The Trade War Canada Can’t Afford to Lose

“If you think the U.S.–Canada trade fight is about milk and maple syrup, this podcast makes it brutally clear—it’s about a $200B manufacturing dependency and a government that walked into negotiations holding a hand of wet paper.” We tear into the debates around Trump’s new tariffs, arguing that while Canadian media frames it as political bullying, the real story is structural: Canada ships “75% of everything it exports to one customer—the U.S.” and Carney walked into talks “holding manufacturing 200 billion a year and ships it almost in only one direction.” We blast Ottawa for misplaying its hand, pointing to contraband cigarette factories, border failures, and premiers freelancing on national trade policy. Meanwhile, the U.S. media ignores the stakes entirely, even though the auto sector, dairy access, and liquor distribution are deeply intertwined across the border. At the, “Canada has no leverage… Canada has gotta come in hat in hand to Mr. Trump.” This isn’t a trade spat—it’s a reality check for a country that can’t afford to lose its only lifeline. 

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Transcript

David Returns And Sets The Fight

SPEAKER_01 0:03

Oh, David's back. This is gonna be a fucking hilarious. I love it. Oh David. Oh David. I'm so happy you're back. I'm so happy you're back. This is gonna be a flippin' blast. Yeah, yeah. David, I want to just talk over you. Hold on. Before you talk over me, I just no no I want to talk over you.

SPEAKER_00 0:24

Okay, you know, guys. I went away from you. Welcome to the Stuart Network. Go ahead, please, Stuart. Thank you. I want to start this and then give you a second.

SPEAKER_01 0:35

Go okay. I'm ready to go. It's been a minute since David and I have just totally taken opposite chairs in a conversation. And you know, David likes to rant that I don't care anymore, or I don't see outside of my blinders anymore, and that the news that I see is my opically American only. And that's David's thesis on this topic today. But I'm gonna let welcome him back. Guys, welcome to the Rant Network. Yes, it is uh political, non-political, what we care about, what we you don't care about, what you care about, what we don't care about, type of podcast that's been going on for nearly seven years. I know, isn't that amazing, David? You know, every Monday, Wednesday, Friday, David and I get on and record unfiltered, unmeasured, unedited nonstop. And what comes out of my mouth and what comes out of David's mouth, let me tell you something. Sometimes there is a little regret, but I never have regret guys. So let's let's just sort of know that.

Trump Tariffs And Media Attention

SPEAKER_00 1:52

David, welcome back. Thank you, sir. It's so good to be back. And you know, Stuart, one of the things that's interesting is that while you're away, I was away, whatever, Donald Trump suddenly slapped another tariff on Canada. And he says, if by August 19th you don't come to a deal, I'm gonna smack you hard. And that really rocked Canada. There's a lot of internal stuff that you guys aren't hearing south of the border. But what surprised me a little bit is certain media outlets think this is a story, and others are looking like the Trump derangement syndrome just keeps on shocking me. But honestly, Stuart, there's a belief that Canada's meaning, you have this belief that Canada is meaningless to the American economy. What do you have to say about that, sir?

