How the U.S.-Canada trade dispute is impacting the economy on both sides of the border

Amna Nawaz:

So, your city, Sault, Ontario, as it's called, is separated by just a bridge from Sault, Michigan. It's the ninth busiest border crossing between the U.S. and Canada.

For anyone who hasn't been there, before all of these tariffs went into place, just how closely have your two communities been tied?

Matthew Shoemaker:

Yes, well, I mean, for generations, the twin Saults have been a place where it really is, we call it one nation -- one city across two nations.

And it is a place where shopping on either side of the border is common, whether you're American or Canadian, doing recreational activities on the Canadian side of the border is common. So it really is an extension of our own community and something that is part of the way of life here in the Twin Saults.

Amna Nawaz:

So not unusual to find Red Wings or Lions fans in Sault, Ontario, either?

Matthew Shoemaker:

Not at all. Lots of Tigers fans this time of year. The Tigers and the Jays are in a hard battle for playoff spots, but I know that there's lots of people in the Sault cheering for the Tigers.

Amna Nawaz:

So we should also note your city, Sault, Ontario, is a steel town. What kind of impact have the steel tariff that President Trump put in place had on your community?

Matthew Shoemaker:

Yes, they have had a really significant impact. And our community has, to some extent, been here before. During the first Trump presidency, there were the 25 percent steel tariffs that affected Algoma Steel.

At the time, they said they were losing a million dollars a day as a result of 25 percent tariffs. And then, throughout this term, the tariffs, the tariff rate was at 25 percent from the beginning of the Trump presidency essentially to last summer, when it increased to 50 percent.

And it looked like there was going to be some relief over the past several weeks as the negotiations were ongoing on reducing sectoral tariffs broadly, but, of course, those negotiations fell apart, and we continue to feel real economic impact in terms of job losses, in terms of losses at Algoma Steel itself from the 50 percent steel tariffs, which is the main driver in our local economy.

Amna Nawaz:

And because your two communities are so closely aligned, if your community is hurting economically, what does that mean for Sault, Michigan, across the border?

Matthew Shoemaker:

Yes, we have got the unique distinction of being one of the very few Canadian cities that is larger than its American counterpart.

Typically, you have got Windsor and Detroit, where Detroit's larger, you have got Niagara Falls and Buffalo, where Buffalo's larger. Here in the Sault, we're both -- in Twin Saults, the Canadian side is about five times larger than the American city.

So the retail, the restaurants, the coffee shops on the American side rely on Canadians going across and spending the dollars that they earn or derive from the steel plant. So it really does have a significant economic impact in Sault, Michigan, when Sault, Ontario, is not doing well.

And, right now, Sault, Ontario, is hurting as a result of decisions being made in Washington.

Amna Nawaz:

So did your constituents want to see these retaliatory tariffs go into place? I mean, what's the mood on the ground when it comes to pushing back against U.S. policy right now?

Matthew Shoemaker:

Yes, I think there's a real desire to see a pushback on the American policy for quite some time. The steel plant has been under the -- facing the impacts, I would say, of the 50 percent steel tariffs.

And we have tried to negotiate our way out of those. We have tried to create Canadian supply chains and Canadian markets for Canadian steel, but the reality is, without retaliatory tariffs, it felt like it was a fight we were fighting with a one arm tied behind our backs.

So when those negotiations did fall apart, I think one of the only real options left was retaliatory tariffs. It is the type of thing that, to protect a domestic steel economy, if we want to have steel plants in the future, we're going to have to invest in and protect our Canadian steelmaking.

Otherwise, we will lose the capacity to do it whatsoever.

Amna Nawaz:

We have seen some really fiery rhetoric from the premier of Ontario, Doug Ford. I mean, you don't quite hit that level of fiery rhetoric here, but does he capture sort of the anger on your side of the border right now?

Matthew Shoemaker:

Absolutely.

I think that the insults that we have had coming towards our prime minister and towards our premier have been unwarranted. They have been unwelcome. And people are -- have had it with those types of insults, and I think that's the mood that you saw our premier express and the frustration that was flowing from him resulted in that type of that type of language back.

And it's unfortunate because we're coming up, on several days from now, the anniversary of September 11, when Canadians opened their airports, their homes to Americans who had to land in Canadian airspace or land in Canadian airports at the time. We fought alongside the American military in Afghanistan as a result of that -- those terrorism attacks.

And you have seen residents answering with their wallets. Bridge traffic is down 30 percent from its standard numbers. The number of people canceling vacations, at least what we hear anecdotally, locally is significant. Nobody is going across the Sault, Michigan, to golf anymore in the summer.

And so there is a real economic impact that people are voting with their wallets, so to speak, on how they feel about these tariffs.

Amna Nawaz:

All right, that is Matthew Shoemaker. He's mayor of Sault Ste. Marie, Ontario, in Canada.

Mr. Mayor, thank you so much for your time.

Matthew Shoemaker:

Thanks for having me.