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US Reignites Trade War Against Canada & CDs Are Making a Comeback
00:29:25
US Reignites Trade War Against Canada & CDs Are Making a Comeback
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Good morning, Brew Daily Show. I'm Neal Freyman.
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And I'm Toby Howell.
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Today the US Is putting more tariffs on Canada, but waited until Bieber performed at the World Cup.
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Then another twist in the diarrhea lettuce saga. It's Tuesday, July 21st. Let's ride.
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B
Have you ever listened to the show and thought, did they really just say that? I bet I know more than these guys. Well, here's your chance to actually prove it. Next Thursday in Manhattan, we're hosting a big trivia show alongside our colleague and economic educator Max Nomics. A former trivia host himself. Maxinomics is going to quiz all of us, you and the MBD hosts. With the top teams facing off against me and Toby for a grand prize. I'm honestly a little nervous.
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A
This is like, are you smarter than a fifth grader? But the fifth grader is is Neil. Your only hope is that the show starts at 7pm and maybe he's a little bit sleepy. I will also be there to provide moral support and shake Neil awake. Caveat is an awesome venue. That's where we're hosting it. There will be trash talking, there will be maybe some tears because you guys are going to lose, but we cannot wait to see you there. The link is in the show description to sign up and buy tickets or in our Instagram bio. And now a word from our sponsor, Anthropic, the team behind Claude and Neil. Ask me anything you want about AI, Anything at all.
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B
Okay? How do I know when to trust it?
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Great question, and I have no answer for you. But that's one of the real questions from real people. Anthropic, the public benefit corporation behind Cloud, heard them over and over in more than 120,000 interviews about people's hopes and fears around AI.
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Anthropic is not afraid to talk about things like trust or job security because their goal is to make sure I actually works out well for people.
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They. They publish real research on these kinds of questions, even when it's uncomfortable.
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So if you've got your own hard questions about, I head to claude.AI/mbd to submit it to Anthropic and explore how they are answering them. That's Claude Dot AI Slash Media. Just two days ago, the US And Canada were joint hosting the World cup together in a show of intercontinental unity. Less than 48 hours later, they might be back in a bitter trade war. Yesterday, the Trump administration announced 50% tariffs on a wide range of Canadians Canadian goods set to go into effect in 30 days. Those include milk and cream, alcohol and hockey equipment, which the White House says is retaliation for unfair treatment of American goods like cars, dairy and alcohol. Crucially, some of Canada's biggest exports like auto, steel and energy will be spared the 50% tariffs. But the renewed threat will certainly reignite tensions and resentment between the US and its neighbor to the North America's second largest trading partner after Mexico. Now, whenever Trump imposes tariffs, it's important to look at which law he's invoking to do that. Since the majority of his tariffs were deemed illegal earlier this year by the Supreme Court, the 50% Canada tariffs are being applied under the obscure section 338 of the 1930 Tariff act introduced during the New Deal. However, this law has never been used before to levy tariffs on a trading partner and almost certainly will be challenged in court again. For now, Canadian leaders seem to be shrugging off the tariff threat, alluding to all the other times Trump has threatened to impose tariffs, only to back off at the last second. Canada Energy Minister Tim Hodgson said, I'm not going to react to that. We've seen this sort of thing before. Still, when there's Canadian smoke, there could be fire.
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A
Yeah. One of the reasons they might be shrugging is the fact that the US imported $383 billion of goods from Canada in 2025. These new tariffs would affect approximately $20 billion of those imports. So it's a relatively small slice of the goods that are coming across the border. One reason why you could be scared, though, is that these new tariffs also apply to usmca, which is the United States, Mexico, Canada agreement that Trump actually negotiated in his previous term. Those goods are usually protected from tariffs like this, but this new round escalates that in targets goods under USMCA compliance. So that is why some are pretty nervous about not just what this broadcast to Canada, but to other trading partners. It injects massive uncertainty in the global economy, said Scott Lincoln. He's a vice president of general economics at the Cato Institute. He said, we crossed the Rubicon. The invocation of 338 is the nuclear option for Trump tariffs. So even though it is very small in terms of the greater pie that we share with Canada trade, it does broadcast a lot of uncertainty to other trade partners.