Stuart’s Case On Canada’s Weak Hand

SPEAKER_01 2:45

Okay, okay, okay. First of all, to all my friends that are north of the border, maybe you'll decide and get the hell out sooner rather than later. All right. Well, I'm sorry, I'm monologue like this. Let's deal with the facts because the facts are all economically driven. Canada gross domestic in the 2024 last published year is $2.2 trillion. The United States is nearly 14 times more. And if you understand what the size of the entire country is, you'll understand that it's really equivalent to a small to mid-size American town, city, state. Nobody in America is losing sleep over Canada's dairy quota. Nobody. Not one working American parent lying awake tonight worried about the price of milk in Manitoba. And by the end of this, you're gonna understand that it's not bias, David. It's mathematics, and it's also Mark Carney's fault. And you know, before Mark Carney, it was a guy by the name of Justin Dancing Bieber Trudeau. Here's what actually happened this week. Trump paused new tariffs on Canada for three days. Said a deal was close. Reuters reported, Kearney himself admitted the key work remains on finalizing anything. Quebec's premier, not even the prime minister, a provincial premier, went on the record saying talks are far from over. That's the entire story, vague optimism on a three-day pause. And the prime minister, who can't get his own trade finalized with his own provinces, are out there talking on his behalf, whether it's the Quebec government aiming for another referendum or the West Coast wanting to separate from the East Coast. Let's talk about why Carney is losing this because it's not close. The Washington Examiner published a piece this week by Joe Jrogan, former domestic policy counsel under Trump, laying out exactly what leverage the U.S. actually has here. And it has nothing to do with dairy quotas. Canada has a contraband cigarette problem so severe that untaxed smokes account for up to 52% of all the cigarette sales in New Brunswick, 45% in Manitoba, 38% in Ontario. The RCMP itself estimates more than 50 illegal cigarette factories operate in Ontario, Quebec alone, feeding off of the 300 unregulated smoke shacks. In one month this spring, that's one month, a Canadian task force sees $4.3 million of contraband and cigarettes in four separate bus, one of which involved a Canadian customs agent helping running the entire operation. Now, let me try this in. Why you want to talk about the border integrity with David? Canada's own customs agents are its own smuggling ring. And it isn't cigarettes for cigarettes' sake, it's U.S. trade rep Jamison Greer that has made it clear that tariffs are staying on the table specifically because Canada's inability to police its border undermines the premise that it's trustworthy under the USMCA partnership. CBP's destroyed Detroit sector now leaves the entire northern border in drug seizures. 150 seizures a year across Michigan, Ohio, Indiana, and Illinois. This is the actual leverage, not milk, not whiskey, David. Border security failure married to a 200 billion manufacturing sector that can't survive without the U.S. market access. Because 75% of everything Canada exports goes to one customer, the US. That's a number that matters. 75%, David, statistically, factually, uninarguably, the basis of all of this. That's the number that matters. Kearney isn't negotiating with a partner who has options. He's negotiating for a country that exactly one customer, three-quarters of what it makes, and what customers just found out, Canada can't even keep its own customers, custom officers from running contraband. Mark Kearney didn't walk into this negotiation holding any fucking cards. He walked in holding manufacturing $200 million a year and ships it almost in only one direction. And though that it was leverage instead of dependency. Here's where Carney actually overplayed, and the country, Canada, is paying the price. Instead of coming to the table quietly, cleaning up the enforcement mess, instead, matching U.S. inspection technology at the border, shutting down the smoke shack pipeline, actually building a joint task forth with Washington. That's all they've been asking for. Carney went public. He let it become a political spectacle, TDS. He had a provincial premier relay an alcohol ban instead of raising it himself, man to man. He let Quebec Premier get out ahead of him on a camera saying talks are far from over. Like that's a Canadian talking point instead of an embarrassing admission. Every single public move Kearney's government, Trudeau's government, has made this week and weeks previously, signal a government that thinks via visibility equals strength. It's the opposite. Trump paused the tariffs for three days as a courtesy, not because he blinked, because he can afford to wait. Kearney, representing his own manufacturing base, is bleeding 75% dependency ratio. And he's outdoing it diplomacy through premieres and press leaks instead of just fixing the smokestack. Washington has been flagging this trade for months, David. And I know you want to start ripping back on how important this trade is to the U.S., but let's be brutally honest. 90 cents of every dollar is attributed to U.S. economics in Canada. No other country, no other partner, no other neighbor comes close. I know you want to be on the front page because what's happening in your backyard, but American media doesn't ignore this out of malice. It ignores it because the story isn't a US-Canada trade war. The real story is country with 75% of all the customers that export, it can't wait for the customer agents to let it go. It's the prime minister that's trying to negotiate.

