In the latest episode of Trade Dispute: Impact on the Prairies, Prime Minister Mark Carney pitches a major strategic alliance with the European Union, drawing an immediate tariff threat from U.S. President Donald Trump. We also look at the Bank of Canada’s economic warning, a Manitoba steelworker strike and the political fight over American alcohol on Saskatchewan store shelves.
Podcasts are available now on GX94, Yorkton, or 620 CKRM, Regina, hosted by Steven Wilson. Or read the transcript below:
Steven Wilson — Welcome to Trade Dispute: Impact on the Prairies. I'm Steven Wilson. Prime Minister Mark Carney received a standing ovation in France today as he formally proposed a deep strategic alliance between Canada and the European Union. Addressing the European Parliament in Strasbourg, Carney says the goal is to pool sovereignty in areas like critical minerals, defence and artificial intelligence, while allowing seamless travel for transatlantic students and researchers.
Leveraging Canada's resource wealth, Carney offered to supply liquefied natural gas and hydrogen to Europe to insulate both economies from American economic pressure. He stressed that Canada is pursuing resilience so that no one can impair its sovereignty or control its open markets. That push for European integration triggered an immediate backlash from Washington.
U.S. President Donald Trump lashed out upon arriving in North Carolina, calling the move a hostile act. Trump dismissed Canada as a terrible trade partner and threatened very heavy tariffs on both Canada and Europe if the alliance moves forward. But political experts say Ottawa had to act.
Martin Gaal is a political studies lecturer at the University of Saskatchewan. He says the federal government is trying to diversify trade precisely because the American government has become a severe economic risk.
Martin Gaal — If Canada did not respond, then that would be a very evident sign of weakness. And what Carney is trying to signal is that we want a trade deal with the United States. We respect our American partners in terms of state-to-country and state-to-country negotiations.
We respect. We want to have normalized relations with them. But we're also diversifying because the Americans have appeared to be a risk.
And so, as Canada tries to diversify with trade partners in Asia, trade partners in Europe, trade partners in Latin America, trade partners in Africa, we're trying to signal, or the Canadian government is signalling, that we are not — we cannot be held hostage to the United States.
Steven Wilson — At home, the Bank of Canada is warning the reigniting trade war is severely threatening the country's economic recovery. A newly released summary of the central bank's deliberations shows deep concerns that the dispute will hamper business investment, household spending and hiring. Reciprocal tariffs now affect roughly $20 billion of goods from each country, squeezing small businesses that are already dealing with high global energy prices driven by the ongoing war in Iran.
Keith Willoughby is the dean of the Edwards School of Business in Saskatoon. He says the sheer volume of commodities caught in the crossfire is causing some problems.
Keith Willoughby — For a country like Canada, which relies upon exports, and for a province like Saskatchewan that has a lot of commodities, I worry about our supply chains being exposed to a lot of turbulence that could be really suffocating for those businesses.
Steven Wilson — On the provincial front, the trade war is sparking fierce domestic debates. In Saskatchewan, Premier Scott Moe's decision to aggressively levy retaliatory tariffs on American alcohol is drawing mixed reactions. The White House explicitly cited the liquor levy as a grievance in its recent countertariff justifications.
While local distillers strongly support the province's protective move, the provincial New Democrats are urging Premier Moe to go even further and completely pull American liquor from provincial store shelves. According to a new Angus Reid Institute study, the escalating dispute is not providing a widespread political boost for most provincial leaders, despite their aggressive stances. Gaal notes that for everyday citizens, the political posturing is overshadowed by a real feeling of being under attack.
The feeling of vulnerability is spilling onto the shop floor in Manitoba, where United Steelworkers Local 8740 members at the Gerdau Emera Steel plant have officially gone on strike. It aligns with warnings from the international union that the reciprocal tariff fight over intermediate goods like steel is directly threatening jobs and delaying investments across deeply integrated borders. Further west, the trade war is colliding directly with Alberta's political calendar.
A new report commissioned by the Alberta government estimates separating from Canada would cost the province between $50 billion and $170 billion in the first five years. Despite the massive economic instability currently caused by the trade war, Premier Danielle Smith is actively bucking calls from the provincial opposition to cancel the upcoming Oct. 19 separation referendum. Willoughby warns that until political leaders prioritize the cost of living over trade barriers and regional politics, the road ahead looks very difficult for everyday people.
Keith Willoughby — Because my concern is both the United States and Canada, our real citizens are getting caught in an affordability crisis where, if this again increases inflationary cycles, if it puts the pressure on the pocketbooks of citizens, I think that's a message that the governments will need to adhere to.
Steven Wilson — We will continue following these developments and bring you the latest on how the Prairie economy is adjusting. I'm Steven Wilson, and thank you for listening to Trade Dispute: Impact on the Prairies. Local news delivered right to your smartphone with the GX94 app and available anytime at SaskToday.ca and GX94Radio.com.