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B
Why? Why Canada? So, I mean, they're asking that. Everyone's been asking that over the past few years. We haven't heard many tariff announcements recently actually. But there are two main reasons why the Trump seems to be going after Canada has nothing to do with the smoke that was drifting over American cities last year, even though he did express anger with Canada about that. One of the reasons is that Canada was only one of two countries alongside China to retaliate from tariffs last year. So a bunch of the, a bunch of the countries came to the table to negotiate, but they didn't put their own tariffs on the United States. There are only a few countries that did that with. One was China because they have a lot of leverage and the other is Canada. And the other reason that the US Might be going over Canada now is unfair treatment around American booze and alcohol. A number of provinces in response to those tariffs last year removed American alcohol, Jack Daniels from their shelves and the US Is not happy about that. And they cited those alcohol products being taken off shelves along with a couple of their grievances as the reason why we're going after Canadian hockey sticks.
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A
I mean, Canadian Prime Minister Mark Carney too has kind of made himself a very vocal Trump opponent. We were at Davos and he made this big speech about how America has kind of been bullying a lot of other countries around the world. So clearly those relationship is testy as well. Ontario Premier Doug Ford too, who is one of those people who have gone after American alcohol within his own province, said that he wants Canada to respond tariff for tariff, dollar for dollar. So it is getting mighty frosty between these two neighbors. And I go back again to the US MCA trade deal that's now in big question. There's big question marks around that. US Trade Representative Jameson Greer has suggested splitting the three country pac because obviously Mexico is part of that into two separate agreements, one with Mexico, one with Canada. So maybe this is jockeying for a new trade deal that is coming down the pipeline. That doesn't make it this big unified bloc, but instead goes after each country individually.
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You think beating them in the gold medal game would be enough of a win for the US but now we got to go after there are very small dairy imports as well. Keep your eye out for more tariff announcements because after Trump removed the tariffs that he put on much of the world earlier this year, when the Supreme Court rejected them, he applied a blanket 10% tariff under a new law that actually expires on Friday. So we could see another round not just on Canada, these 50% tariffs, but a bunch of other tariffs on the rest of the world as Trump continues to his protectionist regime. Moving on. Where have we seen this before? An untested leader from the north heads to the capital in the south to unite the people and turn around a struggling kingdom. He's not Ned Stark. His name is Andy Burnham and he's the new Prime Minister of the uk. The former mayor of Greater Manchester, Burnham replaced Keir starmer as Britain's seventh prime minister in 10 years. The kind of turnover you only see from Brown's quarterbacks. And that's because things have not been going well. Economic growth has been stagnant basically since the 08 financial crisis. Weighing on L standards. Meanwhile, energy shocks have driven up the cost of living, while the UK government has been tied down by too much debt to do anything about it. So what's Andy going to do about it? Tear it all down. In his first speech as PM yesterday, Burnham called this moment a circuit breaker for Britain and pledged a new economic model to kickstart growth. His main idea is to decentralize power from King's, I mean London and empower cities and regional governments to revive their own economies, what Burnham calls good growth. In every British postcode. He points to his own success in Manchester, a once declining industrial city that's seen its fortunes turn to the upside as a shining example of how this can work. Still, many prime ministers have made similar lofty pledges before him and look how that turned out. Burnham said he was acutely conscious of how broken politics is in the UK and acknowledged we, meaning politicians, have not been good enough. Hope he enjoys a better fate than net.
