Trade war dispatch from Canada

0:00This message comes from NPR sponsor Charles Schwab. Financial decisions can be tricky. Your biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Download the latest episode and subscribe at schwab.com slash financial decoder. Heads up, in this episode, we are not able to consistently pronounce the word pecan. Sometimes it's pecan. Sometimes it's pecan. Okay, you've been warned. This is Planet Money from NPR. So I guess, would you mind introducing yourself? My name is Alex, Alex Rodrigues, and I have a small business here in Vancouver, Canada called Nut Hut.

0:43How do you not giggle when you say Nut Hut? Oh, I don't. I had years of thinking, I should change the name. This is ridiculous. We have a physical location, and this is probably TMI, but we have a physical location with the big word Nut Hut. And there are instances of guys showing up in front of our building and posing in front of the sign and taking selfies.

1:08Anyhow, Alex has been running her small business in Vancouver for almost a decade. Nuthut is like a specialty shop. Alex sells just nuts, seeds, chocolate and dried fruit, mostly from small, sustainably run farms. And finding those farmers is one of the main things she focuses on. And that is not easy. Not everyone is reliable. She still hasn't found a pine nut that she really likes. So she doesn't sell pine nuts. So when she starts working with somebody good, she is very loyal. And back in 2020, she makes an amazing find. She's looking on Etsy, trying to find a gift for her kid. And for whatever reason, probably because she runs a nut business, she comes across the page selling what are known as native pecans.

1:53And she's curious about them. So she reaches out to the seller and learns that these pecans are from a really special place. The land that her pecans are growing on, like it's land that is designated that it can only ever be growing these pecans. These native pecans grow near where Kansas meets Oklahoma meets Missouri meets Arkansas. And they're sold by a woman in Arkansas named Shirley Rollo. She says that land is a great place to grow these nuts. The river there is called the Neosho River. And the ground is just fertile and it's just a perfect place for pecans to grow. Shirley says the pecans grow by the river on these enormous trees.

2:36Some of the trees are over 150 years old. The nuts are essentially wild. That's why they taste so good, because they're native pecans. And they have a much better taste and flavor. and the oil content is better in them. You cannot find these nuts in most grocery stores. Shirley says grocery store pecans are likely coming from Georgia. You know, I don't do Georgia pecans. I never have because I grew up on natives. Sorry, Georgia. Please don't come at us. Shirley and I talked for hours about the history of pecans, the business of pecans, how to best get the pecan out of the shell. Shirley, is there anything else I should know about pecans?

3:18We don't have a lot. So Shirley, the pecan supplier in Arkansas, ships Alex at Nuthut in Vancouver a little box of these special native pecans to try. And Alex is really impressed. Shirley's right. They taste fantastic. So Alex starts importing Shirley's pecans into Canada. And they've been working together ever since. I know with Shirley, every single time we've bought from her, the quality is exceptional. And she has the paperwork done within like hours. So like just finding the people that you can count on. Alex's relationships with her suppliers and farmers are really important to her. Some of the farmers, they're the same people I've been working with from the beginning.

4:03And I've just kept building relationships with them, which is why the current situation right now of heading into tariffs, I find it really, like, it's concerning as one thing and potentially affecting my business, you know. These are all things that deeply concern me, but, like, I love our farmers. And now Alex and Shirley's years-long business relationship has become kind of a tale of a star-crossed love, with tariffs coming between them. Because, yes, the U.S. put tariffs on Canada, but then Canada put retaliatory tariffs on the U.S. So Alex in Canada, Shirley in the U.S., they are caught in the middle of a trade war.

4:44They've built up trust, which is a really valuable thing in business. But now it might become impossible for them to work together to import and export to each other. Right, because trade is this big global thing, but it is made up of individual farmers and business owners and truckers and manufacturers. And as the tariff chaos spreads, millions of people all over the world are going to have to re-evaluate relationships that they have been building for years. So what is a small business person to do? At this point? I don't know. Who knows? We don't know. Hello and welcome to Planet Money. I'm Amanda Aronchik.

