>> Trade tensions between the U.S.

and Canada are escalating with Canada imposing 50% tariffs on more than 700 U.S.

goods.

Worth 20 billion dollars.

The move comes in retaliation for new U.S.

tariffs on 20 billion dollars in Canadian goods after the 2 countries failed to reach a new trade agreement last month as businesses on both sides of the border brace for more uncertainty.

Some are questioning a relationship that has long been defined by economic partnership and mutual respect.

Joining us now are even heard a political science professor at Northwestern University.

Robert Bly, a political science professor at University of Chicago.

And Mark Genzler, president, CEO of the Illinois Manufacturers Association.

Thanks to the 3 of you for joining us.

Robert, who already starting with you first to the U.S.

struck first on August TWENTY-SECOND with those 20 billion dollars in tariffs on Canadian wine, cement, hockey sticks and other goods.

What do you think the rationale is behind this move as the U.S.

trying to establish a stronger domestic, a hockey stick sector or something else is at play here.

>> Yeah, us strike first.

Just actually struck first earlier at the beginning of the Trump administration and then can retaliate against those first.

now we're in round 3 with us.

Is how can through television?

So initially the U.S.

raise tariffs things like steel, aluminum, upwards of 30 billion dollars.

That's 10 billion dollars more.

This round tears actually.

But concentrate are really important sectors.

32 down street this time are responding to Kerry's response to So Karen, Reis tariffs on American auto parts and they put a pretty good tax American auto parts.

The returns alcohol that took all that was the off the shelves.

Was it done by American whiskey anymore?

And there's been some ongoing disputes very and this is basically us responding to that response claiming that that's a scrimmage, Henri, we have the right time.

>> Ok, so lots of back and forth.

for plenty of folks probably Mark Dantzler.

What sectors in Illinois have been hit the hardest by tariffs during the president's second term.

>> Canada is key trading partner for Illinois.

United States Prentiss and only exporting about 80 billion dollars worth of goods and services last year in nearly 20 billion dollars went to Canada.

So I was Calgary, Alberta, not long ago.

Couple weeks ago we get significant imports of Canadian crude oil sands that are refined here.

Obviously our North American auto supply chain.

We have large manufacturers of automobiles in Illinois and suppliers are in Canada and Mexico.

It's not uncommon to see Parts Cross the border 3, 4, 5 times before becoming a part of that vehicle.

And so we're seeing particularly energy being impacted by this automotive and was agricultural products as well.

A big impact on both sides of the border.

>> the Trump administration says Canada has been taking advantage of the U.S.

with unfair trade practices.

The administration point to 2 candidates, 25% tariff on U.S.

vehicles, its restrictions.

As we just heard on us, alcohol, how much merit is there to the argument that Canada is taking advantage of the U.S.

now?

I think >> fundamentally misleading in the sense that the import export trade in the U.S.

and Canada is about business is making business deals with other companies and harder to advance the interests of their companies.

So these are self-interested arrangements.

You make a contract to buy goods based on quality and price.

That's what companies are doing.

That's what drives imports and exports.

So the concept of taking advantage is ludicrous.

>> Mark, how will the U.S.

tariffs on Canada impact American businesses and manufacturers that rely on Canadian goods?

>> Well, it's certainly going to increase prices in many cases.

American manufacturers, helmet manufacturers just want stability.

They want certainty kind of the ping pong ball back and forth, really creates an issue for businesses that are trying to plan not only next year, but 5 years and 10 years down the road, we have Supply chains.

95% of world's consumers live outside the United States.

And then I think that we should focus more if the president's going to see tariffs of China, Russia, some of the countries that are not abiding by international rules are still in it.

Tears can be effective when they're you selectively are targeted countries that are cheating.

You know, in this case, Cannon has been a great friend and ally we just hope that American government, the Canadian government get back to table and negotiate benefits, both countries and businesses and residents on both sides of the border.

>> Robert, Canada's retaliatory tariffs.

They're expected to take effect September 8.

It is Canada trying to see if they can withstand a trade war with the U.S.

by delaying it that way.

