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COMMENTARY DAVID FRUM ... APRIL 2, 2025 David Frum on Trump's 'Liberation Day' tariff announcement PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=MBdndFnOG8g Peter Burgess COMMENTARY This conversation is pretty scary. The base point would be that Trump is very powerful and very dumb ... and essentially setting the stage for a massive world depression! MORE TO COME Peter Burgess
David Frum on Trump's 'Liberation Day' tariff announcement The Hub Canada Streamed live on Apr 2, 2025 48.6K subscribers ... 208,798 views ... 3.5K likes In Conversation with David Frum It is a consequential day for Election 2025 as Trump fires off his big tariff announcement. Join us LIVE to hear David’s analysis and send your questions to him and The Hub’s Rudyard Griffiths and Sean Speer. In Conversation with David Frum The Hub Canada Transcript 0:00 shoes of President Trump i understand David but help our audience understand what really is at the heart of today's announcement what's at the heart of today's announcement is that Donald Trump doesn't believe in a world of mutual benefit he believes in I win you lose he thinks like a predator whether it's sex whether it's business whether it's trade whether it's politics um he thinks in terms of do structures of domination and retaliation so the whole idea of trade one of the reasons he it's all mumbo jumbo is he doesn't understand what he's talking about um it and it's like someone who's never seen the ocean trying to describe the sea um and to understand what the sea does um he just doesn't get it and so I mean he has this idea that if there's a trade deficit you are somehow subsidizing the receiving company the the the the surplus country is subsidizing the receiving country and of course if you're thinking this way it's actually um the the subsidy runs the other way around it's not the deficit country that is subsidizing the uh sending country the sending country is sending products and receiving paper um but it it it's not in his mind what 1:07 he sees is uh other countries seem to be doing well in some ways therefore that's at the American expense therefore that's at his expense and therefore they must be punished and then he throws around these numbers which are little fragments of briefings ill-remembered snatching off displays that were shown to him at his lunch and and at trying to make sense of all of this but meanwhile what we all face um you know we there's been a lot of talk over the past week about the risk of stagflation in the United States but if it sounds like what we're heading for is not stagflation at all but a true international depression if Trump makes good on this these these are smooth holly level uh uh trade blows on a world economy that's already you know got a lot of question marks over it um it's the destruction of American leadership and he's inviting people to uh negotiate with him after having demonstrated that his word is worthless who's going to do a deal with someone who said 'Well I 2:02 know I signed this agreement with Canada and Mexico in my first term i don't consider myself bound by it at all.' Well if you're not bound why would anybody sign a new sign a new deal with someone who repudiates the old at a whim let's uh just briefly dip into the president's remarks uh again and see if um where he is at in this uh charitably put freewheeling um presentation at the gate because the money is so enormous that you're talking about there's never been probably anything like it in terms of the enormity and there are a lot of bad things happen at the people that do the check-in and they're looking at 10-year jail sentences if they do play we're going to treat them so good but if they cheat uh the repercussions are going to be extremely strong foreign nations will finally be asked to pay for the privilege of access to our market the biggest market in the world we're right now the biggest market in the world we had a great country four years ago in terms of the economics we were doubling up on China we were doing so well nobody was going to catch us but so much of it 3:06 slipped away over the last four years under Biden i campaigned on this policy last year and today that promise 34% was made and it was also a promise that was 32% Japan an ally 24% i guess we'll have to hear whether and when they're coming into effect or if this is the start of a negotiation let's go back to the president for a moment and whether they're stacking Roger because we remember we also have sectoral tariffs in different industries including autos aluminum steel so in certain instances um the tariffs on the screen don't may not even fully capture um the the degree of protection reflected in the administration's overall trade policy tariff rate to be zero then you build your product right here in America because there is no tariff if you build your plant your product in America and we've seen companies coming in like we've never seen let's go to David let's go likewise to all of the foreign 4:02 presidents prime min what he the president what the president just said is there's no tariff if you build your plant in America and that just goes to how he doesn't understand anything say okay I'm I'm an auto I'm Nissan I want to escape the auto tariffs I build my plant in America um do I escape the tariff well does your car use steel does your car use aluminum does your car use glass no you don't escape the tariff you escape the tariff on your product but you don't escape the the tariff on all the inputs into your product um so every every aspect of the American economy is going to be distorted and made more expensive and made less competitive what he is doing is essentially and I think we should he's removing the United States from any idea of competing with world markets this is the economic policy of Juan Peron which is we're going to have an Argentinemade everything all the way up the value chain argentine iron going to make Argentine steel to make Argentine cars and the problem is none of those things are competitive with any unworld markets with all