Old allies, new tariffs: Canada's back in the crosshairs

Summary

Marketplace Morning Report: "Old Allies, New Tariffs: Canada's Back in the Crosshairs"

Release Date: July 11, 2025
Host: Marketplace (David Brancaccio)
Source: BBC World Service

In this episode of the Marketplace Morning Report, host Liana Byrne delves into the escalating trade tensions between the United States and Canada, the broader implications for global trade, and the fragile peace efforts in the Democratic Republic of Congo (DRC). The report provides comprehensive coverage of these critical economic and geopolitical issues, featuring insights from industry leaders and on-the-ground reporting.

1. U.S. Imposes New Tariffs on Canadian Imports

The episode opens with significant news: U.S. President Donald Trump has announced a new 35% tariff on Canadian imports, set to take effect next month (01:02). This move, detailed in a letter to Canadian Prime Minister Mark Carney, cites the fentanyl crisis and alleged unfair barriers to U.S. dairy exports as primary reasons for the tariffs. Trump also warned Canada against retaliation, promising equivalent tariff hikes in response.

Katie Silver, a BBC correspondent, provides context on the deteriorating trade relationship:

"They had, of course, had a very successful, very productive trading relationship, a free trade agreement... 35%, it's a very significant figure" (01:45).

2. Canada's Response and Broader Trade Implications

Goldie Hyder, President and CEO of the Business Council of Canada, emphasizes the need for swift resolution:

"Don't panic... Stay focused and stay engaged" (02:24).

Hyder highlights that such tariff threats are part of a broader, ongoing strategy by President Trump affecting not just Canada but other trading partners as well. This rhetoric has stirred concern among Canadian businesses heavily reliant on U.S. markets.

3. U.S. Tariffs Impacting ASEAN Nations

Beyond North America, U.S. tariff threats are also influencing trade dynamics in Southeast Asia. At the ASEAN summit in Malaysia, U.S. Secretary of State Marco Rubio attempted to mitigate fears of impending tariffs on member nations, where import taxes could soar up to 50%. However, Jonathan from BBC criticizes Rubio's approach:

"He had absolutely nothing to offer on tariffs... President Trump's tariff war... has completely overshadowed this ASEAN summit" (03:18).

The uncertainty surrounding U.S. trade policies has caused significant frustration among ASEAN countries, many of which are heavily export-dependent.

4. Global Market Reactions

The announcement of new tariffs has had a mixed impact on global stock markets:

• Europe's Stoxx 600 is down 8.10%, reflecting investor concerns over the trade tensions.
• Hong Kong's Hang Seng index shows resilience, closing up 4.10%.

These fluctuations indicate the widespread uncertainty and volatility induced by the U.S. tariff announcements.

5. Peace Efforts in the Democratic Republic of Congo (DRC)

Shifting focus to Africa, the episode covers a recent peace deal between the DRC and Rwanda, aimed at ending decades of conflict in the resource-rich Eastern DRC. Despite optimism, skepticism remains high regarding the sustainability of peace.

Paul Yingjai of the BBC provides a vivid account from the Rubaya mining site:

"I'm in awe of what I see... Mining has really helped me. It paid for my wife's dowry when I was getting married" (04:33).

The U.S., which brokered the deal, has expressed interest in securing a stake in Congo's mineral resources. Patrice Moussafiri, manager of the Rubaya site, underscores the local concerns:

"Any foreign investor can come here as long as they come with development for our people and increase daily wages for the miners" (07:02).

Despite the agreement, internal conflicts persist, particularly with the M23 rebel group, which continues to challenge the peace process. Analysts like Akram Tum Sifu highlight that successful negotiations with such groups are crucial for lasting stability.

6. Local Perspectives and Future Outlook

Residents of Rubaya mining town, despite the area's mineral wealth, live in extreme poverty. The proposed deal promises potential economic improvements but also brings uncertainty regarding employment and infrastructure development. Patrice Moussafiri emphasizes the community's hope that any foreign investment will lead to tangible benefits:

"If our economies improve, we will have no problems" (07:22).

Conclusion

Liana Byrne wraps up the report by reiterating the intertwined nature of trade policies and global peace efforts. The episode underscores the delicate balance between economic interests and geopolitical stability, highlighting the ripple effects of U.S. policies on both neighboring allies like Canada and distant regions like Southeast Asia and Africa.

This comprehensive analysis equips listeners with a nuanced understanding of the current economic landscape and the complex interplay of international relations shaping today's world.

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Timestamps:

• [01:02] - Introduction of U.S. tariffs on Canada
• [01:45] - Katie Silver on U.S.-Canada trade relationship
• [02:24] - Goldie Hyder on resolving tariff disputes
• [03:18] - Jonathan on U.S. impact on ASEAN summit
• [04:33] - Paul Yingjai reports from Rubaya mining site
• [07:02] - Patrice Moussafiri on foreign investment
• [07:22] - Community perspectives in Rubaya

Transcript

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[Liana Byrne]

Old allies, new Tariffs Canada is back in the crosshairs. Live from the UK this is the Marketplace Morning Report from the BBC World Service. I'm Liana Byrne. Good morning. So what's Marketplace Morning Report without a tariffs story? President Trump has announced a new 35% tariff on Canadian imports due to start next month. In a letter to Canada's prime minister, Mark Carney, Mr. Trump blamed the move on two issues, the fentanyl crisis and what he calls unfair barriers to US Dairy exports. He warned that any retaliation from Canada will be met with an equivalent hike in US tariffs. The BBC's Katie Silver says this is another shift in relationship between the neighbors.