>> I think that government that the community and government is trying test the proposition that it's possible stand to fight United States for sure.

So, Marc really know the standard he expects countries to play because she did with United States of that to take a hard it.

But actually rather than just as seen in to American demands on this case, this is in the course of trying to pressure Canada to negotiate us MCA so successful organizations and going on the back and forth since the beginning, fact, Trump administration, goal here from the Trump administration is to put maximum use the leverage us have terms of market to extract more concessions from can most countries can play given significant concessions.

United or cars no longer because U.S.

because it is allowed leave the country going to destabilize the cult system.

We just have to abandon.

The idea us is going to be a leader.

And so they say to be a challenge.

this recent round the conflict is actually example.

Can But I think my words about trying to and that's kind of pressure campaign on the United States, but not just backing down the American demands.

So particular case, is a small exam.

I was going to become a larger succeeds and can't have act immediately a larger strategy other countries in particular that you could use against United States in the 2nd half attorney.

>> In the U.S.

and Canada, they met earlier this month to negotiate a trade deal that would have avoided this back and forth round of tariffs.

Both sides accuse the other of making unreasonable demands at the 11th hour.

Who was at fault for those talks apart.

>> I think what we're seeing is that the world of international diplomacy has kind of grown tired of Trump's show.

So I'm not sure there are many international negotiators, the trust, anything that comes out of the White House.

So when they sat down to talk to each other, there's no sense that Americans are likely to live up to any of their promises.

And that means it's basically impossible to have a negotiation because there's no faith that deal would upheld by the Americans.

And that's a real change in how the Americans are seen.

But it's also a product of the way that the Americans from Canada to Venezuela and Iran and beyond basically led by punching you in the face and then expecting you to good for them.

But you want.

And I think that hasn't worked in Iran and that's not going to work in the long term in Venezuela.

And it's not working with the Canadians at the moment.

So it's a really counterproductive tactic.

And it seems the the only toy of the Trump has left and he keeps using it and it's really getting all.

>> Mark, in the meantime, you know, how will these tariffs impact businesses that want to sell goods to Canada?

>> Well, Canada is our largest trading said it's it's about 20. dollars.

It's more than Australia, China and Germany combined.

When you talk about the sales of manufactured product, agricultural products, we need markets around the world.

We need inputs.

We need our products going there coming here.

We're a global economy.

And so it's going to cost businesses would seeing supply chain interruptions.

We saw during the pandemic and for American menu, that maybe have one supplier in Canada that that cost is getting go up exponentially under these tariffs.

You know, they're gonna have to either find another supplier, pay additional costs and and those costs are going to be passed on to consumers in those cases or the company can't provide a higher wage to its employees or buy that new piece of equipment in so again, the uncertainty and instability just make it really hard for businesses to compete in kinda move forward.

>> Robert, what implications do you think the street impact could have on the midterm elections?

>> I think the uncertainty erratic behavior on the part of U.S.

foreign policy.

We'll have knock-on effects on and probably some you know, it's economy to the point that.

Republicans already begun being concerned about these sorts of actions.

But I don't think it's going to break current Republican legislative like the city.

The president a stand with I think it's not going significantly change that the parents because again, this is basically the pitch.

If there's any picks from the Trump administration, point, it's that we will be stabilize the global economy through the use of tears.

It's sort of like thing the writing on this point.

don't think this would be wouldn't be a surprise to anyone.

But it could have caused it reflects in certain communities.

It can make really hard for some House races to go the way they And in a world in which we're already expecting rough diamonds because of the continued inflation, we provide American people would like.

I think this won't be to the Republican chances >> In just a couple seconds left, do you think there's going to be a legal challenge brought before the Trump administration over this Yeah, there certainly will be, though.

This is not gonna get settle probably by the courts and got settled by this power play between the 2.

The Canadian still have one to left.

But they haven't used yet.

They could either cut off or charge more for energy.

And if they decide to do that, then things would get chilly in the winter here in homes in Illinois, they use natural power plant a crack.

That's where we'll have to leave it in.

Heard Robert Ladee