Former CBO Director Says Tariff Impact Would Cause Canada’s Economy to Enter a Recession

Lawrence Let s bring ░░░░░░░░ now former Congressional Budget ░░░░░░░░ director Doug Holtz Eakin ░░░░░░░░ discuss this You know ░░░░░░░░ seems that Canada does ░░░░░░░░ to avoid tariffs the ░░░░░░░░ proposed a 1 3 ░░░░░░░░ package to secure their ░░░░░░░░ You know they re ░░░░░░░░ temporary processing for some ░░░░░░░░ at their border stations ░░░░░░░░ reassigning those personnel to ░░░░░░░░ the border You know ░░░░░░░░ s an election year ░░░░░░░░ Canada What would tariffs ░░░░░░░░ to the Canadian economy ░░░░░░░░ EAKIN It would be ░░░░░░░░ recession for the Canadian ░░░░░░░░ no question They rely ░░░░░░░░ on the United States ░░░░░░░░ roughly 80 percent of ░░░░░░░░ exports Those tariffs would ░░░░░░░░ hurt the sales into ░░░░░░░░ U S And so ░░░░░░░░ re going to try ░░░░░░░░ avoid that And you ░░░░░░░░ one of the things ░░░░░░░░ came to us put ░░░░░░░░ resources on the border ░░░░░░░░ put more drones out ░░░░░░░░ put more bodies out ░░░░░░░░ Try to intercept the ░░░░░░░░ of fentanyl especially some ░░░░░░░░ immigration not nearly the ░░░░░░░░ border but that s ░░░░░░░░ way to think about ░░░░░░░░ Just sort of a ░░░░░░░░ shot But I think ░░░░░░░░ right way to think ░░░░░░░░ this is it is ░░░░░░░░ common for trade deals ░░░░░░░░ have sidebars sidebars on ░░░░░░░░ standards sidebars on environmental ░░░░░░░░ And I think the ░░░░░░░░ elect is setting to ░░░░░░░░ a sidebar on border ░░░░░░░░ and do it with ░░░░░░░░ Mexico and Canada in ░░░░░░░░ context of renegotiating the ░░░░░░░░ agreement in 2026 It ░░░░░░░░ coming and this is ░░░░░░░░ the opening salvo in ░░░░░░░░ negotiation Let s have ░░░░░░░░ permanent fix to this ░░░░░░░░ issue Lawrence And he ░░░░░░░░ like he s getting ░░░░░░░░ action as of right ░░░░░░░░ though so both sides ░░░░░░░░ s an incentive there ░░░░░░░░ both sides because a ░░░░░░░░ percent tariff on Canadian ░░░░░░░░ coming into the U ░░░░░░░░ would affect our economy ░░░░░░░░ How would it affect ░░░░░░░░ in the U S ░░░░░░░░ EAKIN They would have ░░░░░░░░ go north and perhaps ░░░░░░░░ dramatically right away But ░░░░░░░░ wants higher prices We ░░░░░░░░ been through a period ░░░░░░░░ just untenable inflation the ░░░░░░░░ hasn t got the ░░░░░░░░ entirely back in the ░░░░░░░░ doesn t want to ░░░░░░░░ it get more legs ░░░░░░░░ s already more stubborn ░░░░░░░░ expected And those tariffs ░░░░░░░░ in fact make their ░░░░░░░░ much much harder Lawrence ░░░░░░░░ want to turn to ░░░░░░░░ president elect s agenda ░░░░░░░░ You know he has ░░░░░░░░ aggressive agenda to undo ░░░░░░░░ that he thinks President ░░░░░░░░ had messed up The ░░░░░░░░ elect is not in ░░░░░░░░ yet but he s ░░░░░░░░ still very quickly Should ░░░░░░░░ tax cuts be done ░░░░░░░░ a border bill in ░░░░░░░░ big package do you ░░░░░░░░ or should tax cuts ░░░░░░░░ first HOLTZ EAKIN I ░░░░░░░░ that to the legislative ░░░░░░░░ I mean you know ░░░░░░░░ is what really matters ░░░░░░░░ got to get 218 ░░░░░░░░ 50 in the Senate ░░░░░░░░ how you get to ░░░░░░░░ is the matter of ░░░░░░░░ counting votes I think ░░░░░░░░ s going to drive ░░░░░░░░ not grand economics strategy ░░░░░░░░ How important are the ░░░░░░░░ cuts for the U ░░░░░░░░ economy HOLTZ EAKIN So ░░░░░░░░ s remember there s ░░░░░░░░ tax cut if by ░░░░░░░░ extending the 2017 bill ░░░░░░░░ s avoiding a 5 ░░░░░░░░ tax increase That s ░░░░░░░░ important That s avoiding ░░░░░░░░ recession for us So ░░░░░░░░ has to happen Anything ░░░░░░░░ top of that is ░░░░░░░░ bonus And the border ░░░░░░░░ of ways to get ░░░░░░░░ done We re seeing ░░░░░░░░ right now.”