Western Standard

00:00:00.000 Good evening, Western Standard viewers, and welcome to Hannaford, a weekly politics show.

00:00:21.000 It is Thursday, August 21st. Almost every week since President Trump was sworn in seven months

00:00:27.240 ago, he has announced that as part of his strategy to rebuild America's industrial base, foreign

00:00:33.660 companies and even countries are pledging significant investments in the United States.

00:00:39.780 According to a recent White House statement, these pledges now exceed a massive $8 trillion

00:00:44.740 in just seven months. Since that statement, there's been a $550 billion country-to-country

00:00:52.440 deal announced with Japan. But are these promises leading to real, on-the-ground activity in

00:00:58.860 the U.S.? Is it all a show? Are we about to lose our Canadian automotive manufacturing industry?

00:01:08.520 With me today is Andrew Hale, a senior policy analyst in trade policy in Washington's Heritage

00:01:14.860 Foundation. Good evening, Andrew.

00:01:16.440 Hello. Good evening.

00:01:18.440 Andrew, is this real? When do struggling Americans in the Rust Belt or anywhere actually start

00:01:23.980 getting good jobs out of all this? And is part of the good jobs that they hope to get, jobs

00:01:30.700 that are presently in Canada making motor cars?

00:01:33.860 Well, I think that it takes literally years to build factories. It can take up to 10 years

00:01:41.220 to build a nuclear reactor. So yes, we do want to make more infrastructure here in the United States.

00:01:46.980 We definitely want to expand manufacturing. But I don't necessarily agree with the approach. I think

00:01:52.260 you could do a lot with deregulation here in the United States. To give you an example,

00:01:56.500 in 1990, we had 57 blast furnaces in which to make steel. We're now down to 11 blast furnaces. And

00:02:03.460 that's largely because it's so difficult to build new blast furnaces given the regulations. And even just

00:02:08.500 last year, the Biden-Harris administration imposed new regulations on the emissions of steel production.

00:02:14.820 And steel production and net zero targets don't mix. So we're actually purchasing 40% of our steel

00:02:20.900 from Canada, our refined steel, because in Canada, you have green steel. You're making your steel

00:02:26.100 from nuclear power in Ontario. And of course, the steel and aluminium being made in Quebec

00:02:32.820 with hydroelectric power. So again, if we want to compete with that, we'll have to build new nuclear

00:02:37.780 reactors. But of course, they take about 10 years to build. So I'm afraid it would be better to free

00:02:44.180 up the regulation of a focus on that, as opposed to a focus on the terrorists.

00:02:48.180 Yes. Well, I actually found an article that you co-wrote with Dr. Stern in the New York Post

00:02:56.660 just last year. And I think you made very much that point, talking about the trade in the United States.

00:03:06.420 And we're talking about the US, but obviously, we're a Canadian outlet. I think we suffer from

00:03:11.860 some of the same things in this country. And you made the point that economic gains need to come

00:03:20.180 through merit, not be conferred by government favoritism. Yes.

00:03:23.940 Yes. Do you think that President Trump is actually addressing that? And further on in that same

00:03:34.260 article, you did speak quite positively about tariffs. So when did...

00:03:38.340 Well, I spoke positively about a border adjustment tax, which is a tariff-like tax. I didn't specifically

00:03:44.260 speak positively about tariffs in general. I was specifically talking about a border adjustment tax,

00:03:48.900 which would be like a GST that you have in Canada. Okay. You explained that China routinely

00:03:59.300 violates American patents, and foreign countries often restrict US companies. They restrict Canadian

00:04:07.140 companies as well, and use tariffs and subsidies to funnel investments and jobs out of the United States.

00:04:13.140 Well, I think what Mr. Trump is trying to do is reverse that process.

00:04:20.580 But maybe you think otherwise. Where do you and he part company on this?

00:04:26.900 Well, I was expecting, you know, when President Trump was going to be elected, I was expecting this,

00:04:32.260 which was Ambassador Robert Lighthizer's, no trade is free, Cheney and Gore's taking on China.