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His first thing that he did this is day two of the Burnham regime and he's already actually cutting taxes this morning, which is not the morning over in London, Burnham announced that the the elimination of the value added taxes on electricity. He says that it's going to save households the equivalent about $60 at this time of year when there's volatile energy costs as well. So he's trying to show his commitment to taking on the high prices that a lot of citizens of Britain have been very vocal about. The other thing that we're already seeing is that he has a pretty good relationship with Trump as of now. Trump posts on Truth Social. The Prime Minister has got a big job ahead of him, but he will be able to do it. And of course the USA will be there to help. So contrast that to what's going on with Canada right now. Another key US ally. It looks like this relationship is cozy for now. That's the big thing because you never know how it's going to turn out. But so far we're seeing him kind of trying to ally himself with the US and already trying to cut taxes. So that's just, we're literally on day two. But it maybe is telegraphing his hand going forward.
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When you talk about why the UK has had seven prime ministers in 10 years, and that's because there's just basically been zero economic growth. Gross domestic product per person is just 7% higher than it was in 2008, compared with more than 20% in the decade before the crisis. Things were going so well in 2007. The 2008 financial crisis comes. It wrecks the entire global economy. But the UK has just never gotten out of that rut. And then in 2016, we, they did Brexit. We're right now celebrating, not really celebrating or commemorating the 10 year anniversary of Brexit, which hits living incomes even more. The big stat that a lot of people point to is that if you go outside of London, their living standards there are less than Mississippi, which is the United States poorest state. London PRODUCTIVITY is 30% higher than the average in Britain. So what Burnham is saying, he's coming from Manchester, far to the north, and he's going to London where maybe the economy is overheating too much and saying there's London and then there's everyone else. And he's doing this process called devolution where he's trying to give more power to cities, localities, regions, to listen closely to what the problems are in local jurisdictions and say, okay, actually we can speak to your issues and we can help revive economies from the outside in rather that from London out.
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And if you want some fun facts about andy Burnham, he DJs in his spare time. He's very closely linked to the Manchester music scene. He, he's known for dressing and speaking a little bit more casually than a lot of other politicians in Britain. So he's trying to approach him, he's trying to make himself seem more approachable than typical London politicians. And then, yeah, you've done a lot of Game of Thrones references. His nickname is King in the north because he was the mayor of Greater Manchester. So the King in the north loves the DJ and dresses very casually. That's Andy Burnham.
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Now, interestingly, he's not a United or a City fan. He's actually an Everton fan over in Liverpool.
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He likes pain. All right, moving on. We've all heard it was the lettuce from Taco Bell that was causing people to test positive for cyclospora, the diarrhea causing parasite. And that lettuce was provided at Taco Bell by Taylor Farms, one of the largest distributors in the world. But not so fast all your toilet paper torches. Another twist has emerged. The FDA said this week that the positive test it got from Taylor Farms lettuce was actually a false positive. In re reviewing its samples, the agency determined that false amplification was to blame, not actual contamination. Unfortunately, the retraction will be of little solace to the 1600 or so confirmed cyclospora cases as they spend time atop the porcelain throne. It also comes a little late for Taco Bell, whose name was dragged by the fda, causing parent company Yum Brand stock to fall more than 7% over the past week. However, despite reversing the test result, Taylor Farms is voluntary recall remains in effect. In playing their game of number two clue, the FDA tracked the outbreak to Taylor Farms produced lettuce from Central Mexico. So even though there has not been a confirmed positive product test for cyclospora, evidence still links the lettuce supply to the outbreak without the laboratory confirmation. Neal, this is turning into quite the bowel churning movie mystery.
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B
Yeah, the bottom line here is that the FDA still thinks it's Taylor Farms. They're not letting them off the hook. In a statement they said that the investigation and outbreak data continue to converge on shredded iceberg lettuce from Taylor Farms locations in Central Mexico. So even though they didn't find this microscopic parasite on this specific sheet of iceberg lettuce, they want more shipments because iceberg lettuce has a very short shelf life as we know because there's all this stuff in our fridge that's rotting and spoiling and this parasite has an incubation period of of two weeks. So the timing doesn't really match up. Well, they did further confirmation testing and didn't find it on this specific shipment. But they want to do a more because they're still very much convinced that it is this Central Mexico farm in from Taylor Farms that is causing this outbreak.
