Canada’s on the brink of trade peace with Trump

The relationship between Canada and the United States has been tense, to say the least, over the last several months. We've had Donald Trump threatening a trade war tariffs since November 25th, 2024. That was almost two full months before he was even sworn in as president. It's caused economic heartburn, you might say. We've seen the job numbers go up. We've seen trade fluctuate. We've seen people put investments on new plants or new jobs on hold. Hello, welcome to the Full Comment Podcast. My name's Brian Lilly, your host. And today, a conversation with the man who is now charged with representing Donald Trump and the United States here in Canada, Pete Hoekstra. He is a former congressman. He is a former businessman. And he's also been an ambassador for Trump in the past. We had a conversation, and you'll see that, well, he's not going to get into some issues. He's not going to get out ahead of his skis or ahead of the president. But he can be blunt at times. He's also very warm and charming, and he knows Canada well. Here is the conversation with Ambassador Pete. Ambassador Pete Hoekstra, welcome to Canada. Good to speak to you again. It's great to be with you. Thank you. Now, if you go by Pete, not Peter, can we call you Ambassador Pete? It just sounds friendlier. That is absolutely fine. Maybe on occasion, you can even call me Pete. But I will not be offended if that happens. Well, I want you to, you know, before we get into the meaty details, and there's a lot of meaty stuff to talk about between our two countries. I know who you are because you used to come on my TV show on Sun News Network, but that was more than a decade ago now. And a lot of people don't have a clue who is Pete Hoekstra, who's this guy that Donald Trump has sent up as his ambassador, his representative in Canada. So you grew up in Michigan, right next to Canada. Give me the elevator pitch on who is Pete. I am a Dutch immigrant. Parents were liberated by Canadian troops in World War II. 1956, my parents left the Netherlands because my mom would say she left for an adventure. My dad said he was leaving because they didn't necessarily see a lot of opportunity in the Netherlands. The Dutch, after World War II, continued fighting in Indonesia. So they really didn't get focused on rebuilding until 1950, the early 1950s. Parents moved from Holland, the Netherlands, to Holland, Michigan. Real risk takers. But no, it was. Neither one of them spoke English. None of us spoke English when we came here. So I grew up in Holland, Michigan. Attended local schools. Graduated Hope College. Got an MBA from the University of Michigan. Moved back to Holland, Michigan. Worked for the office furniture company Herman Miller. 1992, I woke up in the morning or I woke up in the middle of the night and I told my wife, I think I'm going to run for Congress. Diane said, go back to sleep. You'll feel better in the morning. I didn't feel better. In 1992, I ran against a 26-year Republican incumbent in the primary. I ended up with 48% of the vote. It was a three-way race. So for all intents and purposes, I was elected to Congress in that election because it's a solidly Republican district. Served 18 years in Congress. The highlight of being the highlights. Worked with Newt Gingrich on the contract with America. And also had the opportunity to chair the Permanent Select Committee on Intelligence. Left Congress in 2010. I thought I was moving out of politics. In 2016, Donald Trump came back and asked me to help lead his campaign in the state of Michigan, which I did. We won Michigan. President offered me the job of representing him in the Netherlands, which I did for three years. 2024, as the president tells it, he called and said, hey, Pete, I need you to lead the Republican Party in the state of Michigan. And I said, nah, I don't want to do that. I'm a cause guy. I'm not a political operative. And he will say, I talked to Pete some more, and Pete said, yeah, I'd love to do that job, Mr. President. Thank you for asking. And we did. And I took the job. The president and his team gave me all the support that I needed. And we won a state, one of the seven battleground states that I think much of the Trump team thought we would never be able to win. But because of the close cooperation of the party in Michigan and all of the support that we got from the Trump team, we pulled it out. We won Michigan. President and I had a discussion. He said, Pete, what do you see yourself doing? I said, I think I see myself as your ambassador to Canada. So you asked for Canada? I asked for Canada. And he kind of looked at me, and I kind of like that idea. And so here I am. That's how I got here. I imagine that as you were growing up, you ventured across the border now and again. You know, those of us that grew up near the border, it's a pretty common thing. I know your wife has family in British Columbia. But have you traveled the country much before you arrived five weeks ago? Oh, yeah. I mean, I had an uncle in British Columbia in Vancouver, just outside Vancouver in Richmond. So I've been there when I