00:04:37.780 That's what we were told was going to be the playbook for the Trump administration, number two,

00:04:43.220 second term administration. And Ambassador Lighthizer hasn't returned yet. He didn't,

00:04:47.140 of course, join the first Trump administration at the beginning. There's still time for him to come

00:04:50.660 back. And remember, of course, the USMC negotiations or KUSMA, as you'd say in Canada,

00:04:55.140 were going nowhere. So we were expecting a real emphasis on China. I wasn't expecting a tariff

00:05:01.060 war against all of our friends and allies. And I have to, like I said, I think that's because

00:05:06.660 the driving force is not Ambassador Lighthizer in this term, as he was very much in charge of trade

00:05:11.940 policy in President Trump's first term, we have Peter Navarro. And he basically is someone who

00:05:17.140 doesn't see tariffs as a means to, as a negotiating tool, which clearly they are. But he also sees

00:05:24.820 them as a means to pay off the national debt and raise revenue. And I would like to address that

00:05:29.620 because we have, what, now 37 trillion in national debt in the United States, and you could abolish

00:05:35.140 every government department except the Pentagon and the entitlement programs, and you'd only take off

00:05:40.740 one trillion off the national debt. And tariffs are not going to pay down the national debt.

00:05:48.020 And I would have to address the actual methodology behind this, I think is somewhat flawed. We have

00:05:52.420 to ask ourselves, what was the methodology behind the tariffs against Canada and Mexico, the initial

00:05:57.860 25% they announced earlier this year, as well as the Liberation Day tariffs in April? They did not

00:06:04.100 actually calculate tariff rates and non-tariff barriers as they said they did. Instead, for every

00:06:09.540 country, they just took our trade deficit with that country of only goods and not services,

00:06:14.420 and divided it by the exports to us. And I think it's important to remember that our trade deficit

00:06:19.540 is the flip side of a demand for our assets. So here in the United States, instead of exchanging

00:06:23.700 exported goods for imported goods, we make financial assets. And we all seek foreign investment, but some

00:06:29.220 deride the trade deficits. And to put it in a different way, if you have a capital account surplus,

00:06:34.580 you must have an equal and opposite signed current account deficit. And most of our current account

00:06:38.820 involves trades and goods and services. So in other words, we have an investment surplus,

00:06:43.060 and God help us if we lose that, because that's a sign of a very wealthy country that people want

00:06:47.060 to invest in. Also, proportionally speaking, Americans have more purchasing power, we purchase stuff

00:06:52.420 as a wealthy country with wealthy citizens, purchasing the world.

00:06:55.460 That's okay. Now that's a very degree level analysis, which is what I would expect from the

00:07:01.300 Heritage Foundation. Thank you. But let's bring this back to, first of all, the Canadian auto industry.

00:07:08.660 I mean, the idea, I think, is that if you put tariffs on a Canadian manufacturer, then eventually it will

00:07:17.380 make more sense. It may be a messy process, it may take a little while, but eventually it's going to make

00:07:23.860 sense for the auto industry to establish itself back in Detroit, back at the south of the border.

00:07:30.820 Anyway, Louisville, Kentucky, maybe a lot of them seem to be going there. That's where my car came from.

00:07:37.380 So this, and of course, Canada can sustain an auto industry on its own market of 40 million people.

00:07:47.220 Now, it's messy, but given time, is that actually a viable strategy on Mr. Trump's part? And should we be,

00:07:57.780 frankly, if we're a Canadian auto worker, looking for something else to do?

00:08:02.340 Well, I think when President Trump initially told the auto manufacturers in Detroit they had 30 days in

00:08:07.780 which to rejig their supply chains back in the United States. I think that what wasn't understood at the time

00:08:14.100 was the fact that it takes literally years to build factories, and it takes decades to establish, in some

00:08:19.860 cases, supply chains. And remember that on average, in the auto industry, auto parts crisscross the U.S. Canadian border,

00:08:26.820 on average, five times, sometimes as much as 10 times in the manufacturing process. So we really do need to have

00:08:33.460 no tariffs on intermediate goods to facilitate that process. Already, we've had some bad news in

00:08:40.580 Michigan. They've closed five plants already. Stellantis has closed a plant. And Cleveland Cliffs,

00:08:46.660 the steel manufacturer, has idled one of its blast furnaces. So again, we've had some bad news as a

00:08:53.940 result of this. And this is with most of the tariffs currently being in abeyance. This data came through

00:09:00.740 before we had the full force of the tariffs. So again, I think that as this, we get more and more

00:09:06.660 bad news going forward. If the tariffs are fully implemented and maintained, we will get a recession.

