Canadians are voting in an election dominated by the global trade war
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Hello and welcome to World Business Report from the BBC World Service. Namaste. I'm Divina Gupta joining you from Delhi. And on this edition, worrying signs for the world's largest economy with a sharp drop in shipments at America's largest port of Los Angeles, fueling fears of a global economic slowdown.

and across the Atlantic, chaos in Spain and Portugal, where a massive power outage earlier today disrupted businesses, transport and daily life, causing widespread economic damage. There is no power, no electricity, no water, no internet, no way to charge our phones. Hopefully this will be solved soon.

We'll be hearing more on that. But first, let's cross continents and go to Canada. Because as we speak, millions of people are heading to the polls to choose their next government. And the stakes couldn't be higher. With growing pressure from the U.S. over tariffs and uncertainty over trade ties with its biggest partner, today's elections isn't just about politics.

It's about the future of Canada's economy and the impact could be felt well beyond its borders to its neighbor, the United States. Faisal Islam is joining us, our economics editor from Ottawa. Faisal, tell us about the scene where you are and also about the major candidates in this election.

Yes, evening, Davina. I'm in Ottawa. I just have a lovely view at about evening approaches of the Parliament and the Senate building from this beautiful town. And actually...

in about an hour or so, hour and a half, polls will start to close. This is a huge cross-continental country going from the Atlantic to the Pacific. And so the first polls will close in about an hour and a half, giving us perhaps the first indication in terms of real votes. The two principal candidates...

to be Prime Minister after this election is the current Prime Minister, although he's been in his place rather briefly since January, and that's Mark Carney, a former central banker both here in Canada and perhaps unusually in the UK as Governor of the Bank of England. And he is for the Liberal Party, the centre-left organisation, and he took over from the long-standing Justin Trudeau

and the opposition, the Conservatives, Pierre Poliev. And here's the really interesting thing, Davina. Up until really three months ago, Pierre Poliev was a shoo-in. 20, 30 points ahead. They were measuring the curtains here in Ottawa, and that incredibly, that poll lead, has disappeared. And it's disappeared for one big reason, and you can probably guess.

Well, Donald Trump, let me just say that, and his policies and the tariffs. We've been talking about that on the show. But as the voting continues, U.S. president has weighed in on the election via his social media account, repeating his calls for the nation to become the 51st U.S. state and have zero tariffs. So does this all come down to who can handle Trump better than him?

Well, it is, it should be said, an astonishing intervention from Donald Trump, even by his own lofty standards, for him to send out a truth social post like that so clearly and abundantly interfering into the elections of his neighbours is extraordinary. And both main leaders, as you said a moment ago, have rejected that intervention.

interference. But his presence on the border, and the important thing here, Davina, is it's not just about the tariff trade war. That is one thing. It is also the threats to Canada's sovereignty, this sort of half-joke, half-serious notion that Canada should become the 51st state. That is what Mark Carney has seized upon using his economic expertise to

to say two things. Firstly, I can handle a crisis. But secondly, I know how to fight an economic war. He's a veteran of Brexit, the Eurozone crisis, the great financial crisis. So I have been travelling with him in his plane over the past 36 hours.

And it's abundantly clear, even at a time of sensitivity where he pulled back on the attacks on Pierre Poliev because of a very tragic event in Vancouver, he continued with the attacks on Donald Trump. And he's happy for it to be almost a referendum on Donald Trump. And that is one of the reasons why the polls have turned around. Now, polls can be right. They can be wrong. We're going to find out fairly soon.

But it is. And this is why you're absolutely right doing an introduction. So this is so much more important than just about Canada. If you think about Canada in the G7, you know, it's almost like if Mark Carney gets a significant majority. But Pierre Poliev has also been forced into that same position. Then they will be the sort of anti-Trump within North America, a significant kind of candidate.

confusion to the world remaking that Donald Trump has been seeking. So big stakes here, not just for this beautiful country, but also for, I think, the sort of balance of the rest of the world.

Absolutely. Faisal, we'll let you go and we'll connect with you in a short while. From now, Faisal Islam, our economics editor, joining us from Ottawa there. But as he was mentioning about the so-called trade war or the words he uses, economic war between Canada and Israel.

the US, we've been keeping a track of the tariff announcements that have happened since the time the US President Donald Trump has taken charge. And we're doing our best, believe me, to keep you informed, but there's so many changes. So let's look at this. When Donald Trump took office, he quickly imposed a 25% tariff on Canadian imports, while he backed off from his initial threat to

to put tariffs on all Canadian goods, he kept the 25% tariff on items like automobiles, aluminum and steel. And in retaliation, Canada slapped its own tariffs on U.S. goods, billions of dollars, including a 25% levy on U.S.-made cars. Now, here's the catch. Over

Over 70% of Canadian exports are going to the U.S. So Canada is more dependent on the U.S. as a market. And businesses in Canada are watching for this election. They're already feeling the pain.