5:27And I'm Sarah Gonzalez. First, President Trump announced tariffs. Then there were retaliatory tariffs and so-called reciprocal tariffs for countries around the world. But now those have been mostly paused. Just pause. This is still an escalating trade war. And Canada has had a little bit of a head start here. They started figuring out how to deal with the tariffs a couple months ago. Today on the show, we focus on one Canadian business. to hear all about the uncertainty and the difficult decisions that civilians have to make in a war they didn't ask for.

6:10This message comes from Vanguard. Capturing value in the bond market is not easy. That's why Vanguard offers a suite of over 80 institutional quality bond funds actively managed by a 200-person global team of sector specialists, analysts, and traders. They're designed for financial advisors looking to give their clients consistent results year in and year out. See the record at Vanguard.com slash audio. That's Vanguard.com slash audio. All investing is subject to risk. Vanguard Marketing Corporation Distributor. This message comes from NPR sponsor Odoo. Some describe Odoo like a magic beanstalk because it scales with you and is magically affordable.

6:53Odoo. Exactly what a business needs. Sign up at odoo.com. That's O-D-O-O dot com. If there was no global trade, Canadians would be eating a lot of salmon and maple syrup and lentils. But basically, no bananas, no avocados, and no pecans. Because pecans need warm weather and humidity. They can't easily grow outdoors in Canada. The only nuts that grow in Canada, in quantities large enough for us, say, are hazelnuts. Walnuts grow here, but not in large enough quantities for us. So that's it for Canada. And Alex Rodriguez, she owns the nut hut, right? Not the only walnuts and hazelnuts hut. She wants to offer more than just that.

7:40So she imports her nuts from all over the world. She gets her almonds from Australia, her cashews from Indonesia, macadamia nuts from Kenya. But importing from the U.S.? Obviously, that makes a lot of sense. It is right next door. So about 40 percent of what Alex sells actually comes from the U.S. She gets her pistachios and her walnuts from California. And of course, she gets her pecans from Shirley in Arkansas. So in January, hours after he was inaugurated, President Trump said that he would soon put tariffs on imports from Canada and Mexico. And Alex took notice right away. At first, it was a 25 percent tariff on all goods coming into the U.S.

8:20Then that was paused. Then it was started. Then there was an exemption for things covered by the trade deal USMCA, the U.S.-Mexico-Canada agreement. You know, the new NAFTA. By the way, in Canada, that agreement is called CUSMA. They put the Canada first. Amanda is Canadian. Thank you for that clarification. Canada goes first. It has been chaos. But luckily, whenever Alex has questions about importing stuff into Canada, she has an expert that she can turn to. I just asked Raymond. Uh-huh. Uh-huh. And Raymond is the guy who, like, boom, he's back with an answer in minutes. Raymond Mass is Alex's customs broker.

9:01He's got a company called Advanced Global Transportation Technologies. I'm the director here. And basically in a nutshell is we account for goods coming into the country for importers. Can't believe you said in a nutshell. Appreciate that. I have a few more puns noted down. That's amazing. It's very hard to do this story without a lot of puns and nut jokes, truthfully. I feel like we've been fairly restrained so far. Don't you? You're welcome. I can't believe it. So Ray's company is in Ontario. He deals with clients who are importing into Canada, mostly from the U.S. And when the guitars or bourbon or motorcycles or nuts get to the U.S.

9:43border on their way into Canada, I guess for a big party. Fun party. He helps to make sure that everything is properly accounted for. Yeah, so he calculates what the Canadian motorcycle importer has to pay. Ray sends the motorcycle importer a bill. The importer pays Ray and then Ray sends the money to the Canada Border Service Agency. That's how it works. And then where does that money go? So it goes into the black hole known as the government. Ray helps Alex navigate the tariffs as they unfold. So here's how it plays out. Once the tariffs are scheduled to kick in, Canada decided to fight back.

10:22Like you put tariffs on us, we're going to put tariffs on you. And that's usually how it goes. The tit for tat. Though recently, some countries have said that they are not going to retaliate against the U.S., like Australia. But Canada retaliates right away. On February 1st, they put out a list of U.S. products they might tariff. Ray pours over that list. He tries to figure out what this all means for his clients, for Alex. One thing he notices, there are some geopolitics at play. Canada's retaliatory tariffs seem to be targeted more at imports from red states than blue states. We asked the Department of Finance Canada whether that was what was going on, and Deputy Spokesperson Marie-France Fauci told us in a statement that there were a number of factors that they used when deciding which goods to tariff, including, quote, maximizing pressure on the U.S.