00:09:13.220 And that will, of course, have an effect on the midterm elections next year. And of course, I think

00:09:18.260 a lot of Republican congressmen and senators are being quite quiet now, hoping that the courts will shut

00:09:24.180 down the use of IEPA emergency legislation to implement tariffs. And because they're frightened,

00:09:29.300 they don't want to be primary right now. So again, but I think the markets will be

00:09:33.220 a moderating force because we have had some bad news.

00:09:37.060 So, Canadian auto workers, do they have a career to look forward to or not?

00:09:42.180 I think they do. I think that Canada does need to diversify its trade export markets and not be

00:09:48.020 dependent on a single market like the United States. I would call for that in any situation. I do think

00:09:53.860 Canada is too heavily dependent upon the United States. And remember, Canada does have free trade

00:09:58.820 agreements all around the world. Indeed, I worked on the CETA agreement between Canada and the European

00:10:05.540 Union, so that Canada can take advantage of trade with Europe, Asia, and all around the world,

00:10:12.260 given that certainly the Harper government and others were very activist in promoting free trade

00:10:18.420 and getting comprehensive free trade agreements.

00:10:21.460 They certainly were. I actually worked for Mr. Harper during those years, and that was pretty much

00:10:27.300 all I was writing for a couple of years, is releasing trade agreements. So we were free traders then,

00:10:32.900 we're free traders now, except that we're not dealing with the free trade United States anymore.

00:10:41.220 I have to wonder whether, at a given time, nevertheless, notwithstanding all of the

00:10:47.620 arguments that you've made, the idea of erecting a tariff wall around the United States is actually

00:10:54.580 ultimately going to serve the US well. I wasn't there to listen to the

00:11:02.820 radio broadcast, but we were all taught early on about President Roosevelt, Franklin D. Roosevelt,

00:11:10.500 talking about America as the arsenal of democracy. I don't think that's true anymore. Certainly, that

00:11:20.020 enormous industrial base that enabled the United States to take the war across the Pacific to Japan

00:11:26.500 in 1941, 42, 45. I don't think America could do that today. Do you think it could?

00:11:36.420 Whether it could or whether it wants to, I think if you're looking, for example, I mean,

00:11:40.340 President Trump certainly has had more of a focus on home, as well as not getting entangled in forever

00:11:47.380 wars abroad. Remember, when in his first term, he didn't want to intervene in Syria. To the anxiety of

00:11:54.020 Prime Minister David Cameron, who's very keen to do so, keeping on the Blair doctrine of humanitarian

00:11:58.100 intervention, I think the United States is pivoting its resources more towards Asia. Ukraine is not in

00:12:04.180 America's backyard. And I don't think it's not electorally, you know, favourable to invest in

00:12:11.300 the war in Ukraine, the billions of the Biden administration invested. I think the United States

00:12:15.460 sees more of investing towards Asia, because they see China, the people's world of China as more of a

00:12:20.020 serious threat. So and of course, making other countries pay for their own defence. I mean, Canada,

00:12:26.420 you know, should spend more on its defence, but not just to appease the United States,

00:12:31.300 the United States isn't paying for it. So it can be independently responsible for its own seas,

00:12:36.260 lab and skies, as Stephen Harper recently said. I think that, you know, why should the you know,

00:12:42.820 if you look at just one country in Europe, like, the Kingdom of Denmark, they've have a very,

00:12:47.380 very social, generous social welfare system. And they were able to have that throughout the Cold

00:12:52.100 War to the present day, because they weren't spending money on their own defence, they're

00:12:56.020 relying upon the United States security umbrella. And I think President Trump is right to say,

00:13:01.700 and others say it's time for other countries to step up the plate, because United States does have 37

00:13:06.900 trillion in national debt, which is unsustainable. And we can no longer afford to pay for the entire

00:13:11.700 world security, nor should we. Yes. Well, I must say, Andrew, you're speaking to,

00:13:19.460 speaking to a true believer here, and to a lot of true believers who watch this programme,

00:13:24.180 everybody thinks, everybody except our own government thinks that we should have done more,

00:13:30.420 and should in the future, do very much more in terms of our own defence. Promises have been made to

00:13:37.060 spend enormous amounts of money. It's one thing to promise it, it's another thing to actually do it,

00:13:43.860 to, A, provide the funds, and B, provide the mechanism to buy the equipment. Canada has a very

00:13:50.260 bad record of doing that. But anyway, that's a slightly different project. I'm just trying to focus on

00:13:58.500 whether this actually makes sense for America, given the time, make the adjustments, bring the

00:14:04.660 industrial base back onto the continent, from where it's been. A lot of people will be affected by it.

