"Escalating trade wars" - Shark Tank’s Kevin O’Leary reacts to new tariffs on Canada and Mexico

Kevin O'Leary, the Canadian businessman and Shark Tank investor, recently shared a segment of his interview with Fox Business. He discussed the implications of US tariffs on Canadian aluminum and steel and how it would affect the trade relations between the two countries.

He highlighted that any changes in tariff rates should be of concern, but this time, the situation between the US and Canada presents a unique economic and political challenge.

During the interview, the issue was framed by him in two different contexts. The first one was a broader global effort by the US to correct trade imbalances. The second perspective is seen as specific to US-Canada trade relations.

Shark Tank's Kevin noted that Donald Trump has been actively re-evaluating the trade relations with multiple countries, such as India. The latter imposes tariffs exceeding 20% on certain imports, and thus, as a response, the United States also has reciprocal tariffs to have a level playing field.

Talking about the same, he said,

"Obviously, all tariffs you should be concerned about because it's escalating trade wars. But let's talk about tariffs in two verticals. Number one, what Trump is doing, is looking all around the world including Canada, and saying well it's an imbalance in tariffs, particularly with India.

He added,

For example, they have some tariffs north of 20% on certain sectors and he's gonna balance that out. If India's gonna tax the US at 24%, reciprocal on the same goods and services in the US. That's just making a level playing field."

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Shark Tank investor discusses impact on the Aluminium trade industry after new US tariffs

Shark Tank's Kevin O'Leary argued that the trade situation with Canada is different as compared to other global trade disputes like India. He said that these tariffs on Canadian aluminum can be described as a part of a renegotiation process of the US-Mexico-Canada Agreement that had replaced NAFTA in 2020.

He said that Canada has a competitive advantage in aluminum production due to its energy resources. This could be viewed as an attempt by the United States to exert leverage in future trade discussions. He said,

"The Canadian thing is different. I think what's going on there, is a renegotiation of NAFTA if you wanna call it that because let's just take Aluminum. The reason Aluminum 70% the imports into the US comes from Canada is Canada has the cheapest power in North America.

Continuing, Kevin said,

You need a lot of electricity to make aluminum. Most of us know that buikd data centers in the US that there's no power left on the grid. Canadians have it in NAT Gas, they have it in hydro. So, that's really a discussion about an integration of the economies that's beginning."

Shark Tank investor Kevin O'Leary then pointed out the political situation of Canada at the time. The government is in a transitional phase with the elections happening after 6 weeks. He described this as a "limbo zone" for Canada, where there is no strong leadership to engage in meaningful trade negotiations. He expressed,

"Unfortunately, for Canada, we're in a limbo zome there, because the government has fallen and there's no elections for the next six weeks. So, we don't have anybody to negotiate with right now. Trudeau, as you know, has fallen out of favour, doesn't have a mandate with the Canadian people... But the economic union is the prize."

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Shark Tank season 16 releases new episodes weekly on ABC at 8 PM Eastern Time on Fridays. Later, they can be streamed online through HULU.