[Katie Silver]

They had, of course, had a very successful, very productive trading relationship, a free trade agreement. In fact, as a result of this, we have seen, for example, Canada, for its part, sells a huge, huge amount of its good it's a makes up. The US Is a huge trading partner for it. So no doubt that 35%, it's a very significant figure. They'll be looking at that with quite a lot of concern. Canada, we've also heard, for example, it's going to come into effect on August the first. And saying that it's not just fentanyl, according to President Trump, saying that there's lots of trade and tariff barriers in place.

[Liana Byrne]

Katie Silver there. Goldie Hyder, president and CEO of the Business Council of Canada, says it's vital that both sides find a way to resolve their differences quickly.

[Goldie Hyder]

On the one hand it's obviously unfortunate, but on the other hand it's not really that much of a surprise because it's an ongoing tactic that has been utilized and continues to be utilized by the president on not just Canada. And we're not, we're certainly not the only country that's affected by these letters that are, you know, being kind of sent out every other day here. I think we should monitor what those letters say for not just Canada, but for other countries and put things into context. So don't panic, I guess, is part of the message. Stay focused and stay engaged.

[Liana Byrne]

Goldie Heider speaking there. Well, U.S. tariffs are also a hot topic beyond North America. They're dominating talks at the ASEAN summit in Malaysia. That's the association of Southeast Asian nations, and many of its attendees could face import taxes of up to 50%. The US Secretary of State, Marco Rubio has spent much of his time at the meeting trying to reassure them that better deals are possible. Here's the BBC's Jonathan Marco Rubio did.

[Jonathan Marco Rubio]

Show up and people often say that's, that's half of the success of being involved in asean, just showing up at meetings. But he had absolutely nothing to offer on, on tariffs. And that's the main concern. President Trump's tariff war, which really what it is for these countries that are so export dependent, has completely overshadowed this ASEAN summit. There's enormous frustration about how erratic they are, how damaging they are.

[Liana Byrne]

Jonathan Head there. Now let's do the numbers. Global stocks are mixed as President Trump's latest tariff threats cooled hopes of new trade deals. Europe's Stoxx 600 is trading down 8.10of a percent. And Hong Kong's Hang Seng closed up 4/10 of a percent. Now a recent peace deal between the Democratic Republic of Congo and Rwanda was meant to raise hopes of ending decades of conflict in Eastern D Or sea. But many remain skeptical that lasting peace is within reach. Millions have died as rival armed groups continue to fight for control over areas rich and valuable minerals. Now the US which brokered the deal, has signaled it wants a stake in those resources too. The BBC's Paul Yingjai has gained rare access to the Robea mining site in eastern Congo, where coal town and other minerals could soon become the focus of US interest.

[Paul Yingjai]

I'm on a commercial motorbike and we're taking a bumpy ride on the hill headed to the Rubaya mining site. After the long road journey, I finally make it to the mining site nestled in the lush hills of Masisi. I'm in awe of what I see. It's a vast expanse of territory. Mine workers like Peter Rosiase owe their entire lives to the mines. Mining has really helped me. It paid for my wife's dowry when I was getting married. This is how I earn my living. Thousands risk their lives here almost every day scooping coal tan, which is essential in producing electronics. Peter knows all too well the dangers of digging minerals in the deep dark mining tunnels. Whenever we're in the mines, temperatures are very high. When they exceed normal averages, cold air is pumped inside so that we can continue working. Thousands of miles away from the mines. Congolese and Rwandan officials who had been accusing each other of fueling a decades long deadly conflict in eastern drc, finally signed a peace deal at the White House in June. US President Donald Trump wants America to get a piece of Congo's mineral resources as part of Washington's mediation. But Congolese analysts like Akram Tum Sifu, based in Goma, say more work still needs to be done, especially involving one of the most active armed groups in the area. Today, the M23. DRC says Rwanda is supporting these rebels despite it repeatedly denying this. The deal signed between the DRC and Rwanda is good for peace between both countries, but it's far from resolving internal crises. For peace to return, the negotiation and talks between the Congolese government and M23 must be successful. Rubaiya, which is now under the control of the M23, holds one of the world's richest coltan deposits. It's reportedly on the radar of U.S. investors. Patrice Moussafiri, who manages the Rubaya site, has a clear message about any possible takeover.

[Patrice Moussafiri]

Any foreign investor can come here as long as they come with development for our people and increase daily wages for the miners. We don't know whether the presence of industries will increase or or reduce jobs, or whether they will build schools, hospitals and roads. Above all, if our economies improve, we will have no problems.

[Paul Yingjai]

Patrice's call echoes the sentiment of the residents of Rubaiya mining town who live in extreme poverty despite their abundant mineral wealth. Now many are unsure whether their livelihoods will be affected by this deal, which is designed to bring peace, but may very well also bring much uncertainty.

[Liana Byrne]

That was the BBC's Paul Ingjai reporting and I'm Lianna Byrne with the Marketplace morning report from the BBC World Service.

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