was a young kid, probably 12, 13 years old. My sister or my wife's sister lived in Smithers for about 20 years. And so we've driven to Smithers, taken the ferry from Vancouver Island up to, I think you go to Prince Rupert, and then you drive back down to Smithers, and then drove back down through Banff and Jasper, went through Lethbridge, because I had an aunt who lived in Lethbridge, have family that lived in Ontario. We've been in the Maritime Provinces. I'm not sure what family it was, but it was in Thunder Bay, Ontario. So we've been there. You've traveled to more parts of Canada than an awful lot of Canadians. Well, it's a beautiful country. I mean, Vancouver Island, Victoria, British Columbia is beautiful. My aunt would always say that the beautiful thing about Alberta, it's got this huge, huge sky, just a big sky. And you get to the Maritimes and Niagara Falls. I mean, yeah, we've traveled to a lot of places and we've been thoroughly impressed with the beauty and with the people that we have encountered in Canada. So I know you addressed this a little bit at the Empire Club luncheon that you spoke at. It was there in the crowd and you were asked about the 51st state comments, because you had said, oh, that's over. And then the president brought it back. Since then, I've had people say to me, well, this guy can't be close to Trump if he made that mistake. Do we really have an ambassador that knows the president? You seem to have made, you know, say that, yeah, I've worked with him on two campaigns, one of Michigan twice. Talk to me about that. Answer those people who are saying we don't have a guy who is actually connected to the guy who is the ultimate decision maker in the American government right now. Well, obviously, I'd say these are people that didn't read my comments. I said it was addressed. It was talked about between the president and the prime minister, I think, in a very friendly and effective way. And I said, if it comes back up, it will come back up only because Donald Trump has decided to bring it up or because your prime minister has decided to bring it up. But for the rest of us that are working on it, we're working on building a strong, effective partnership that benefits the people of both countries. But, you know, if Donald Trump wants to talk about the 51st state, I made very clear in that statement, go back and read the quotes. I said if the president, it will come up if the president wants to talk about it again, far be it from the ambassador to Canada to tell the president what he can or cannot talk about. I'm not going there. Well, that that would be a career ending move. That would be a career ending move. So for the people that are saying, you know, the, you know, I'm not going to get I have a good relationship with the president. We've been working together for nine years. You know, the yeah, they could they can interpret the relationship however they want. I'm confident in the relationship that I have with the president to get done what I need to get done in Canada for the American people, which I think will benefit the American people and which I think will benefit the Canadian people. I want to ask you on what it's like working with Donald Trump the second time around compared to the first. But if I can stick with the 51st state comments for a bit. Is it your view that Canadians took that a bit too personally that between that and the terrorists where we're making it very personal in terms of the emotional response that a lot of people have had? The you know, I'm as the US ambassador, I'm not going to get into characterizing the Canadian people, their reactions to the policies that the United States is going to put in place that affect that relationship. The Canadian relationship is and the Canadian response is the Canadian response in private. You know, I've talked to some of your political leaders and I may give them my perspectives and my views. But I don't think I don't think that you'll see me talking about that in public. My job is to talk about the American agenda, the the agenda of Donald Trump and where we want to go and those kinds of things. But I'm not going to get into characterizing the responses, although, you know, the other day, I think I did characterize what I said was a encouraging response by your prime minister when the talk came out about increasing tariffs on the aluminum and steel. And I characterized that that's a very encouraging response from the prime minister. So, you know, but as a habit, I don't think I really want to get into characterizing the Canadian response and those types of things. So you were ambassador for three years and it was 2017 to 2020. Is that it in 2018 to 2021? OK, so very different experiences, I'm guessing. And I don't recall. I mean, there was a lot of angst in Europe about Donald Trump, and you've made comments about that. And, you know, Europeans thinking that tanks wouldn't roll in from Russia. Well, guess what? We can talk about that in a bit. But, you know, there wasn't this sense of, you know, trade war, existential threat, things like that. It seems like it's a very different