11:17administration. Now, Alex, she imports from both red states and blue states. She gets her pistachios and walnuts from blue California and her pecans from red Arkansas. Those are the three nuts she gets in the U.S. So she calls up Ray, her customs broker, and she says, are any of my nuts on that list? And he looks it up. So right now there is only one of them that have tariffs on it. And that is pecans. Oh, the pecans. Pistachios and walnuts were not on the list, but Canada did put retaliatory tariffs on U.S. pecans. And they were going to kick in at the beginning of March. So Ray had a piece of advice for Alex.

12:02If I was in Alex's place, I'd be rushing as much as I can. So Alex started doing just that, kind of panic purchasing from the U.S.? Yeah, I would call it panic purchasing or wise. It was wise. It was precautionary. Because the tariffs at that point were paused, but they were coming. So over the course of February, she tries to stockpile as many American nuts as she can. Each nut requires a slightly different plan. We talked to her while she was in the middle of all of this. Actually, my husband is right now at the bank. We're like dipping into our own personal funds to come up with enough money because I've purchased three extra pallets from my walnut farmer.

12:48Because even though right now there's no tariff on walnuts, I don't know how this is going to go. Yeah, like maybe walnuts would be hit with tariffs in April or May or never. Unclear. So first, walnuts. She could source them from somewhere else, maybe Eastern Europe. But of course, she already knows and trusts her walnut farmer. So she buys a bunch of walnuts from her regular farmer, gets them shipped over the border, and puts them in cold storage. I defer to what our farmers say. And our farmers say, nuts like to be cold. All nuts like to be cold. All nuts like to be cold. So I should be keeping nuts in the fridge.

13:24Yeah. I didn't know that. You should. News you can use. Alex says if you take one thing away from the story, it should be this. Put your nuts in the fridge. So, extra pallets of walnuts purchased and put into cold storage. Next up, pistachios. And this one is high stakes because if retaliatory tariffs ever do kick in for pistachios, Alex isn't sure she could afford to buy them at all. Like, pistachios are already an expensive nut and then having to pay another 25 percent. It's just, it's so expensive. Of course, she could raise prices, but? Could our customers afford that? I don't know. Like, I think we're all going to have to be faced with this, right?

14:06Everything is going up. So her ideal would be to stockpile pistachios, too, just in case. But unfortunately for me, pistachios aren't really ready. So for nearly two months, she had been, in her words, lovingly pressuring her farmer, Brad, to get the pistachios on the road. I've been kind of like, hey, Brad, how's it going? Hey, Brad, are they ready yet? And he's like, it just, it's taking longer. Yeah, it's not like food can grow faster just because tariffs might be coming, right? So Alex just has to like hope, hope, hope that pistachios don't come into the line of fire while she waits. But the pecans, the pecans are already a marked man, a marked nut.

14:48Alex has to act fast. So she emails Shirley, her pecan supplier in Arkansas, and she's like, can you get your pecans on a truck before March 4th? That is the day when Canada's retaliatory tariffs are actually going into effect. She wanted to go ahead and get enough to do the rest of the year. A year's supply. Alex actually pays to rent some more cold storage, which is cheaper than paying a 25 % tax on pecans. This is one way she can assert some control. But a lot of this is out of her hands. Like the exchange rate between the Canadian dollar and the American dollar, that's already hurting her.

15:23So she's already having to eat that. And then to have to put the 25 percent on top of that was something that she just didn't feel she could do. I can understand that. This could be Alex's last order of Shirley's special native pecans. And for Shirley, the supplier, the tariffs mean that she's rethinking her long-term plans. She says that over the past few years, she had gotten a lot of support and encouragement from the state of Arkansas to get into the export business. She attended webinars and meetings with trade groups. She'd even been thinking about trying to expand her pecan empire to grocery stores in Canada.

