'We're back in a trade war:' Hockey sticks, alcohol, more, hit with Trump tariffs on Canada

**Christy Strawser** (0:00)
This is On Deadline, where the biggest stories, the smartest journalists, and the conversations that matter come together from Audacy news stations across the country.
When news breaks, the story doesn't stop there. I'm Christy Strawser. Let's get started. The War of Words.
President Donald Trump has been unleashing on Canada for months, and even years, was stepped up when he declared a 50 percent tariff on $20 billion of Canadian exports. This came amid trade talks, meant to persuade Canada to remove some of the retaliatory measures that had taken against other tariffs Trump introduced last year. The president managed to level up from there, saying later, the United States is key to Canada's survival. Someone should get these clowns to fall in line or, the consequences for Canada will be far worse, he said. Here's WWJ in Detroit.

**Greg** (0:53)
Managing Director and Portfolio Manager for Ankora Holdings, David Sowerby, joining us on WWJ now to discuss the economic consequences of these tariffs and good afternoon, David. Thanks for being with us to try to explain this. Tariffs seem a little complicated to us as as consumers. So what does it mean to us?

**David Sowerby** (1:13)
Greg, let's keep it simple. Always. It's a tax. It's an indirect tax that reduces your purchasing power. It restricts the ability to have free choice. And for both Canada and the US, all you have to do is simply look at that magnificent Gordie Howe bridge, which was built because of the strong trade between the United States and Canada.
And if we're not helping trade flows that constructed this fantastic bridge between the US and Canada, Detroit and Windsor, it's a tax.

**Greg** (1:49)
What does this mean for the Michigan economy? Obviously, David, we have a very strong connection that Detroit, Windsor, US, Canada, connection, as you mentioned, the bridge, a physical connection. But a lot of goods go back and forth across the two countries, right?

**David Sowerby** (2:06)
Absolutely. Michigan is the number one trading state with Canada easily. And when you think about Michigan's economic fortunes, this is going to dilute it. It's going to reduce the ability of trade to flow freely.
That the North American Free Trade Agreement, ratified and modified as the US., Mexican-Canada Free Trade Agreement, those are milestones for allowing free trade to flow, particularly between the US and Canada. This is not helping it because the US establishes tariffs. And what does Canada do?
They have to punch back. And they're doing it by putting tariffs on steel, dairy, appliances, agriculture, all these items that flow freely between the US and Canada. We're not helping our economic prosperity with this type of policy.

**Greg** (3:03)
Hear about tariffs a bit, but 50% really seems like a big one. Can Canada withstand that?

**David Sowerby** (3:12)
Canada can't. Canada will be able to absorb it. The US will be able to absorb it. What it does is it slows down your speed limit for economic growth.
It slows down consumer purchases. As I said, it's a tax. And at the end of the day, if you look at world competitiveness, Canada already is a more free trading nation than the United States is, based on some of the best research. We're not helping ourselves get more competitive. A manufacturing midwest renaissance that's been quite positive for the last 15 years, we're putting a stop sign in front of that manufacturing renaissance that's benefited Michigan for a number of years.

**Greg** (4:02)
Not to get too political here, but President Trump claims that the tariff is a tool to use to make the other side pay more, that the people in Canada are paying these tariffs. Actually, we're paying it, aren't we?

**David Sowerby** (4:17)
We're paying it. Companies get imposed on the tariff, then they decide how much do they absorb, how much do they pass on to the consumer, so it becomes a tax. For some of the good things that this administration has done on better tax policy, more sensibility on regulatory issues, all very important to Michigan and Metro Detroit.
The tariffs, sadly, haven't collected the revenues the president has proclaimed. And in economic terms, I used to teach economics back in my day, on the tariffs, he gets a D. On tax and regulatory policy, you can get a B plus, maybe even an A, but the tariffs, he gets a D.

**Greg** (5:04)
It does seem perplexing because the courts already ruled against his first round of tariffs, and the government actually had to repay, I think, billions of dollars to the companies, right, that had been charged these tariffs.

**David Sowerby** (5:16)
Actually, it's been in the billions. We've seen it with second quarter earnings for companies that I own that they've had relief from the tariff relief, whether it's General Motors, Ford, Home Depot, you name it. Anybody who had to pay a tariff to import non-US products, they've gotten a relief, rightly so, because going back to the announcement of those tariffs in the spring of 2025, the stock market certainly didn't like it. It dropped 15 to 20% in some cases before eventually there was greater sensibility instilled on the president by the Treasury Secretary.