environment for you now, but also it's President Trump is a very different president. He's moving with speed that he didn't have the first time. Things are moving a lot faster and for many reasons, a lot more unpredictable as leaders react to what he does and things change. How would you characterize it so far? I know it's early days. So far, the difference between Trump 1.0 and Trump 2.0, who is coming in with a very specific agenda. Well, I mean, a couple of things. I wouldn't underestimate the hostility that an ambassador going into the Netherlands would face representing Donald Trump in Europe in 2018. All right. You know, the Europeans were not very excited about a Donald Trump presidency. But in, you know, Donald Trump 1.0, he came in with a very specific agenda. You know, what were the things that he wanted me to work on in Europe? NATO funding, Nord Stream 2, and the threat from China. And of course, we work the other things that an embassy normally do, which would be economic investment and trade and those kinds of things. You know, the Dutch are, like Canada, they are a huge foreign direct investor in the United States. It's a significant trading partner for us, but it's also a direct source for foreign direct investment. They are a great friend and have been a great friend of the United States for a long time. It's probably the only ally that we have that has never fired a we've never fired a shot at each other in anger. OK, you can't say that about our two countries. We can't say that about our two countries. But it's it's it was a long time ago that that that happened. So there were some similarities. But I think you're you're absolutely right in identifying that the Trump team this time around is is very, very focused. They're very unified and they know exactly where they want to go and they want to do it with a sense of urgency. You know, the border is a great example. You know, less than 100 days, the border was secure. We went from a situation where thousands of people are coming across the border to a situation where today it's a trickle. That was a that was a item that the president put a real focus on, said, I want to get this done because it's, you know, it impacts the safety and the security of the American people. It has budgetary implications. It has national security implications. I want to I want to get that done. The president is working on what is being described as the big, beautiful bill going through Congress. It's passed the House of Representatives. It is now working its way through the Senate with the expectation that that bill is going to get done this summer, which does what it energizes our economy, which puts us on a real growth path, benefits the prosperity of the American people, but I think also puts a big debt into our deficit, which is another priority for the president. The trade tariff deficit or the fiscal deficit will address the fiscal deficit. You know, I did this. You know, we did something similar, but not nearly the scale of this. When I first got to Congress, I worked with Newt Gingrich on developing the contract with America. You know, we took Republicans, took control of the House of Representatives for the first time in 40 years in 1995. We cut taxes. We reformed welfare, you know, and we moved forward. We balanced the budget. And what happened? Working with Bill Clinton, we achieved those things, but we ushered in an era of prosperity to the American people that resulted in what? Four years of balanced budgets. And so, you know, and Donald Trump is feeling the same kind of urgency and optimism for making things better for the American people right now. Well, I have to say that when I watched President Trump's speech on Inauguration Day, I heard what he wanted to do to the American economy. And I'm talking outside of the tariff issue. This is about how he wants to fundamentally restructure the American economy, the global trading order. And I thought, wow, he is going to make the U.S. boom. We have to get our house in order or we'll be left in the dust. And I think we're hopefully in the process of doing that. You guys are about to unleash your economy, is my belief. You know, we'll deal with the tariff issues and negotiations on trade. But you guys are set to focus on the American economy and the American worker in a very serious way, as Prime Minister Carney said when he was at the White House, meaning I believe you were at. Right, that's exactly right. And, you know, we're watching very, very closely the policies that the Canadian government and your new prime minister and your new government are putting in place to, as I believe your prime minister says, to make Canada the fastest growing economy in the G7. Well, you know what? I think that's a great race to have and a great competition to have with our friends to the north. As to who is the fastest growing economy in the G7. And we will not concede that position easily to our friends to the north. If we're both racing for it and battling out for it, it's good for everyone. Maybe not the other countries, but it's good for the two of us. No, it will be good. It will