Professor Scott Galloway doesn’t hold back on Trump’s tariffs with Canada: “It’s just economically stupid”

President Donald Trump declared a trade war with the world in April when he announced his “Liberation Day” policy of “reciprocal” tariffs. The stated impetus behind them was to balance trade imbalances and stop other countries from “cheating.”

Trump also claimed that the tariffs would bring nations to the table to negotiate better trade deals, return manufacturing jobs to the United States, and rake in trillions of dollars. While he has managed to secure some trade deals, the overall effect of his tariff policy has not produced the desired effects despite his claims to the contrary.

Scott Galloway, a professor of marketing at NYU Stern School of Business and entrepreneur, didn’t mince words recently on the show Piers Morgan Uncensored about Trump’s tariff policy, which he said, “seems to be based on the blood sugar level of the president and his chief economist.”

The host of the Prof G podcast went into detail of why the tariffs imposed on Canada are “just economically stupid.” He said that the US is basically giving its “amazing ally” the middle finger.

The US cannot be trusted anymore as a reliable trading partner

Canada is the US’ second largest trading partner after Mexico. Seventy percent of its exports are sent to the United States.

“They have based a big portion of their economy on good relationships with the US,” Galloway said. “It’s the largest undefended border in the world.”

However, Trump used the International Emergency Economic Powers Act to impose a 35% tariff on many of them. “It’s like that Animal House line ‘You F’d up! You trusted us,’” he reflected.

Galloway pointed out that Trump in a way got what he wanted. “Effectively these tariffs were supposed to inspire a flurry of deal making. And they are. Unfortunately, the deal making is outside of the US,” he observed.

Canada’s Prime Minister, Mark Carney, is on tour around Asia. “Japan, South Korea and China are having trade talks for the first time in a long while,” he pointed out.

“I would argue that the sclerotic, irrational tariffs have thrust a lot of nations who traditionally weren’t friends with China, have thrust them into their hands,” the professor added. “People are reconfiguring their supply chains to avoid the US who they feel they can’t count on.”

Trade with Canda asymmetrically benefits the US

Galloway agreed with Kevin O’Leary that there should be free trade between Canada and the US saying, “we Americans asymmetrically benefit.”

He explained that products coming into the US from Canada like lumber, petroleum, oil have low operating margins, between 10 to 20 percent. However, the US exports products to Canada like iPhones, cars, electronics with high operating margins of 30 to 40 percent.

“In other words, for every dollar we make from products we ship into Canada, we get about three dollars in shareholder value. They get about one,” Galloway said.

“So, if there is any asymmetry in free trade that accretes to one partner, it asymmetrically benefits the US,” he added. “So not only is this waving our middle finger in an amazing ally, it’s just economically stupid what we have done.”

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