16:01But now, with all of the chaos around Trump's tariffs, Shirley says that doesn't seem like such a good idea anymore. I mean, this guy changes every other day. One day he's going to do it and the next day he's not. Well, an oil person doesn't do business that way. You know what I'm saying? You make your decision and you stick with it. So when someone throws this curveball in here, it's just not something that makes any sense to me right now. Shirley's pecans arrive in Canada on March 3rd, the day before the tariffs go into effect. Alex has successfully stockpiled a year's supply of pecans just in time.

16:41I just kind of hopped into speed mode with Shirley. So I'm glad that I got at least my pecans for the year. But as Alex is running around securing this stockpile, Canadians have been getting increasingly angry at the U.S. Not only is Trump threatening to pile on tariffs, he also keeps talking about making Canada the 51st state. Oh, Canadians are pissed. And this huge nationwide campaign has been taking shape by Canadians. And Canadians from British Columbia to Quebec to Newfoundland, people who do not always agree on much, they have unified behind this movement to buy Canadian and boycott the U.S.

17:28That is potentially really bad news for Nuthat. A number of customers reached out to us and said they no longer wanted to purchase anything from the U.S. So it's this retaliatory thing. I was like, well, if they're going to, you know, charge tariffs for us, you know, we're not going to purchase anything coming out of the U.S. So now what will happen to all of the delicious, perfect Arkansas pecans sitting in Alex's freezer? That's after the break.

18:03This message comes from NPR sponsor, U.S. Bank. With U.S. Bank Business Essentials, you get more than just a bank. You get a dedicated partner that provides you a powerful combo of checking and card payment processing with quick access to the money you've earned, proving that there is nothing as powerful as the power of us. Visit usbank.com today to learn more. Member FDIC. Copyright 2025 U.S. Bank.

18:56at adobe.com slash do that with Acrobat. So Alex Rodriguez has been stockpiling American nuts to get ready for the oncoming tariffs. But now she has another big problem. I'm holding like thousands of pounds worth of nuts and people are saying, well, I don't want to buy these because they're coming from the U.S. As a Canadian, Alex totally supports the Buy Canadian movement. But as a Canadian business owner, it's a little more complicated. She's getting these emails from people saying, you know, can you source your U.S. nuts from anywhere else? But of course, she's already bought a lot of the U.S.

19:38nuts. And she also thinks striking back against these small farmers and suppliers is not the right approach. If we boycott people whose values are aligned with ours and who are struggling in the same way as we are, then nobody wins. You know, like, what's the point? So Alex thinks, I just need to tell the stories of my farmers and suppliers in the U.S. You know, many of them also hate what Trump's doing with tariffs. So she writes this really long, thoughtful newsletter and she says, look, I totally get wanting to cut ties with the U.S. But let me show you who these people are. So she's like, this is Brad and his family who grow the pistachios you all love in California.

20:22And let me tell you a little bit about Shirley, my pecan supplier in Arkansas. Alex is thinking, if I just introduce them, my customers will love them as much as I do. Honestly, when we sent out the newsletter, we had the largest amount of unsubscribes we've ever had. Oh, yeah. Some people did not appreciate that newsletter. And not just that. Did you notice a hit to your sales? Oh, yeah. Yeah, yeah. Absolutely. Like, almost immediately we noticed that. I was like, really? Yeah, really. Regular Canadians decided to retaliate against Trump's policies, too. But in effect, that meant that they had to fight against Alex, a Canadian, and her business decisions.

21:01It's a weird position for Canadians to be put in. And we wanted to hear their side of the story, how they are making these decisions about how to fight in the trade war. So I headed up to Vancouver. And when I got there, I started to see evidence of the trade war everywhere. Some stores had signs out front that read Canadian owned and operated. In the supermarket, there are these little labels under the cookies or cereal that say product of Canada. And when I went into a liquor store, all of the American liquor was covered up with black blankets because British Columbia had stopped the retail sale of American alcohol.

21:40Ouch. But obviously, we were most interested to see what was happening at Alex's Nut Hut. Were people boycotting American nuts too? Hi, how are you? Now when I got there, things seemed calm. I went in to meet Alex in person. Hi, how are you? I'm all right, how are you? Nut Hut isn't a typical store. It's more like a little production facility. Okay, so would you give me a tour? I would love to give you a tour. There you go, ready to shop. It was a short tour. It was a short tour. Alex says they use this tiny space to process and pack the nuts. And this is where, so we have a packing table, we have a dehydration table.