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Why did we get this false positive? Apparently I'm learning a lot about food safety. Cyclospora is notoriously difficult to identify. One of the reasons is cyclospora is really hard to grow in a lab. So it's hard to take a sample, cultivate and see if hey, is this parasite actually there or not? So what people are learning is that food safety is very scientifically complex. It's not just as easy as spraying. Some spray on it and like all of a sudden the cyclospora reveals itself. So that's rule number one. The company response is like, hey, we are Taylor Farms. Like we are one of the biggest lettuce distributors in the world. We send lettuce to Walmart, all the way down to McDonald's and Taco Bell. And they kind of tried to put out this story that we do wash our produce very rigorously. They've developed something called SmartWash, which is a system that the company describes its similar to chlorine on steroids. And we were talking before the show, is that something you really want applied to your lettuce? But I guess it's better than a parasite at this point. And a lot of health officials too are saying that this is creating another public health headache for us. Not just because of people having to go to the bathroom, but we are trying to get Americans to eat more fresh fruits, more fresh veggies. And here comes this outbreak that risks undermining public confidence in some of that fresh produce. So it's a double headache and a double stomachache.
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B
Confidence has absolutely been undermined. Just look at restaurant traffic data. Foot traffic at Taco bell was down 19% on Friday compared to the same day last year. Sweetgreen Stock is down 19% in the last five days. They haven't been linked to this stuff at all. They don't source from Taylor Farms. And then you look at foot traffic at chopped Panera bread, Chipotle, the sloppies, they are all down bad. Traffic declines were on Friday from the year before. The Yum Brands parent of Taco bell stock down 9% in the last five days. So it doesn't, when you're looking at the public confidence or the confidence of a particular consumer does. People aren't really. They don't discriminate between where they get their lettuce. If there is a lettuce type of lettuce that causes diarrhea, they're just going to say, I'm not going to touch this thing at all and wait till this all blows over. Which is bad for these companies because they're just caught up in this panic, which may be deserved because health officials say, yep, don't eat packaged or a shredded iceberg lettuce from these particular places. But yeah, it's taken a huge. It's been very damaging for the entire restaurant industry. We saw this many times before where there's safety issues at places like Chipotle or McDonald's, where people just say, I'm not going anywhere near this thing because I don't want to be sick.
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All right, we're going to take a quick break and come back with Toby's Trends right after this. Since streaming took over the music world, you might think that kids these days wouldn't be able to tell the difference between a CD and a cassette tape, but you'd be wrong. Sales of physical music are growing again, powered by Gen Z, and it's what I want to talk about on today's edition of Toby's Trends. 16.3 million CDs were sold in the US during the first half of this year, according to luminate. That is up 16% compared to last year, outpacing even vinyl, the king of the throwback physical music formats. The biggest reason for the spike is K Pop. The growth in CD sales was driven by massive albums such as BTS's Arirang and In a strong K Pop release schedule, Luminate says. But even if you take out K Pop, CD sales still jumped by 6.7%, showing this is a full blown trend. The funniest part is most people aren't buying the disc to actually listen to music. Half of Gen Z and millennials who bought a CD don't actually own a CD player. So are they buying them just to look pretty on their shelves? Pretty much. Luminate thinks that CDs have been recontextualized from a functional audio format into an affordable collectible. The act of buying physical music, illuminates report reads, is as much about esthetic ownership and direct financial support for the artists as it is listening to the music on the product itself. Neil I think the last thing I listened to on a CD was Raffi. But never underestimate the power of nostalgia and K Pop.