Earlier, I spoke with Dan Kelly, president of the Canadian Federation of Independent Businesses, and I asked him what the priorities should be for the next government. Priority number one is pretty clear and seems to be consistent among all parties, and that is figuring out a strategy to deal with the ups and downs of the U.S. terror fight.

This has been the omnipresent issue during this election campaign and is the reason why the results look like they might be very, very different than was the case at the start of the campaign. The Trump factor has been absolutely huge in the Canadian election. And whomever's in power as of tomorrow is going to have to deal with very much first trying to keep Canada outside of the U.S. tariff wall.

Certainly tariffs on Trump, two words that have been talking points in the Canadian election. But just briefly tell us what's been the impact?

of these tariffs from the U.S. in Canada, which is the industry which is worst hit as of now? Yeah, the tariffs have been, you know, I think there have been 20 tariff changes since Trump first took office. And so at any given moment, it is hard to know which tariffs are in place and which ones are not, as so many levers have been pulled and pushed.

Right now, there is a significant tariff on steel and aluminum, not just, of course, in Canada, but around the world. And then for our auto manufacturers, there is a specific tariff on much, not all, but much of Canadian auto production.

There are other pieces left to come. We do have a general tariff on place, but for most businesses, they are able to use the free trade agreement that we have with the U.S. to stay clear of tariffs at this very moment.

But we're all watching for the latest tweet from the president to determine the economic future of the country, which is a ridiculous position to be in. It's certainly extremely uncertain right now. What kind of conversations are happening, especially between small and medium-sized businesses? Because they are the ones who are the most vulnerable at this point. Yeah, look, it is not just the impact of U.S. tariffs for Canadian exports.

But our retaliatory tariffs, both are taking a pretty big bite out of many small businesses right now. Canada's retaliatory tariffs affect actually more small and medium-sized companies than U.S. export tariffs do. And that's because there are more small businesses that import products from the United States than export products to the United States.

Both sides, though, are having an impact on Canadian businesses. Right now, the impact is largely the uncertainty. You know, the worst case scenario for Canadian business is a giant across the board tariff. The second worst case scenario is ongoing uncertainty over tariffs. And we have a bit of both in Canada right now.

Some businesses, though, have been moving with their, you know, making decisions in real time. They are starting to shift and find either customers or suppliers within Canada from other Canadian provinces.

obviously a good thing for the country as a whole, or they are looking at other international agreements. Canada has many free trade agreements with Europe and many Pacific Rim countries, and more businesses are starting to utilize those agreements to try to address the uncertainty and challenges created by the U.S. at the moment.

It seems like these businesses would require a lot more government support as well once these elections are over. Are you hoping for subsidies or tax relief from the new government to offset the impact of this kind of uncertainty on businesses?

Yeah, look, there's a few things that are absolutely necessary right now. And that is to make sure that the revenue that is generated by Canada's retaliatory tariffs is given back to the businesses and individuals that are most deeply affected by the tariffs themselves.

And that hasn't really happened. There has been some support for the auto sector, but not across the board tariffs. And one assumes that if this does take hold and tariffs are here for the foreseeable future, that that money will need to be distributed to businesses that are going to be deeply affected by the tariffs themselves. So a lot more pressure on the economy then?

Oh, there's no question there's pressure on the economy. What this has done, though, is it has cleaned up some of the stupid decisions the government was making, even in advance of the tariffs themselves. So since the threat of tariffs has been in place, Canada canceled an increase in capital gains taxes. It canceled the carbon tax in Canada that consumers and small businesses were paying.

And so we have already started to see some significant tax relief as a result of a response to U.S. tariffs. That's Dan Kelly, president of the Canadian Federation of Independent Businesses. Now, let's hear from somebody across the country.

Across the border, this is Peter Jankowskis, who's Vice President Research and Analysis at Arbor Financial Services, joining me from the U.S. in the Chicago area. Peter, how much of these Canadian elections are being watched by investors? Because the kind of economic decisions that Dan was talking about, something like tax

relief to the industries over there. Does it really move the needle for U.S. investors about their decisions about the Canadian economy?

Well, I think it does present some positives coming out of this. Hard to imagine, but yes, there are some positives in terms of improving their internal policies. And certainly it is a story that is seeing a fair amount of interest here. There were numerous articles in the Wall Street Journal today about the election, about

And very interesting that the Trump factor has really reversed the standings of the two parties. You know, a few months ago, it looked like the conservatives were a shoe in for victory. And now it looks like a very tight race and probably leaning more toward the liberals. Peter, stay with us because we want to talk a lot more about the U.S. economy with you. You're with World Business Report from the BBC World Service.