be good for everybody in the G7. America doing great and Canada doing almost as great will be good for everybody in the G7 and it will be good for the world. What about the reception you've received? Are you sensing hostility? Is it, you know, there were a lot of people excited to see you on Tuesday at the Empire Club, but what's the breakdown between people who are like, yeah, it's great. Love America to, oh, I'm really upset right now. No, I think there is apprehension. But, you know, the bottom line is when I meet with Canadian government officials, you know, they're, I think, very optimistic, recognize that they have to get through this process with us of redefining the relationship. But I think they're very optimistic. We're going to end up in a good place that we will have a win-win. I think you're also, you know, when I meet with your business leaders, they recognize the investment and the commitment and the relationships that they have across the border and that it's important to move those to a new place and they will move to a new place, but they're moving to a better, that there's a real possibility we will move to a better and a stronger place than where we were, that we will improve on it. And, you know, from the opportunity that I've had to meet with everyday Canadians, I hope to meet with a lot more of them all across the country. Yeah, there's some apprehension, there's some, you know, some would characterize it as maybe disappointment with the relationship. But, you know, if we get both of these economies humming, we keep, you know, we go after the fentanyl issue together, we confront China together and we start having some real success in all of those areas, which we have had. I mean, you know, this week, I think the numbers came out, the estimate is we've got 30% less fentanyl coming across our southern border. And, you know, this is an issue that, you know, hits at an emotional level in both Canada and the United States. We both lose way too many lives each year to fentanyl. And so, if we can get that under control, you know, these are things that will change the lives of the citizens in both of our countries. You've heard the people, though, cast doubt on fentanyl coming from Canada. I've talked to people in Canada who say, no, it's very real and it's a growing problem. But you've heard a lot of officials, a lot of people in the media say, this isn't even an issue. Why are they talking about it? We're not the problem for illegal immigration. I'm assuming you've spoken with Tom Holman about this. He's very seized with this issue. He also knows Canada very well, coming from just, I think, a 20-minute drive from the Canada-U.S. border. What is the feeling, the information, the briefings that you've received from border officials on how they view the Canada-U.S. border? Yeah, I've got a lot more to learn about this. I don't think the issue is, the primary issue is not about fentanyl moving across the border from north to south. That's not the issue. The issue is, on a per capita basis, the United States and Canada are losing about the same number of people each and every day, each and every year, to overdoses of fentanyl. It's kind of like the goal, the aspirational objective, I think, for both of our countries should be, let's make North America fentanyl free. Let's get that number down as low as possible, which includes, yeah, we have to, you know, manage our borders. But perhaps more importantly, we have to manufacture or manage the manufacturing, the production of fentanyl, wherever it occurs, because we know we're going to go after this very, very aggressively in Mexico. Well, we live in a very dynamic world. And so if we control and, you know, really put a cap on stuff coming from Mexico, the cartels are going to look for other ways to get that in here and get it into the United States. And one of the natural places they will look is Canada, you know, 4,800-mile border and those types of things. That's why, you know, we want real law enforcement cooperation, coordination, and those types of things. Not that Canada is the problem, but the recognition that by working together, we can make sure that the U.S. is never the problem for Canada and Canada never becomes the problem for the U.S. So let's work on this together and let's strive towards, like I said, making North America fentanyl-free and making both countries safer for our citizens. When you were speaking to the Empire Club and I'm walking around and I'm just chatting with people, that's where I got the info and started checking with government sources that a deal was closer than thought and that it could come as soon as next week. Now, I know as ambassador, you can't step on your boss's toes and you can't announce before he's ready to announce, but you have made comments on the discussions. How serious are the discussions between Prime Minister Carney and President Trump? Well, when both of our leaders and their teams are saying our number one objective is economic growth and prosperity for our people and recognizing that the tariffs and these types of things right now are probably the major