘Biggest Danger’ Still Ahead | Michael Campbell

Michael Campbell (0:00)

That tells me that the debasement trade is the number one guarantee. Do you think governments really are going to get, you know, sound finances as a priority? The public doesn't have it. No sign that the public does. My worry is that he wants to follow the European model, which has been a disaster.

You know, immigration gets a lot of their headlines, but their financial, you know, big state intervention model has failed. The Chancellor of Germany nailed it when he says, you cannot have a monetary union without a fiscal union, without a lot of problems. I don't care whether it's Prime Minister Carney or former Prime Minister Harper. Canada can endure the pain. Well, that's easy. None of them will. Not one of them will endure any pain whatsoever if there's no agreement.

David Lin (0:41)

Mike Campbell returns to the show. He is joining us all the way from British Columbia, Canada. And today's discussion will be centered around the Canadian-U.S. trade deal. Has the relationship between Canada and the US been permanently damaged? Is there any off-ramp of this trade war? We'll find out. And what is next for both the Canadian and American economies alike? Mike Campbell is the host of Michael Campbell's MoneyTalks. Welcome back to the show. Good to see you.

Michael Campbell (1:08)

Great to be here, David.

David Lin (1:09)

I like to start by playing you, Prime Minister Mark Carney's speech.

Or not speech, but he made a video cast about a week ago. I'll just play you this one clip. Take a listen, we'll react together. This is on Mark Carney's own YouTube channel.

Mark Carney (1:24)

McKinley's 50% tariff was meant to pressure us into dependence and eventually annexation by the United States.

In reality, it did just the opposite. Rather than getting weaker, Canada grew stronger. Instead of becoming more dependent, we diversified by changing who we did business with. And at the same time, inflation rose in the United States. They had a financial crisis and a four-year economic depression.

Our forebearers understood that building this improbable country in an inhospitable land wouldn't always be easy. But they also knew that they could rely on one of Canada's strongest traits, resilience. Canada Strong isn't just about withstanding this crisis. It's about coming out of it stronger, more resilient, and more independent than when we started. It's about ensuring that no country can ever hold us hostage, and that we can live how we want to live.

David Lin (2:27)

The government seems to want to make sure to, well, they want to step in and intervene and provide new stimulus.

There's $7.5 billion in new help on top of nearly $25 billion already spent since the trade fight began, well, I guess, reignited, shall I say, early in the summer. Let's talk about what's going on currently with stimulus and react to what we've heard so far with Carney's speech.

Michael Campbell (2:55)

Well, I think you go back just a short while when he said that we're the closest nation to the European Union, and it's clear that that's been part of the agenda. I mean, he was chair of the Bank of England, but his first visits immediately upon winning the election were to England, and so many visits to Europe. Including making a speech this week to the European Union, they make a big deal about it. My worry is that he wants to follow the European model, which has been a disaster.

You know, immigration gets a lot of their headlines, but their financial, you know, big state intervention model has failed. I mean, they're close to IMF intervention when it comes. And the Chancellor of Germany, Friedrich Mertz, I think nailed it when he says you cannot have a monetary union without a fiscal union without a lot of problems.

That story isn't over in the EU. If I have to put money down, I don't think the EU survives in its current form, say another six, seven years in the current form that it's in. But my point is, why are we trying to emulate them? Why are we trying to do the state intervention model to the degree that they're talking about, including with the big Invest Canada Summit, where he says Canada is ready to put a trillion dollars in sort of joint ventures to simplify it. But yeah, I think it's very problematic that he is choosing a model of state intervention that does not have a record of success. It's as simple as that, but that hasn't dissuade them. I mean, they're very optimistic that this time it'll work.

David Lin (4:23)

Can you reference the McKinley terms of the 1890s? And he said that was at the time a road to annexation. Does anybody in Canada actually believe, seriously, that the US, in particular Trump's administration, is trying to annex Canada despite his jokes about Governor Carney and the 51st state and all that?