Hi, I'm Lindsey Graham, host of Wondery's Business Movers. In our latest series, media mogul Ted Turner launches a 24-hour channel dedicated solely to breaking news. But CNN doesn't just shake up the television industry. It transforms journalism, politics, and culture in America forever. Listen to Business Movers, making the news on Amazon Music or wherever you get your podcasts.

Now, we're going to take a step outside the U.S. and going to take stock of the major power outage in Spain and Portugal, which happened earlier today. A nationwide electricity blackout that triggered widespread disruption, bringing transport, public transport to a standstill, shutting down businesses, leaving millions without power for hours.

In Spain, the government had to declare a national emergency. Here is Spanish Prime Minister Pedro Sanchez, who met his National Security Council and he addressed the nation a few hours ago, saying the cause of the outage was still being investigated.

We still don't have conclusive information on the reasons for this outage. So I ask the public, as we have done in past crises, to get their information from official channels. It's better not to speculate. We will know the causes later. We're not ruling out any hypothesis. But now we must focus on the most important thing, which is restoring electricity to our homes.

We've been trying to get more reaction from the country. Of course, it's difficult with power cuts and access to communication devices has been a problem. But here's one resident in southern Spain who spoke to us a few hours ago. Hi, I'm Juliana.

I'm living in Malaga and right now there is no power, no electricity, no water, I have no internet, no way to charge our phones, laptops, iPads. I've been out in the streets and people are just wandering around, the shops and restaurants are closed. There's only a few that are open and of course you can only pay things with cash. It's a bit chaotic and hopefully this will be solved soon.

From then to now, we're getting reports that electricity is restored in some areas. Spain's Prime Minister Pedro Sanchez says that Spanish grid operator has restored power in 50% of the country. Reuters is also reporting that power is back in parts of Lisbon and Portugal. And in Spain, 11 trains are still stranded with passengers on board. There have been also many cancellation of flights.

to the countries. But let's get in Leanne Hunt, who's an expert in disaster and emergency management at Coventry University to figure out what exactly could have happened. Because Leanne, obviously, at this point, we don't have official answers. And this is one of the worst blackouts in Europe's history already, which is being investigated. Where should they start looking?

I mean, this is, as the Prime Minister has said, you know, we're trying to avoid speculation. I think the, you know, the important thing is, is that we consider how we prepare for these kind of events and how we deal with them. You know, certainly, you know,

You know, in the kind of environment, you know, world environment that we're in at the moment and with things like climate change and the risks that we might see from climate change increasing, cyber attacks, etc. You know, these power outages, whatever the reason is, there is a chance they're going to be more frequent.

and perhaps you know last for these sort of more prolonged periods of time um so i think it's about how we prepare for them on a national level but also how we support you know our communities on a local level how they can prepare for these kind of things you know like the lady in your clip just now was saying um you know people having to use cash you know certainly you

here in the UK, you know, now a lot of places, they would rather you use your card than using cash. You know, I myself, I very rarely have cash in my purse. So, you know, just kind of being mindful of, you know, it's great we're moving along in this very technological world that we're in now. But then when something like this happens, it can really upskittle us and make things very problematic just for day to day life. Absolutely.

I was looking at pictures on bbc.com slash news in which I can see that there are images of people collecting gas bottles to use an alternative to electricity during the outage. And I'm joining you from India in the capital city, Delhi. It's quite common to have energy shortage and power outage, especially during summers here. And we always have these alternatives like having a genset.

or having a battery-powered backup for electricity. Does this incident also expose vulnerability of European cities in responding to crises such as this? Yeah, I think what it does is it shows vulnerabilities at all different scales. So very much at a national level, you know, and globally,

If you take different countries across the world, that level of vulnerability will look different. So will the level of risk in terms of this happening, because, you know, some countries will be more prepared. They'll have different types of energy source. They'll have more robust infrastructure or not, you know, depending on where you are.

So again, it kind of comes back to that preparedness and recognising where our vulnerabilities are. And again, you know, helping people on that very local level or on that business level be prepared. It's something I know from a UK perspective that I know has been looked at over the last couple of years.

you know, what it would mean for us if we had something like this. And I've actually been with some emergency planning colleagues at an event today and I imagine that they'll have picked this up on the news on the way home and this will be very prominent in the minds of some of those people. Where should they

Where should the priorities lie? Because there are some things, as you mentioned, where cash is not usually used by people and it's all dependent on electronic systems and then supermarkets cannot do transactions. ATMs and banks are dependent on power and electricity so much, but so are hospitals and some of those key infrastructure like traffic lights stopped working in Spain and there were massive traffic jams. So that

That does create a list of things that need to be prioritized. What should be prioritized according to you?

