But, you know, so states on the border and then also the auto industry, are they caught up in this, in the tariffs, or are they, like, excused because it's so integrated?

integrated?Well, we, we do have an issue with the auto tariffs in particular, and, and from, being from Michigan, I'm sure you've heard a lot about this from your family members as well.

There are separate tariffs on automobiles and auto parts, and that's under a very different tariff statute called Section 232 of the Trade Act of 1962, which is about sort of national security reasons that you would impose tariffs.

And so we have these tariffs in place there, and also on trucks as well.

And so this is actually one of the main reasons that the talks broke down with Canada, because Canada actually produces a lot of light and medium-duty trucks.

They produce the Ford Super Duty trucks, for example, in Ontario, and those then get shipped to the United States and, and bought here.

Now, if you have a tariff on trucks which is 25%, that is a very high tariff and will make it very difficult for Canada to actually produce those things and sell it to the US.

[laughs]

I'm wondering how this is sort of landing in the United States this weekend.

Well, I think for most Americans it was a, a shock that these tariffs actually went into effect.

Uh, a lot of, uh, folks were thinking that this would pass, like, like most things, that, that Trump would change his mind and, and we would get a deal.

Uh, and I think we were all carefully watching Carney's speech, and in fact, that, I think, is gonna be studied for a very long time.

I mean, and I would just make a, a few points about that too because Carney clearly laid out something that other allies have not been able to do.

Uh, he said Canada's able to withstand the pain, and he said a quiet part out loud that many had been thinking, that a deal with the United States is no longer a guarantee, and he walked away.

And I think this is something that Americans have understood and are frustrated with.

What were you hearing in that?

Are these countries, in fact, using forced labor? Is there any truth to that assertion? And if not, are we potentially looking at another rollback and another round of refunds down the line?

Well, the administration is claiming that countries that it alleges are accounting for nearly all these US imports have failed to implement or enforce effectively prohibitions on the import of goods into their own countries made with forced labor, claiming that those products then make it into the United States market.

The apparent goal, I would say, however, is not really dealing with forced labor necessarily.

It's to establish a new tariff baseline to replace the one that was struck down by the Supreme Court earlier this year.

Now, if you're looking at the investigation that took place, it was a very quick investigation.

They usually take much longer than what we've seen so far.

There is a question about whether or not countries that are meeting some of their own legal requirements in, in enforcing, uh, these bans on, on goods of forced labor could have these tariffs removed or not.

Does the bill say which countries we're talking about here?

(laughs) Anytime.

Um, Smoot-Hawley, an important point of American history that I think is something that a lot of trade, uh, experts are kind of looking at today as that moment in time which helps us kind of understand what we might be going through, uh, in the coming months and years. You know, Smoot-Hawley is the closest historic example that we have today to the protectionist push that we're seeing, uh, under President Trump. You know, the, the Smoot-Hawley tariffs were a major shock to the economy, and they pushed the United States deeper into the Great Depression. Uh, and President Hoover on the campaign trail said that he would impose limited tariffs, but obviously you say you wanna do something limited, and then Congress gets involved. And so you had a lot of logrolling that led Congress to, uh, put in place a lot of expansive tariffs on agricultural goods and industrial products across the line, uh, and it wasn't until this episode that Congress later on began to delegate some of its tariff authority, uh, away to the president, uh, because they obviously bungled this quite badly. Um, so what happened? As you heard, uh, on, on the clip, uh, Smoot-Hawley caused US trade to collapse with the volume of imports dropping by 41% from 1930 to 1932, and a reduction in US gross national product to the tune of 29.8%. So, this is something significant that also had a lot of retaliation from our trading partners that only made things much worse.

Well, talk a little bit more about that, like how we were involved in creating the World Trade Organization and, and what happened to it 'cause it seems to be kind of toothless at this point.

Yeah, no, the World Trade Organization, uh, was an idea that, that came out of, uh, sort of the fallout from, uh, the Great Depression and Cordell Hull was one of the, uh, idea makers there. And his ideas were based on three kind of general principles and beliefs, uh, that domestic and international prosperity are interlinked. Uh, so if other countries do well economically, we do too. Uh, that trade institutions themselves are important because they support the rule of law and that having a global set of rules would prevent economic coercion that often led to conflict. Uh, and thirdly he believed that globalization would be a tool for advancing the wellbeing of the poorest in the world. Uh, and we've seen this happen. From 1990 to 2019, the share of global population that lives below the poverty line, uh, decreased from 38% to, to 8.9%, so that's a significant achievement. Now, I think the World Trade Organization has done a fairly good job, uh, of ensuring that trade is facilitated, uh, and that even the poorest countries have access, uh, to d- a lot of developed markets and that's fantastic. But the challenge has been that there have been concerns over the fact that certain rulings that the World Trade Organization has done through its court system, um, have been unfairly targeting the United States. And so there are specific things that the United States has been concerned about, um, that they think that the World Trade Organization essentially limits their ability, uh, to have a trade policy that they want. Um, so I think there's a lot of debate about this. Uh, I would say that overall, the World Trade Organization has served the United States pretty well. Everyone abides by the rules that we ourselves created. Um, and there's room to actually modify that, but both the Trump and Biden administrations, uh, failed to reform the WTO rules in a way that would effectively address some of these grievances.