the products that are traded more or less freely and David you know 5:03 it's one thing to target one country or some number of country with tariffs and anticipate that that ultimately they'll come to the table in search of some type of accommodation or settlement because of the importance of the US market but just talk a bit about uh the geopolitics of essentially opening up trade wars with every country in the world what are the the the risks for the United States well um the risk is that other countries start working around it um that he he he repeatedly described the United States as the largest economy in the world uh which I think is true but before Britain left the European Union the EU was the largest economy in the world um and and China is catching up what if there were an EU China free trade agreement that's sort of unimaginable today david just just to break in one sec here we're getting some uh I'm seeing some feedback here that Trump is saying he will establish a universal baseline tariff of 10% that will apply to all countries in 6:02 addition to the numbers he's already announced so that means a country like China this is the New York Times reporting will face a 44% tariff on top of the 20% that that Trump has already imposed to answer the question that you were airing earlier i mean guys this is this is big i wow or or it's like the dictator from Woody Allen's Bananas it's just a spewing of random digits that make no sense and that um are just going to invite stock market crashes and disaster because none of this works in any way um I I think one of the there's a kind of war on math here um that none of this works all it does is cause dislocation disruption and eventually recession and depression yeah sean what do you think about that again we don't know when these tariffs yet are coming in we haven't got to that point in this this rambling uh address 7:00 but I mean again these these I mean this would be we'd be stepping back a century Sean in terms of uh the global economy um we're going pre- B Breton Woods at this point yeah yeah as you as you both know and and some of our listeners and viewers will know I spent some time in Ottawa and if you you spend a day in Ottawa you hear the proverbial story of the uh the Canadian uh automobile that crosses the border half a dozen times or more through the production process and so as as as David says I think one of the open questions here is if the president understands the um the sophistication of these integrated supply chains and the costs and disc distortions of trying to effectively unravel them um I I think there's a lot of people in the next few days are going to have to figure out what precisely this means when different inputs are subject to different tariff rates uh and the entire process now uh is at the whim 8:03 of politics as opposed to markets uh David I want to come to you with a question because there's been some discussion um that in in the past few weeks uh the the administration's tariff policy uh was being assumed by the the new US trade representative Jameson Greer who is on one hand a true believer but on the other hand more of a sophisticated technocrat than Howard Lutnik and the others who were carrying the ball uh early after inauguration uh are you familiar what do you think of that discussion and and and in any way does today's shambolic announcement uh uh uh challenge I I that that narrative um Mike Murphy the veteran campaign guru had a line in 2016 that teaching Donald Trump to talk about policy was like teaching Charles Manson to Foxrad he he could maybe do a step or two but then he put a pencil in your eye because he was Charles Manson so I think um the 9:06 technocrats um have a lot on their consciences here that there has been a big project on right and left over the past half decade to kind of rehabilitate tariffs and uh the Huelet Foundation has been a big charitable which is a huge foundation has been funding a lot of this work and what they're interested in getting they just want they want something new they're bored HIT Packard is Hillet Foundation is bored with the world economy bored with the market um and they want a new paradigm and So they they spread money across the landscape to encourage clever people to come up with alternatives to the new paradigm and one of the it is true about tariffs that on a blackboard you can create scenarios where a a tariff is welfare enhancing if you if you assume this condition if you assume that condition if everything is done and if if if there's no politics and no friction and no other countries in the world you can create a scenario where in a one uh there's one two countries trading with 10:01 each other one country can impose tariffs on a way that is welfare enhancing inside that country it can theoretically be done just doesn't happen in life true in theory not not in practice um well those people are now working for Trump and they have they convinced themselves they could make use of Trump but anyone who convinces himself or herself that he can make use of Trump is a fool because Trump is uncontrollable he is driven by rage he is driven by malice he is driven by hate he is not interested in welfare maximization except him himself and maybe on a good day some of his relatives um and on a bad day maybe Vladimir Putin um and so of course you get this chaotic mix and the technocrats are to blame here they should have quit they should have refused to be part of this they should be out there sounding the drum because the the way you stop a global depression right now is for House and Senate to vote you know what Mr president we delegated these powers to you over the years we made a big mistake you've abused them we're taking them back the Constitution puts us in charge of trade we're taking our trade authority back we're going to write the tariff bill 11:02 yeah let's go uh dip in again with the president we are uh again getting reports that there is no press release no one knows what's going on people are squinting at these charts trying to see if their country is on it and what the number is but