00:14:12.980 But in the long haul, is this not a good thing to do?

00:14:18.180 Well, I think as if, like I said, I refer to the former, you know, Ambassador of the United States

00:14:23.060 Trade Representative Office, Ambassador Robert Lighthizer in his book and his focus on China,

00:14:27.380 and I would have thought we would be doing this. I actually believe that these duties,

00:14:30.900 these tariffs harm America's global leadership. And it undermines our progress in establishing

00:14:36.180 resilient supply chains in this region, and outside China in particular. I think the trade war

00:14:43.300 also has the potential to push our allies into the arms of China. So for example, if you want to

00:14:49.300 convince the Dutch, the Kingdom of the Netherlands, not to transfer critical chip-making technology to the

00:14:55.060 people of the book of China, don't tariff all their stuff. And I just think that the approach on

00:14:59.860 Liberation Day, by just announcing these tariffs, I've already mentioned, I don't agree with the

00:15:03.940 methodology. But also, I just think with the wrong approach, because we want to trade with these 0.58

00:15:09.460 countries, and have our allies be able to influence them away from and decouple and de-risk for the

00:15:14.260 people of the world of China. And I feel that that actually has had a very negative effect. I mean, 1.00

00:15:21.540 look, if you look at some very, very hyper-protectious groups like Coalition for Prosperous

00:15:26.740 America would be one of them. And actually, their head of the trade program is actually Canadian.

00:15:30.660 And he said to me, he says, oh, I think Canadians should just buy local, and Americans should just

00:15:34.500 buy local. Look, we're not going to build factories here, for example, to make rope. We wouldn't even

00:15:39.300 employ people to do that. We would just automate that. It's best that we purchase rope from India,

00:15:44.020 or Africa, or somewhere else. We can buy legacy products from other countries. We don't want

00:15:49.060 Americans to all work in those factories. And often cases, we wouldn't even employ Americans to work 0.99

00:15:53.140 with factories. We would just automate that. And of course, the unions are opposed to automation.

00:15:57.940 So I just don't think what they're talking about being a sort of totally self-sufficient

00:16:03.860 United States is possible. What we do want to do is near shore and friend shore, away from the

00:16:09.940 People's Republic of China, and trade with our allies and friends like Canada, not tariff them,

00:16:15.620 and declare trade wars on them.

00:16:17.140 Okay, fair enough. Point well made. Now, let's turn back to Canada. You've lived in Canada. You

00:16:22.580 have strong Canadian connections. I even went to school here. So you understand the situation very

00:16:28.020 well. You know how we think north of the border. And of course, you're working for the Heritage

00:16:32.260 Foundation. So you're very au fait with how things are done in Washington. Andrew, if you had 10 minutes

00:16:40.020 with Prime Minister Carney, and he were to ask you what you thought Canada should be doing, how we

00:16:47.780 should approach this situation, what would you tell him? I would say give up the net zero scams. I would

00:16:54.420 say give up all of the ESG and DEI programs. I just feel that there's too many navel gazing on what I would

00:17:04.980 call luxury beliefs. And net zero targets, manufacturing don't mix. I call it not zero.

00:17:12.660 And I think that's going to be a huge problem going forward between, and it has been, between

00:17:18.020 the Trump administration and the current liberal government in Ottawa. And it's obviously caused

00:17:23.300 friction between the aspirations of provinces like Alberta and Saskatchewan and the federal government in

00:17:30.820 Ottawa. I just feel that there is an obsession with net zero targets. And really, it's counterproductive.

00:17:37.620 I would say to Prime Minister Carney, look, your windmills, your solar panels are being made in China,

00:17:44.100 and they're building two new coal fire power plants a week. And it's the dirtiest coal in the world.