impediment that we share, that they're going to be spending a tremendous amount of time and energy trying to get this resolved. Canada is our second largest trading partner. So this needs to be resolved. So my assumption and from what I'm hearing that there's a sense of urgency, a sense of importance on this, and it takes two to get to a deal. But I can't tell you how soon we will get to an agreement. I would hope the sooner the better, but this will be a decision that is made between our Commerce Secretary, Secretary Lutnick, and ultimately the President of the United States that said we've gone far enough on enough points of discussion that we can announce that we have an agreement. That then, on the Canadian side, becomes a discussion and a decision by your team and your Prime Minister. My understanding is both sides would like a deal before the G7 starts next week in Kananaskis. So, I mean, hopefully both sides can get there. Do you have hope on that front? Well, I have hope. I have hope that, you know, I understand, you know, that on Friday there was hope, you know, that maybe on Friday the President, this past Friday, that the President and the Prime Minister could have announced an agreement. But, you know, I always have hope. But like you said, I can't get out in front of the President. But more importantly, I've been involved in enough negotiations on a wide range of issues that, you know, you're moving through and you're knocking down these issues consistently and you say, wow, we're getting close. And then you get to, you know, the last little piece and you say, that's all we got to get done. That's it. And then we're there. And we've got, you know, we've gotten this much done and now we just got this little bit to go. So we ought to be able to get that done quickly. And then you find out that the last piece is a lot more difficult than what you thought it was going to be. Yeah, I think, you know, I haven't negotiated big trade deals. I think most people could relate to negotiating an employment contract or selling your house or buying a house. And at the last moment, it's that, as you say, that one little thing that becomes a sticking point, a burr under the saddle, as you were. Let's hope that we can get past that. Unless I misread your comments the other day, though, you did make comments about tariffs sticking around. Can you explain that? I mean, I, you know, 50 percent, I sincerely hope not. 25 percent, I hope not. I do know that when I was down in Washington a few months ago, talking with different people, including folks like Senator Kramer of North Dakota, he, you know, people were saying we could end up with a 10 percent global tariff. If you say tariffs are going to be here permanently, does that mean on everything? Does that mean, you know, we'll redo the the trade deal and they'll still be 25 percent tariff? What what do you mean to help people understand and feel better? Well, the president is transforming, you know, our trade relationships. He's also transforming our budget process and those types of things so that we can move toward more of a balanced budget. And I think the president has been pretty clear that saying, you know, tariffs are a part of that new framework. But I think, obviously, with the discussions that he's having, you know, we've got a framework for an agreement with the UK. The president has talked with Xi and, you know, the past few days, obviously, lots of discussions going on with a number of different countries that expecting that there's going to be a single agreement across the globe, I don't think is in the cards. My expectation is that we will see multiple bilateral agreements between the US and other countries. We may continue with a trilateral agreement similar to USMCA, you know, as we have these discussions, you know, we'll have to take a look at how we deal with the EU. But we had our, I think it was Secretary Greer, you know, for USTR talking, yeah, our trade representative saying that he was having, he had a good round of talks with the EU today or this past week, but that implying that they're all going to end up at the same place, I don't think is realistic. OK, you know, Canada is going to end up in a different place than a lot of these other countries. And these countries are all going to be at different places. So the I don't think you'll see like one global tax. And I don't think at the end of the day, you're going to see 50% tariffs on aluminum coming from from Canada. I know that when Premier Ford was in Washington meeting with Secretary Lutnick, one of the things that he said to the Canadian delegation is, you know, after Liberation Day, your big April 2nd tariff announcement after that, you're going to be one of our priorities. Well, of course, we were in an election, so you couldn't have negotiations of substance with us until that was over. So here we are just over a month after and things are looking promising. So I like that. Premier Ford, you met with him when you were in Toronto. I'm sure he talked extensively and exuberantly about the Ontario auto sector. As one from a an auto state where the trade