we know the universal 10% tariff is on top of these already very significant tariffs he's levied against China India and others let's listen in a bit country but we have to start taking care of our country now we can't do what we've been doing for the last 50 years from the day of my election the stock market went up in my first term 88% with NASDAQ going up 65% more than We're we're getting some reports uh from journalists who are on Canadian journalists on site that Canada is not on the list uh and that they're awaiting more details from the White House so that could mean that not on the list Sean means means not on the not on the prop there might be it might be a very 12:03 big list like this is just so crazy guys this is really crazy um as I said I I said earlier he didn't know at lunch what he was going to do and I said I don't know that as he's talking he knows what he's going to do and when he finishes nobody will know what he has just done yeah yeah and we're left squinting at a chart to try to see the difference between Cameroon and Canada to to know what's going to happen here uh I'm sure details will be will be forthcoming at some point i'm I'm partly in Jess but only partly and it's important to know a note for audience members one um Canada US do something like a trillion dollars of trade per year uh and two bilateral exports to the United States represent something like a third of Canadian GDP so here we have one man rambling on stage and ostensibly his 13:00 staff scrambling to make sure that the policy details align with his rambles um and it goes at the heart of a trillion dollar bilateral relationship and one-third of of Canada's o overall economic activity it is a reminder of the extent to which Canada's economy is now at the whims of of President Trump yeah well let's listen to a few of those whims as they're being spun out in the Rose Garden it's such an honor to be finally able to do this if you look at China I took in hundreds of billions of dollars in my term hundreds of billions they never paid 10 cents to any other president and yet they paid hundreds of billions so much so that Biden couldn't do anything they wanted to try and terminate it because he had a very special relationship with China you know what the relationship was he had a special rel but the numbers were so big the numbers were so big that they couldn't 14:03 do it so they did ease it up they did things that they shouldn't have done they made it a lot more comfortable for them but they couldn't do it because the numbers were hundreds of billions of dollars and I did that and uh we were on our way to doing something like incredible and then we had a very bad election happened a very bad election a lot of bad things happened so when I said we got to do it again I said we have to make it too big to rig and we made it too big to rig and we won in records and it was a monumental win and it was such an honor to see so many of you like Brian and your friends uh okay let's here with us bail on this um the Canadian dollar I think briefly popped over 70 cents when people were squinting at the chart and didn't see uh Canada's name on it so let's let's see if Canada shows up um obviously there will be some some larger kind of statement we hope um policy brief or something uh that gets dropped after uh 15:04 the president stops speaking but we know with him that that could be quite a while david talk to us about these very high tariffs on allies like Japan Taiwan i mean you know America is confronting its single largest geopolitical threat in in the form of China um and here you have these two critical Asian partners with if we're correct that the 10% global levy is on top of levies in the 20s and 30s% on Taiwan and and Japan you're just talking massive massive tariffs on key you're talking about welcome to the Chinese century um and uh because Japan and uh Korea they have to trade with somebody uh they are they are highly specific economies they don't produce everything they don't have the delusion of self-sufficiency they have to trade with somebody and if the United States says we are leaving the global economy the globe the globe is still 16:03 there uh the United States may disappear from it but um but India and China and others beckon um and one of I mean it's very clear in Trump's the only allies he cares about are Russia Elsa uh Saudi Arabia and El Salvador um and that's it that's that is the America that is Trump's legacy that is the American alliance system um he's at the same with there have been leaks that he's that he's actually contemplating unilateral military action against Greenland which is you know a war with Denmark which is an NATO country i mean a lot of this is madness but because it's mad we shouldn't assume that none of it will happen david speak to Canadian policy makers for a moment as someone who who's committed to free trade open markets uh and a a system of of global cooperation what is your advice to Canadian policy makers in this campaign with some are arguing we need to revisit our relationship with China others talking about uh uh strengthening economic and and security ties with Europe um then 17:06 there are others who are saying of course notwithstanding the Trump administration threats and provocations we are fundamentally a North American country what the heck are we supposed to do in the face of something like this well geography doesn't change of course Canada is a North American country and the United States in any under any rational government of the United States would be of course the most important partner for Canada inevitably um uh but you can't wish any of this away and we have talked often on our conversations together about the need for a plan A and a plan B and plan A was to believe that the traditional methods of diplomacy with the United States would work even with Trump um and I think plan A just went up in smoke uh so that means plan B uh and that means this is and let us have no illusions that this is going to lead to the same prosperity that you got from plan A when in the days when plan A worked but