00:17:49.860 So good luck with that one. That is not helping the environment. So I agree with President Trump when

00:17:55.860 he says, drill, baby, drill, we have false natural resources here in North America. I believe in,

00:18:00.500 you know, we have this, I believe that the United States should be purchasing Canadian

00:18:04.020 energy as we do. And I believe in a great single market here between, under KUSMA, between Canada,

00:18:11.540 the United States and Mexico. And I think that we need to build pipelines as well to export that energy

00:18:17.780 down here in the United States and abroad. Obviously not be totally dependent upon the US market,

00:18:22.420 but also open up markets abroad for Canadian energy. And I know that on the provincial level,

00:18:26.980 there's been a lot of outreach and that's being done. I've spoken to Danielle Smith. She's doing a

00:18:30.580 great job as Scott Moe is doing as well in Saskatchewan. I would just simply, I mean,

00:18:36.100 I think that would be fallen deaf ears to finish because I mean, Mark Carney's wife, who's brilliant,

00:18:40.500 she works for the Eurasia Group, as does Gerald Butts. They're brilliant people. But I think this

00:18:46.420 obsession, which is almost like a new religion with these people on ESG is just really a non-starter

00:18:53.140 for discussions between the United States right now and Canada under the current Trump administration.

00:18:59.860 Okay. Just for the benefit of people who don't keep up with acronyms, I think a lot of people know

00:19:04.100 what ESG is something that's not good, but environmental, social governments, how does that

00:19:09.780 actually interfere with what Canada needs to be doing now to get his house in order?

00:19:18.260 Well, I mean, so with regards to the net zero targets, I mean, net zero targets in manufacturing,

00:19:25.700 as I already said, don't mix. They kill industry. I mean, right now, Canada has very, very high energy

00:19:33.220 to a degree and a much higher, for example, Europe has literally outsourced much of its manufacturing

00:19:39.700 to China. And of course, the energy, the United Kingdom has some of the highest energy in the

00:19:44.420 world now, and it's killing what's left of British industry. I was speaking to an auto manufacturer,

00:19:51.780 parts manufacturer in Northern Ireland, and he showed me his energy bill. And I just was shocked

00:19:57.060 that compared to the energy prices we pay here in the United States. And so basically,

00:20:02.820 if you want to engage in that ESG, and Mark Carney has even written in one of his books,

00:20:07.540 that to achieve these net zero targets and goals, and to fully implement ESG and make it a success,

00:20:14.020 there has to be, we have to become poorer. And we have to, there will be losers. I don't agree with

00:20:18.820 him. I don't, like I said, this is, it's not just, it pollutes and poisons everything. So for example,

00:20:25.940 just last year, in the United States, we were trying to renew the generalized system of preference,

00:20:31.620 which is a trade preference program for developing countries. And we had the Democrats in trying to

00:20:36.660 impose ESG regulations in the renewal of that legislation. Now in India, gender parity requirements

00:20:44.580 perhaps wouldn't work culturally. In Africa, LGBT requirements perhaps wouldn't work culturally either.

00:20:51.380 And the environmental regulations would make this trade preference program so prohibitively expensive

00:20:58.340 for these, these developing countries, people will just trade with China anyway. So again,

00:21:03.220 I just don't think it's feasible. It's, it's, it's, and I quite frankly, I don't actually believe

00:21:08.100 in the climate hysteria either. Well, I think you're, I think you're speaking for a lot of people who

00:21:14.180 watch this program. And those are exactly the prescriptions that we, that, that, that we offer

00:21:21.060 here through the Western Standard. Let's get rid of the climate change nonsense. Let's get rid of the ESG,

00:21:27.220 the DEI, and concentrate on doing a good job of what we do best, which is producing energy and exporting it.

00:21:34.020 Uh, Andrew, this has been a great conversation. I really appreciate you taking the time. The Heritage

00:21:39.060 Foundation, of course, is a, is a really good, good group. Uh, congratulations on, uh, being a member

00:21:45.940 of that. And, uh, I want to thank you again for coming on and, uh, explaining some of these basic

00:21:52.580 things to us. Thank you so much for having me on. It's been a pleasure. It has been a pleasure.

00:21:57.300 For the Western Standard, I'm Nigel Hannaford.

HANNAFORD： American advice for Canada's PM - 'Get rid of DEI!'

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