JUANA SUMMERS, HOST:
The White House announced new 50% tariffs on a wide array of Canadian goods this week. It ratchets up the tension between the two countries, all while they and Mexico are set to renegotiate the U.S.-Mexico-Canada Agreement - or USMCA trade pact. NPR White House correspondent Danielle Kurtzleben is here to explain it all. Hi there.
DANIELLE KURTZLEBEN, BYLINE: Hey there.
SUMMERS: Danielle, start by telling us about the tariffs. What is being tariffed and why?
KURTZLEBEN: Well, the White House has been straightforward in saying these new tariffs are a way of getting back at Canada. Here was U.S. trade representative Jamieson Greer on CNBC today.
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JAMIESON GREER: So the types of things we're doing are overdue. No one has retaliated against us, except China and Canada. So we're taking a targeted measure to counter that retaliation.
KURTZLEBEN: So in other words, the U.S. tariffed Canadian goods. Canada retaliated, and now the U.S. is itself retaliating, using a section of a 1930 law that's never been used for tariffs before. And in that spirit of retaliation, some of these tariffs are at least somewhat tit for tat. Some Canadian provinces have banned the sale of U.S. alcoholic beverages, for example. So now the U.S. wants to tariff Canadian alcohol.
Canada has also long had these restrictive quotas on dairy imports, and that was even before Trump and his tariffs. So here, the U.S. is tariffing some Canadian dairy goods. But importantly, these new tariffs aren't in effect yet. That happens a month from now.
SUMMERS: Now, Danielle, you said that some tariffs are tit for tat. What other goods are targeted?
KURTZLEBEN: Well, in response to Canadian tariffs on U.S. cars, the administration has a wide range of products they're targeting. There are some types of plywood, essential oils, even tulip bulbs. I mean, really, across these different tariff proclamations, there are long, very specific lists of goods. For example, digging through, I noticed a few very Canadian pieces of sports equipment being tariffed - hockey sticks, ice skates and fishing rods. But that brings me to something important. There's a wide range of goods being tariffed and at 50%, which is high, but it's still not a huge amount of goods.
SUMMERS: OK. So how much is being tariffed?
KURTZLEBEN: Well, Greer's office said that this covers $20 billion worth of goods, which is around 5% of Canadian exports to the U.S. And really, if you look at the biggest exports to the U.S., many of those were already being tariffed or they're specifically carved out here, like energy and potash - that's a type of fertilizer. And the administration has already tariffed aluminum and some lumber and furniture from all over the world. Now, that doesn't mean these tariffs aren't meaningful. Specific industries and businesses could be very much hurt by a 50% tariff.
SUMMERS: So why is the Trump administration doing this?
KURTZLEBEN: You know, I asked Kathleen Claussen this. She's a professor at Georgetown University law school, and her answer was simple.
KATHLEEN CLAUSSEN: I think about them as leverage in the USMCA negotiations because these are areas that have been irritants for the bilateral relationship.
KURTZLEBEN: Now, the first Trump administration, you may remember, negotiated the USMCA as a replacement for NAFTA, and now they're likely hoping these new tariffs will help them get concessions. And again, there's a month until these go into effect.
SUMMERS: I do have to ask you, though, about the politics here. I mean, this is all happening while Americans are worried about the economy, as the Iran war keeps gas prices high, and, of course, tariffs raise prices too. So politically speaking, why would the administration do this?
KURTZLEBEN: You know, it's hard to say because they haven't explicitly talked about the politics. Now, again, they have said this is to get back at Canada. And also, if these tariffs work as leverage, Trump may be able to claim some sort of a win in USMCA negotiations. But this is not the end. Earlier this year, the Supreme Court, of course, struck down a bunch of Trump's tariffs, and he's continuing to try to replace them using multiple other laws. And some of those new tariffs may be coming very, very soon.
SUMMERS: NPR White House correspondent Danielle Kurtzleben. Thank you.
KURTZLEBEN: Yeah. Thank you. Transcript provided by NPR, Copyright NPR.
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