David’s Rebuttal On Real Trade Pain

SPEAKER_00 10:46

Okay. That's the headline. Are you done at your smokestack? Is is is is exactly that. It's a smokestack. It's a beautiful angle that has absolutely nothing with what I wanted to drive today. No, actually, Stuart, I actually never used the word leverage. Even in the green room, I never said that. My comment to you in the green room was the American media doesn't give a shit. And I'll explain to you what the problem is, Stuart. Because you went down once again, your typical, let me shit on Canada, the United States is gold. It's not true. No, it's not. Whoa, whoa, whoa, whoa, whoa, whoa, whoa. This has got, you know, the whole idea that this has got to do with custom border smuggling and all that, not even close. Let me put the numbers on the table for you, Stuart, because you keep you are a factual guy. The United States imported almost $454 billion and exported $426 billion to the Canada with Canada last year. We are the second largest trading partner. We used to be the first one. Mexico's taken on that one. Now, to sit here and to say that we're the second largest trading partner, doesn't, I'm not talking about dependency. We're talking about economics and industries that are impacted by that, right? So when you look at that right now, you're talking about industrial supplies and materials, automotive vehicles and parts, capital goods. You're also talking about an industry like liquor. Now, here's the thing that you keep, you keep you kept telling me is like, listen, David, doesn't make like, what do you, what do you, where are you going with this? Listen, $55 billion. You know, we the can the auto industry and the US industry are so tied in in Canada and the United States that literally what Trump did was unravel it after 60 years of of bringing prices down. He now slapped the tariff that the auto industry, not the country. Yes, Canada's a pimple on everybody's ass. Yes, we're a tiny country, yes, our economy is in the shit. But I'm talking about the industry side of things. And the auto industry has looked at this and going, are like there were lost car sales in Canada, there was increasing costs to parts into the United States, also from Mexico, but just let's talk about Canada. And the reaction from the media has been, what? That's my point. U.S. spirits to Quebec to Canada has been down. It's down, was down, you know, in one point, just to give you an idea, it was over almost $300 million worth of spirit sales to Canada. It went down $60 million. Now you're saying $60 million is no big deal. But where does where does the when especially liquor, when it's so hard and so controlled, when it's taken off of eight out of 10 provinces' shelves, it does have an impact on the liquor industry. And believe it or not, yes, some of the bluster that your your your your president is using is the liquor industry. He wants liquor on the board on it on it. Now, let's go back to a comment you made where I do agree with you 100%. Mark Kearney and Justin Trudeau put us into this hole. Now, Trudeau negotiated the USMCA back in in back in Trump v1, and Trump called it the greatest deal ever negotiated, right? I love that. Then Trump comes back and says, this is the worst deal for the United States. We got to tear up USMCA and start all over again. Typical Trump bluster. We know those of us who actually do pay attention, Stuart, know that that's Trump's way of negotiating, trying to win it, win it something, whatever. But here's where he misfired, okay? Is that blue states along the Canadian-US border that do depend on Canada? And you talked about dairy and says, who gives a shit about the price of milk in Alberta?

Dairy Quotas And Political Theater

SPEAKER_00 14:21

Is the wrong angle. The problem is that the dairy market in Canada is close to the United States and to the rest of the world. There's a very tiny opening, Stuart, in which the dairy industry wants to get into. We're not talking about 50% of American sales is going to go to the United States, is going to go to Canada. But when you can impact an industry by 5, 10% up or down, that is an impact. I'm a sales guy. I'm a business guy. I look at it from that perspective. If you're telling me that the I can't sell yogurt, cheese, milk to my neighbor, and we're talking about my neighbor on the other side of a Canadian-US border because of some idiotic, outdated protectionist policy that's been here for decades, Stuart. Conservatives, the liberals have tried to, well, not the liberals, the conservatives have been trying to break the dairy farmers' lobby here. You think that you have a hard, tough lobby in the US. The dairy farmer lobby and the egg farmer lobby in Canada is obscene. And ever since the first US-Canada trade agreement back in back in in Mulrooney's days, Stuart, it's it's an impossible to crack. Wisconsin, New York, Vermont, amongst other province uh states, are begging to crack that nut. Yes, do we in Canada? Are we a pimp our tiny economy? Yes, we're a falling G7. We're falling, we're failing in productivity, we're failing at the now. Let me talk about the negotiating, Stuart. Because listen, Stuart, I watched the time. Give me a minute or two. I know your I know your smoke stock. You want to go and you want to talk about cigarettes. No, I was gonna go right back to liquor, right? Stuart, you went for almost 10 minutes. I want to get my point across. Mark Carney is one is is was elected thank in part and part and part to thanks in part to Mr. Trump, who said that Carney would be a better negotiator than Polyev. He was right for the United States. Mark Carney has spoken from both sides of his mouth, let alone from his ass as well. Mark Carney has gone out and say, I'm gonna be tough with Trump. There are absolutely recorded statements by Mark Kearney talking about how he's gonna treat Trump. And according to the Manitoba Premier, Stuart, I don't know if this is part if you if you saw this in your in your in your media feeds, but according to the Manitoba Premier, Mark Carney practically begged, begged all of the provincial leaders to let liquor back on the shelves in their in their liquor stores. Now, when that happens, where's the negotiation? Where is the leverage? Canada has none. Stuart, in that case, and that's why I wanted to finish with this: Canada has no leverage. Canada has got to come in hat in hand to Mr. Trump and say, what do you want? We'll give you something. Because Canada, without the United States, will fall apart. In the last 18 months, Stuart, Canada has done a better job of diversifying its trade beyond just the United States. Dependency on the United States has gone down significantly. There are new trade deals in the since since Stephen Harper over the last 15 years. There are new trade deals. Trudeau screwed around with India. Trudeau screwed around to hurt it. Mark Carney has repaired many of those broken deals and whatever. And their diversification is starting to occur. But ladies and gentlemen, the Canadian market without the U.S. market is a we're done. We cannot survive with it. No, you will let me finish. You rented all week. I want my chance. The United States is Canada's lifeline. Trump's right. Canada cannot live without the United States. And Mark Carney, who on one hand, where the media has to cover him in a positive light, continues to say, I will be tough. And I will sudden, you know, Dominic LeBlanc, who's our our head trade, you know, our trade negotiator, and he comes in. And basically, the reason we have a three, we had a three-day stall, Stuart, and not on August 19th, where we've slapped Silly, is for one reason, one reason only. Canada's prepared to buckle. And they just we're just putting the fine print on where we're gonna buckle. Trump won, Stuart. Trump knew he had all the cards. Kearney pretended he had the cards, and now he has to fold.

