SCOTT SIMON, HOST:
Lake Ontario is now Lake America, according to an executive order President Trump signed this week. It is the latest in the fraying relationship between the U.S. and Canada after back-and-forth tariff announcements, insults and at least one expletive-laden press conference. The U.S. is also trying to use trade policy to put pressure on Iran while managing a tenuous trade truce with China.
Wendy Cutler, who spent nearly three decades as a diplomat and negotiator in the office of the U.S. Trade Representative joins us. She's currently senior vice president at the Asia Society Political Institute. Thanks so much for being with us.
WENDY CUTLER: Well, thank you.
SIMON: Let's begin with Canada. Do you see a way to mend this relationship after such a public breakup?
CUTLER: I do. I mean, trade negotiations do break down at times, and that's what happened this time around. What's different this time, though, is there's just growing tensions between the United States and Canada, and words are being exchanged at very senior levels that don't help getting both sides back to the table. But both trade ministers in the past 48 hours have kind of toned down their rhetoric, and so I'm optimistic, with time, that we can get back to the table with Canada.
SIMON: Well, Canada's Prime Minister Carney talked about what he called middle powers banding together without the U.S. Is that strategy workable?
CUTLER: Well, over the medium and longer term, it will help Canada reduce its dependency on the United States and help it develop economic and commercial relations with other countries. That said, Canada's very dependent on the American economy. Our economies are very integrated, and our companies trade back and forth across the border on a daily basis.
SIMON: President Trump's economic D-Day for Iran came and went this week. But I want to ask you - because the administration seems hesitant to put pressure on China, who, of course, is by far the biggest buyer of Iranian oil - why is that?
CUTLER: Well, because our president has, in his view, has a special relationship with Xi Jinping. Xi is scheduled to visit the United States on September 24, and the president very much wants that meeting to take place and very much wants stabilized relations between Washington and Beijing to continue. But this does go right up against the objective to try and get Iran in a place where we can deal with them. And when it comes to economic ties, Iran exports a lot of its oil to China. And so if we're serious about acting big on Iran, then we will need to take strong measures against China. And the president, as you said, is just reluctant to do that. So I suspect Secretary Bessent will try and find some middle ground here.
SIMON: How do you feel about the fact that tariffs have become weaponized in recent months?
CUTLER: Look, it's not good for the U.S. economy. It's not good for the global economy. Tariffs are paid not only by final consumers, but also by our businesses. And at a time when we're trying to attract more manufacturing investment to the United States, we're acting against our interests by imposing high tariffs on inputs for production. And these tariffs are hurting not only our consumers at the Walmarts and at the supermarkets, but, again, are hurting businesses as they're trying to manufacture finished products here.
SIMON: But from the administration's point of view, isn't this a lever of economic advantage that the United States can apply to get more favorable conditions for U.S. consumers?
CUTLER: Absolutely. And if used selectively and strategically, tariffs do have a role. But I would argue that our president has just sided with tariffs and imposed so many tariffs that it's not only hurting our trading partners but hurting American interest, as well. And two-thirds of the American public, in recent polls, have indicated that they're fed up with these tariffs and would like them to be lifted.
SIMON: Do you foresee any more tariffs coming from the Trump administration in line with some of the policies they've enunciated?
CUTLER: Yes. We are expecting tariffs to come out as a result of new investigations that are underway now, including on excess capacity, including on a number of products under Section 232, dealing with national security, on wind turbines and medical equipment. So I think as long as Trump is in office, we are going to continue to see more and more tariffs.
SIMON: Aren't tariffs a legitimate way, though, of asserting American interests, particularly when it comes to some of the high-tech products that are reaching market?
CUTLER: Absolutely. And, again, if we can use tariffs in a strategic and selective way and impose high tariffs on those products that are of strategic and interest to the United States but also sensitive to the U.S. economy and leave all the other products with very low tariffs, that's one way that we could move forward without, again, hurting our own interest and shooting ourselves in the foot here.
SIMON: Wendy Cutler, senior vice president at the Asia Society Policy Institute. Thank you so much for being with us.
CUTLER: Well, thank you. My pleasure.
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