if your partner in plan A won't play ball then that means can well Canada should 18:05 be and I I'm should be working with Mexico to in the North American context with Asian allies with Chinese I mean if if Trump determines that the United States is going to exit every bilateral arrangement break every article of faith And if Congress doesn't stop him which it can but if it declines to do that partners like him are going to be left with no choice to make whatever arrangements they can including for their security i mean if Trump is really talking about invading the territory of Denmark Denmark needs security partners uh your the person who's threatening to invade you is not a security partner yeah um let's uh let's take a couple questions because we've had uh um an active group um in the chat um so uh David I know they're keen to put a couple uh questions to you so I'm going to go over to Elliot Gross our uh producer here who's in studio and see if 19:00 she can uh read us a question that um that you can give some thoughts to um Elliot we're just going to give her a sec as we do that David uh let me just add one more question we're getting um some reporting again all this is just so um uncertain uh so take this all as information that's going to need to be clarified that the Canada and Mexico will still face uh the 25% fentanyl tariffs that these are not in a sense off the table and um obviously we does the 10% baseline tariff get stacked on top of the 25% auto tariff so we've got 35% on autos I don't know there's a lot of details to figure out here uh David but when you put this all together and you think of Canada's situation visav some of these other allies and again it was a big list there that he showed on the stage are we maybe seeing something positive that this this president knows that it's dangerous to pick a a fight with Mexico and Canada simultaneously 20:05 i think you're seeing uh a heart attack for the whole automobile industry in the United States um so I uh one of the things I was I was I was have spent a little bit of time talking to auto dealers so one of the um things that seems to be happening and again there's a lot of uncertainty but if you placed an order for a car two weeks ago or a car to be made to your specifications and that car is not on the lot yet the tariff will hit before the car arrives so you may have put down you may have bought a car for let us say I don't know $35,000 you put down a $3,500 deposit uh to and then they say 'No the car is not $35,000 it's $45,000 or whatever it's going to be.' You then have a choice do I pay this extra windfall penalty tax or do I walk away from my deposit and a number of people will say 'You know what i think I better walk away from my type of deposit rather than sign up for this giant tax increase.' So there be there 21:04 could be autocast cancellations there could be just a seizure of economic opportunity economic activity i mean the funny thing is you know the people around Elon Musk they all think they're the heroes from Atlas Shrugged and they've turned into the villains from Atlas Shrugged in that vein may I just say uh one of the United States leading trade policy experts someone I know who David's work has relied upon in the past Douglas Orwin is estimating that the net effect of these tariffs as we understand them in this moment is bigger than than Smooth Holly the tariffs brought in the 1930s uh that exacerbated uh the Great Depression and so David's uh insight that we could be heading in a similar direction if indeed these tariffs are implemented and remain in place for some time may regrettably prove prove right and again it has to we do not have to have the global depression all that needs to happen is majority of Cong the Republicans have tiny majorities in the two houses of Congress so you know what 22:02 we're taking this power back yeah let's take a couple of uh let's take a couple of audience questions here so LA Gross over uh over to you okay a question from the chat they're coming in super quickly so sorry if I miss your guys' names um someone's asking when should the Liberal and Conservative leaders respond yeah so David what do you think do we do we just kind of let this whole weirdness that we saw today and whatever comes out of this um I don't know just look look at it like a thunderstorm and uh let it roll by or is there I don't know is there a reason to engage right now it seems like the fog of war at this moment people with responsibility shouldn't respond until they know what they're responding to so um it's fine for us who are trying to help people make sense of what's just happened to use our best guesses our best judgment speak freely um if if if we're wrong here on the hub about any particular the consequences are you know 23:05 we we're wrong um if a political leader is wrong the consequences could be more serious so I would strongly advise leaders of parties uh diplomats just just wait till tomorrow at least uh be sure because again this this could all fall apart really fast we may wake up tomorrow morning and the world economy uh world stock markets crater congress reacts or the president panics and uh and that chart that he looked at at lunch he comes out with another chart from the next launch yeah well the uh wise words let's go back to LA Gross uh the chat is super busy so we're going to get to uh we you got to go at the top of the hour David but uh we're going to try to get some more questions to you now okay this is a question for David what are the chances that Carney has managed to make a one by one deal with Trump exempting Canada to the worst of this yeah so the perception David that uh Trump and Carney had a very good call um the other week uh does this kind of set the Liberals up for um I don't know if 24:03 if Canada was is not on this list and we're only subject to 10% that's not great but our currency has probably adjusted 10% since Trump was elected uh does this create a perception that the Liberals are the kind of horse whisperers uh when it comes to the Trump administration well uh two problems here first um uh