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I mean, I get it. Having a awesome CD collection is one of the biggest flexes you can have. At least when I was in sixth grade. This is bringing me back to my friend making mixed CDs for me and then writing, you know, kind of what it was on Sharpie, on the, on the CD itself. And honestly, this stuff, sixth, eighth grade was like the most emo thing you could ever imagine. When I, when I look back, I'm like, how did I ever listen to that stuff? But it kind of syncs up with listening habits in general. Young people are listening to older music. And maybe these CDs are not necessarily older music like BTS is very modern and new, but just there is a throwback nostalgia vibe to the music industry. Right now, 60% of Gen Z listeners say they most often listen to music from the 1990s or earlier. That's up from 18% in 2021. So they're rediscovering old music and they're rediscovering old formats that we all grew up listening to, like, you know, CDs and vinyl, which has been huge. And I think cassettes have to be next.
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A
I thought the funniest part too is that independent record stores are still accounting for a large share of physical album stares. But the biggest growth vectors were Target and Walmart. They now account for 30% of all physical album sales. So you might think of it as this very, you know, indie sleaze thing to do, where you go through the dark back shelves of a independent record store. But nope, actually a lot of people are just going to Target and saying, oh, I actually want the BTS album. But you are totally right about the cassette player and the cassette tape maybe making a comeback. Maxwell is a company who just launched a Bluetooth cassette player. They are trying to say, clearly there's demand for the actual ways to listen to music. Now you need ways to play the music. So let's start rereleasing these outdated forms of technology. So that might be the next wave is you need something to play these things.
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B
Yeah. Speaking of that, I remember my dad got a new car. And the coolest thing I thought in this new car, I think it was just a Honda Accord. It was a six CD player. So you could put in six.
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New car.
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Yeah. Wow. Oh, but this was like 15, 20 years ago.
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Okay.
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Yeah, not. Not recently. I don't think they come with CD players anymore, but the old one did. The old new one had six CD players in it. So you could put six CDs and you could rotate. Why would anyone need to six CDs? I mean, now it seems like actually that's not a lot of music considering we have the whole music library ever on Earth on Spotify or Apple Music. But I just remember that being the coolest thing ever. I could put in six CDs and play them whenever I want. So I think this is pretty cool. CDs also play very high quality audio. So if you're looking at vinyl versus CDs, obviously CDs have a more perfect sheen to them. Vinyl, you get those imperfections and that warm sound CD is more, more of clean audio, but it's very high fidelity. So I am all for this trend. Let's keep rediscovering physical formats. Let's sprint to the finish with some final headlines. Paramount and Warner Brothers are learning how Odysseus felt trying to make it home. Their pending $81 billion merger took a wayward turn yesterday after a federal judge in California granted a temporary restraining order preventing them from closing the deal, which they aimed to do before July was over. It's not a full out block, but it is a 14 day pause ahead of a hearing scheduled for August 3rd when the judge could grant a temporary injunction that would delay the acquisition even further. Despite the DOJ giving its blessing, a dozen Democratic led states have sued to block the deal from going through, arguing it would lead to higher streaming and movie prices for consumers and lower the quality and quantity of content. The California judge yesterday seemed to agree in part writing that the combined market share of the Warner Brothers and Paramount Film Studios is, quote, likely to violate antitrust laws.
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A
Yeah, California Attorney General Rob Bonda said this is a critical first win in our case to ensure this mega merger never sees the light of day. His point was essentially you're going to get fewer opportunities across the industry. You're going to get worse products, worse services for consumers. So they're trying to preserve a competitive marketplace. We've seen these a lot in these antitrust rulings and it would be a giant company. I mean it brings Paramount Pictures and Warner Bros. Giant film studios under the same roof, brings Paramount plus and HBO Max giant streaming services under the same works. Then you get into the tv. It Paramount has cbs, mtv, Warner Bros. Has cnn, hbo. Those are big news programs as well. So that is why you've seen a ton of pushback to this. This is not the last turn in this media odyssey that we've talked about a lot on the show already. And I think we'll talk about going forward. Moving on, how many coffees do you drink per day? If you're downing five, one, I hope you host the morning podcast. But two, your doctor may not be mad at you. They may even be proud of you. The American Heart association just released guidance on coffee that concludes drinking three to five cups a day. About 400 milligrams of caffeine is safe for most adults. Not only is it safe, it may reduce the risk of heart disease, stroke and type 2 diabetes. Researchers reviewed dozens of studies and found the evidence has shifted from coffee might be okay to coffee could actually be good for you. Neil. The one catch is black coffee is better than that sugary stuff. But all my irresponsible coffee drinkers rejoice and then run to the bathroom because your bowels are probably moving.