22:21And the occasional customer walks in to pick up their order. Amy! Alex seems to know all of her customers by name, like Amy Robinson. Amy's here to pick up some almonds and cashews, not American nuts. I'll take five pounds. And when I asked Amy how she's participating in the trade war, I learned that she is like the most bi-local person ever. She runs a nonprofit called Loco BC, which tries to encourage people to buy stuff from this province, from British Columbia. And she told us something interesting about how tariffs are affecting politics within Canada. First, you know, trade barriers are not just a thing between Canada and the U.S.

23:02There are also trade barriers within Canada, like between the different Canadian provinces and territories. Like here in BC, we have a lot of local food producers. They're not necessarily going to be on the shelves, especially interprovincially, right? We have a lot of trade barriers that you might find them in the shelf on the States before you'd find them on the shelves in Alberta or Manitoba or wherever. Interprovincial trade barriers. Like you can't go online and order Okanagan wine and have it shipped to your home in Toronto. There are a lot of these kinds of rules. Oh my God, yeah, there are a lot, yeah.

23:33So sometimes they make sense, but I think a lot of them are just historic and there has not been the political will to look at them. But now there is the political will. These tariffs are acting like a great unifier in Canada, bringing Canadians together against a common enemy, the U.S. The Canadian government says that interprovincial trade is really big, worth about 20 percent of the country's GDP. So they're busy removing those trade barriers. They think it could add up to$200 billion to the Canadian economy. And Amy, she had her nuts, had to go. Let me get that door for you. Another customer I talked to was Elvezio Del Bianco.

24:18He had come into the nut hut to pick up his family's order. They are also trying to buy Canadian, not just nuts, all the things. We're trying to avoid buying products made in the States. Made in the States or grown in the States? Whatever, you know, it's a product, oh, it's made there, whatever. We can't eliminate everything. It's difficult so far, but we are definitely trying to avoid that and trying to source it from other places. Okay, when you just did that, like, is that because people are, like, parsing it in weird ways and they're trying to figure out how to parse it? No, because I understand that it's really complicated.

24:47And because we've been living in a globalized economy for a long time, and so what's made where and what part of it is Canadian or American or Mexican or anything else is hard to assess. But where it is clear to assess, we're assessing altogether. Yeah, it's hard to tell if something is really Canadian. Like maybe something was processed and bagged in Canada, but grown somewhere else. Or maybe it's packaged in Canada, but not actually owned by a Canadian company. In those cases, is it really Canadian or is it just maple washing? Elvettio says it's not always easy to tell. Makes it hard to figure out what he wants to buy.

25:27I also talked to this other customer, a man named Sam Shea. Alex was putting some fairly large bags on the counter for him. It looks like you're feeding a dozen people. It's not that many people. He also said he's trying to buy Canadian. Are you changing your buying habits in general? Definitely. You are? Yes. Okay, so what are you doing differently? Way less Amazon. Almost none, if possible. Okay, because Amazon's an American company. Yeah. So if you don't do Amazon, do you do a different service? Just trying to find Canadian companies that sell a similar or the same product if possible. Okay.

26:01But like how come that's okay? I point to the bag of Shirley's Arkansas Pecans he's buying. Well, we love Nut Hut. And it's just hard to find such fresh, high quality nuts other places in the city. I mean it really doesn't exist to get it this fresh. And then are there other exceptions you'll make aside from American pecans? I mean, I try not to, but of course you have to once in a while. This was the sense I got from my time at Nuthut. These trade-offs get so complicated that in the end, some people just buy the American nuts. Sam was not alone. Right, because many of Nuthut's customers were already trying to use their Canadian dollars to buy local or buy organic or protect the environment.

26:49Now adding buy Canadian only to their list is one more criteria in an already oblique world of international trade. Like, it's hard to choose which issue matters most. And that's why for Alex at Nut Hut, her business hasn't actually taken that big a hit. I think yesterday I was looking at her numbers. I'm like, oh, they seem to be just fully recovered again. She did lose some customers who definitely do not want American nuts. but she actually gained new customers too who were also trying to boycott the U.S. because her almonds are not from California. They are from Australia. And her hazelnuts are from Canada.