in auto parts and, you know, combined manufacturing has been going on for more than a century. How do you view that? Does Canada still have an auto sector at the end of this? Do you know what the plan is? Well, I mean, we will see the plan when the President and Howard Lutnick and your Prime Minister all agree that we have a plan and they're going to announce what that plan is going to be. So again, far be it from me to, you know, get out in front of the President. But, you know, when Doug Ford talks about the auto industry and supply chains and these types of things, number one, he's very knowledgeable. Number two, yeah, I think every once in a while he gets a little bit passionate about it and he gets passionate about what the impact is to, you know, the people of Ontario right now and also very passionate about getting to a solution that will be good for the people of Ontario moving forward. We had a great discussion. You know, will there be an automobile sector moving forward in Canada after this? I think there will be. Will it be different than what it is maybe today? Yeah, there'll be some changes to it. But, you know, let's see where the negotiators end up. I had a great, I really enjoyed my time with the Premier. There is no doubt where the Premier stands on issues. My Dutch background is I am Frisian. For the Dutch in Canada, they'll say, oh, man, you know, the Frisians, we are stief kuffs, which means we are strong willed. Others may use another word for describing strong will. But, you know, we're also known as being very blunt. So the Premier and I were, we had a great conversation. I think we both understood where, you know, I understood where the Premier and what he was advocating for. I think the Premier understood, you know, my position representing the President of the United States where we were. And so I expect to have a long and fruitful relationship with your Premier along with, you know, as I get to meet more of them, your other Premiers around the country. Thanks for the conversation. We'll end on a personal note for you. You told a story about bringing scapes to Ottawa. I lived in Ottawa for 20 years. One of the great things is getting up at six in the morning. Sounds crazy. You get up at six in the morning and hit the canal in the middle of winter on a clean sheet of ice. They've just had the Zamboni go across it. You're looking forward to doing that yourself, I understand. I am. I skated and played hockey when I, you know, went back when I was in high school and those types of things. I didn't play on a high school team and I would not want to get on the ice and play hockey with a bunch of Canadians. They'd level me very, very quickly, maybe for a bunch of reasons. Maybe because it would be good hockey or maybe because I was the American ambassador. When I was in the Netherlands, I did buy the long skates. I envisioned the canals freezing and me going back up to Friesland and being on the canals and skating on the ice. Cows on the right and on the left, although I guess in the winter they would be indoors, but skating by the windmills and just skating through some of the little towns and just having an awesome experience. The canals never froze. All right, so I wasn't able to do that, but I did have the opportunity to skate in some arenas and those types of things. But, you know, I really look forward to going on the canal here in Ottawa, maybe not at six o'clock in the morning, but we'll figure that out and putting on those long skates and just skating down the canal because, you know, and I hear it's eight, nine kilometers long, which is great because it means that once I get started, I only have to figure out how to stop once, which I don't know how to do. So at the end of the canal, I hope there's kind of like a, you know, a safety barrier that lets me stop safely and the same thing when I turn around and come back. But I really look forward to having an opportunity to do that. You know, Ottawa has skating, they have tulips, they have biking. My roots are in the Netherlands, but also in Holland, Michigan. The thing we really don't have much of in Holland, Michigan, we have the biking, we have the tulips, but not much of the skating. So I think I'm going to love Ottawa. I think I'm going to love Canada. And I think, you know, we're going to talk again and the next time or maybe in six months or nine months, we're going to talk about, wow, who would have thought we would be where we are at today after the conversation we had six or nine months ago. Ambassador, it's been a pleasure. Looking forward to future conversations as well. Thanks so much. Hey, great. Thank you. Full Comment is a post-media podcast. My name is Brian Lilly, your host. This episode was produced by Andre Proulx. Theme music by Bryce Hall. Kevin Libin is the executive producer. Make sure that you're hitting subscribe, whether you get your podcast on Apple, Spotify, what have you. Look for where you can hit subscribe. Hit the like button. Share this episode on social media and tell your friends about us. Thanks for listening. Thanks for watching. Until next time, I'm Brian Lilly.