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I mean why? Why is coffee good for you? Why is five cups of coffee potentially good for you? The report states a couple of reasons. One is that when you have caffeinated coffee, you're more likely to exercise on those days. So it's sort of this cause and effect situation. Coffee can also lower your blood pressure. It acts as a diuretic, as you mentioned, seems to be a theme of this particular and caffeine also can block a substance that causes AFib, which can potentially lead to strokes. And there might be some antioxidants in there, other substances that can lead to better health. This is crazy. 5. Do you know anybody who drinks five cups of coffee a day? The only person I can remember who just chug coffee nonstop was yeah, my fifth grade teacher. And I think teachers do drink a lot of coffee because they get up early and they have to deal with little brats all day.
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A
I think the Detroit Lions head coach, whose name is actually Dan Campbell, I think he drinks like 10 cups of coffee a day, which so healthy also makes sense. He's, he's basically, yeah, he's a very healthy individual, but he's also a teacher of sorts and needs to keep the energy high.
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Sweet spot is 2 to 4, health experts say. And they also looked at energy drinks to see if there were similar health benefits because maybe it's just the caffeine. No, they say to stay away from those.
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Not the good stuff. Moving on While the Odyssey is chugging along racking up millions of dollars at the box office, Marvel is trying to remind people that, hey, the mcu, it still exists. The first trailer for Avengers Doomsday dropped yesterday, giving fans a look at the film Marvel hopes will get its biggest franchise back on track. After scrapping plans for a Kang led storyline following Jonathan Majors scandal, the studio turned back to its most reliable hitmakers, the Russo brothers, whose four Marvel films have grossed more than $6 billion worldwide. Their new story swaps King for Doctor Doom, played confusingly by a returning Robert Downey Jr. And throws together the Avengers, Fantastic Four and the Orig X Men. Because why not? In typical Marvel fashion, the trailer is packed with cameos. I spotted Thor, Loki, Magneto, Professor X, Gambit and Chris Evans reprising the role of Steve Rogers again. Avengers Doomsday hits theaters on December 18th, where it will go head to head with Dune 3, but they're clearly trying to build some hype early.
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B
I watched the trailer, I read the plot synopsis. This might as well be in a different language.
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Yeah, I have absolutely lost the plot.
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B
No clue who any of these characters are and what they're doing and what the multiverse is and which phase we're in and which even movie this is in. And so maybe I'm just dumb, but I was just trying to learn about this and I have no clue what the hell is going on.
- [25:54]
A
You're definitely not alone in a lot of the early reviews I was reading is that this is Marvel trying to tie the knot on Phase six, which has not gonna plan at all. They. They really had to change direction after the the Kang debacle. So they are trying to do one big final push, knit this story up. And then I think what they really want to do is start over and just like start fresh again. So maybe this is. They're probably. It's still probably going to make $1 billion. Let's get rid of all these characters that no one really cares about, start over and try again. If they're using the Chris Evans bullet holding, you know, Thor's hammer in the trailer, which they did that to me does not bode well because that's supposed to be a big reveal, I feel like. And they put it in the trailer. So it seems bad so far.
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B
All right, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Tuesday. To share your thoughts on the episode or anything else, send an email to Morning Brew daily at Morning Broadcom or DM us on Instagram at me Daily Show. Let's roll the credits. Emily Milligan is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lane. Take technical direction by Nina Miller. Hair and makeup. Drink too much coffee and won't shut up. Devin Emery is our president and our show is a production of Morning Brew.
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A
Great show today, Neil. Let's run it back tomorrow.