Spirits Numbers And The Final Dispute

SPEAKER_01 18:38

All right, so I just want to guess fact check just to clean this up. And it's not a Democrat fact check, it's it's actually a statistic. Liquor spirit industry shrank in the United States by 2.2 percent. It fell approximately 36.4 billion. Okay. Actually, the increase of volume of liquor went up 1.9%, which distinct which statistically means that alcohol is more alcohol was sold, they just bought less expensive products versus more expensive products. The US spirit export fell 85% just in the end of 2025. You know, Canada reportedly declined more than 70 percent. The US total exports worldwide fell only 9%, which include what little Mark Kearney thought he can do. Listen, the issue with Kentucky, bourbon, whiskey, and other spirits is far from Canada and Canadian shelves and the alcoholic consumption of Canada, it directly is correlated to millenniums just don't drink like David Xers, you and I did.

SPEAKER_00 20:01

No, this is just actually always you you think you did. You hear my statement?

SPEAKER_01 20:06

Yes, and I know you get actually heard in talking about it. They took the bottles off the shelf. No one gives a shit.

SPEAKER_00 20:14

Okay, so you don't give a shit. But the liquor industry, and by the way, Stuart, with all due respect, one of my good friends is a supplier to the liquor industry in the United States, and this is coming straight out of their mouths. But you want to continue to to you you you skirt the topic. The liquor industry may have has had to force to diversify, just like Canada's forced to diversify and look for new markets. But until you negotiate those new markets and start those agreements, it takes time. The liquor industry in the United States, you just said, oh, it's only nine percent drop. Only nine drop. The issue is that it's not millennials. But you just did what you did is exactly what marketers like to do. Let's kind of put the a little fine-tuned little rope uh um uh ribbon on this. The reality steward is let's talk about net sales.

SPEAKER_01 21:02

Net sales, delivery of bottles, to net sales you know, uh net sales or net profit. No, no, you're you're you're you're you're you're talking about it.

SPEAKER_00 21:18

Okay, I'll drop my eye and cross my teeth.

SPEAKER_01 21:21

Net delivery of bottles is down, net delivery of bottles, but again, you're going on consumption. Okay, or we're not gonna agree.

SPEAKER_00 21:31

We're not gonna agree, we're not gonna agree, ladies and gentlemen.

Wrap-Up And Weekend Send-Off

SPEAKER_00 21:34

As Stuart plays with the audio, it's Stuart's way of playing. Nobody else can be right but Stuart. There's you know, come on, you know, people from the music. Have a good weekend with