nothing said on a phone call with Donald Trump can be relied upon um so we we don't know what happened um we don't Trump Trump's word not is not good but the thing that Canadians need to understand is even if somehow Canada gets more lightly soaked by this global storm if there is a world economic crisis Canada's going to feel it canada's interest is not just bilateral access to the US market you know minus 10% of waste and stupidity but Canada's interest is making sure that the whole world economy functions if Trump steers the world economy into a depression Canada will suffer even if Canada continues to have less hampered access to the US market than other countries do 25:01 and there's no guarantee of that the mere when Trump says 'I had a good call.' You know Trump is never willing to say hard things to people's faces he only says it to people's backs yeah uh let's go back to Elliot let's get some more questions in uh for David in these remaining five minutes with us is there anything uh that could make Trump reverse himself or is this set in stone would a big enough market fall make him change a question from Ryan in the chat so there's a perception uh David that Trump is uh highly sensitive to the stock market but in some ways I think maybe the last month or so uh we've seen something else here um you know his he and his own officials are now talking about uh you know corrections are corrections we may have a recession we're going to come out the other side stronger um are they in a sense a little more committed to these policies and the potential negative economic consequences of them than in the first administration he seems 26:01 committed to this theelma and Louise joy ride and he surrounded himself with people who are time servers and cowards um that uh and this is why I when you ask the technocrats I I I think there are people of bad bad or weak character who are around him um and so that uh you know and they were selected for that they were selected for weakness but there is remember this is Congress's power he is wielding with Congress's delegation so yes there's something that can stop him and that is for half a dozen Republicans in the House and half a dozen in the Senate to vote with the Democrats to say you know what we are avoiding all of these emergency powers we the Constitution put trade in our hands we've delegated it to the president over decades because we thought the president was more responsible about trade than Congress this president has proven himself less responsible um it's like giving a Ming vase to an orangutang he's just smashing take it away from him congress can take it back um and assert its power that way but don't I I don't know the hope of reasoning with Donald Trump at this 27:01 point because his egos is involved i mean what does he say oh the this the financial market said the most cherished of my idea idea of my life is dumb and stupid and harmful well they've been this market has been telling him that since January the most cherished idea of your life is dumb and stupid and harmful don't do it and he's been doing it anyway he's not I I I don't know let's hope let's hope bad stock market news stops him before there's real economic pain but that doesn't look to be the way things are breaking certainly today this afternoon okay uh squeeze in a couple more questions ellia over to you probably be the last one that we have with David so question from Tom um who do we see is leading the opposition against this internally in the US who um in the Democrats or Republicans is going to step up to challenge this great question Tom so uh David we've you know we've seen um the legislative branch so far uh be pretty permissive um with regarding this administration not just the Republicans if you want to be honest about it you could you could say the Democrats similarly to the extent 28:06 that they have influence are are kind of on their back foot too the person who could stop it is John Thun the Senate majority leader um and half a dozen h uh rational-minded House Republicans they could stop it they could stop it this afternoon they could stop it first thing tomorrow morning that's the locust of power is again these are delegated powers the president is not wielding constitutional powers he's wielding delegated powers the delegation can be removed right okay david you've been super generous with your time i'm just going to allow Sean Spear to get a final wrap-up question in and then uh Sean and I will keep going uh tons of activity in the chat there Sean so we'll get to some more of those questions yeah David looking forward what's um David looking forward what should we be watching for even in the next 24 hours or so to make a sense of the of the significance of of today's announcement well in addition to the the market the financial markets we have seen all kinds of signs of trouble 29:04 from the um the metrics that measure manufacturing activity the manufacturing industries do not love this um uh that there's there in all this the producer reports are signs of of trouble um and we are going to see more and more of those merger and acquisition activity that doesn't happen um we we today in Bloomberg the head of the Danish the owner of the company that makes OMIC said I am not going to be investing in the United States i'm looking for deals in India and China so the the harm will spread as it did with Smoot Holly from the financial sector to the econ the economy of things um and I think we we we should be looking at for signals from the economy of things yeah well said thanks David we're just so fortunate to have you here at the hub especially uh during these tumultuous uh times thank you so much for your wise uh words your insight your considered opinion uh it's just such a pleasure to connect i wish we didn't have to be here this is th it this does feel like one of those August 1914 moments where the world is walking into something so crazy so stupid so destructive and so tragically unnecessary all of it done driven by one man's ignorance and malice

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