I think for me personally, you've mentioned it there, you know, hospitals, healthcare, I think, and all of those jobs, all of those roles that, you know, include sort of protecting, you know, public safety. So, you know, being able to answer your 999 calls and respond to them or your emergency calls. So, you know, hospitals, a lot of hospitals, you know,

And, you know, particularly over here in Europe, in the UK, a lot of hospitals will have things like, you know, backup generators, but those generators will only last so long. And then you're considering, well, when was that generator last used? When was it last tested? When was it last used?

You know, filled with fuel and all these kind of things. So I think hospitals, our emergency services, those kind of things have got to be a priority. But then what we also need to remember is that actually we could have people out in our community that are vulnerable, that maybe rely on electricity for, you know, home kidney dialysis, for example, or something like that.

So working with utility companies to make sure that they understand where vulnerable people in the community are and what those needs are. And I think that's for me, that's where I would start with this.

Liana Hunt, thank you so much for joining us. Expert in disaster and emergency management at Coventry University there. You can follow more on bbc.com slash news. We have a live page with all the updates over there. Let's go back to now, Peter, because Peter, we want to talk about US markets another week and looking at tech earnings this week. What

What are investors most anxious or excited about with the big tech giants like Microsoft, Apple, Meta and Amazon who are due to have their reports later this week?

Well, I think they're going to be looking toward the future guidance to see what the companies are saying with regard to tariff policy, government policy in general. You know, these tariffs are fairly new, so they will not have had much impact at all on the earnings that took place during the most recent quarter. But it's all going to be about what the companies are talking about the future holds as they're anticipating the impacts on their business, the impact on their costs.

But if big tech earnings disappoint, could that trigger sort of a broader pullback in investor confidence about the strength of the U.S. economy?

I think it well could. It certainly has been a major cause of the drawdown that we've seen in the U.S. markets so far. But we've seen pockets of strength as well. Many of the more stable companies that were left out of the huge rally last year have actually held up and had positive returns, even as the tech stocks have lagged.

crucial week for the Wall Street. But as we've been talking a lot about President Trump on this program and his policies, the big question remains, are these policies actually working?

Well, fresh data suggests it's been a slow week at America's ports. Now, what does this mean? Take the port of Los Angeles, which is one of the biggest in the country. New numbers show that ship arrivals are down by 11% compared to this time last year.

And it gets worse because container bookings have dropped by 45% by mid-April compared with a year ago. And that's according to data reported by the Financial Times, all hinting at a slowdown of the economy today.

Gene Sirocca is the executive director of the Port of Los Angeles. He's been speaking to my colleague Rahul Tandon. What we're seeing is regular cargo traffic, a cruise ship in port, some liquid bulk and some dry bulk ships in. But what I do see is a drop of 35 percent of our containerized cargo in two weeks with arrivals scheduled to be down.

four weeks after that as well. When you're seeing that drop, is that ships coming in and out of China in particular? Yes. What I've heard directly is that many major U.S. importers have stopped all freight coming from China. The 145 percent tariffs basically mean that products made in China are two and a half times more expensive than they were last month.

So we'll see a precipitous drop in cargo from China over the weeks to come. What are your expectations that if the tariffs are not reduced, are you expecting a 5% drop, a 10% drop later this year? Could it be more than that? It could be more. Right off the bat, what we're seeing is that businesses have hit the pause button.

With information coming out of Washington seemingly in rapid pace, no one is sure if we can solve this in two hours, two days, two weeks, or even two months. We're also seeing a slowing in economic growth and investment. Many folks are telling me directly that prices here will increase, putting pressure on inflation.

And with our short term look at cargo coming toward the port of Los Angeles, less cargo will mean fewer jobs in and around the port. It seems that Gene Sirocco, executive director of the port of Los Angeles, was doing crystal ball gazing, Peter, because Chinese e-commerce platform Temu is now saying that consumers in the U.S. will have to pay more and double in some items because of these tariffs.

Yes, that's certainly a possibility. It'll be interesting to see what that does for Timo's growth strategy as they've been selling at very low prices trying to increase their market share. So it just may cause them to shrink on their own rather than force the costs onto the U.S. consumer. A difficult one there. Peter Jankowskis, thank you so much for joining us. Always a pleasure speaking with you. You've been listening to World Business Report with me, Divina.

Hi, I'm Lindsey Graham, host of Wondery's Business Movers. In our latest series, media mogul Ted Turner launches a 24-hour channel dedicated solely to breaking news. But CNN doesn't just shake up the television industry. It transforms journalism, politics, and culture in America forever. Listen to Business Movers, making the news on Amazon Music or wherever you get your podcasts.