West Post
Canada's retaliatory tariffs on a range of US goods came into effect on Tuesday, targeting nearly C$28bn ($20bn; £15bn) worth of American products, including steel, furniture, and cotton T-shirts, with rates up to 50%. Fresh fish and lobster were initially included but later removed after pressure from the seafood industry, highlighting the delicate balance Canada must maintain in its retaliation against its largest trading partner.
Both US and Canadian officials have expressed a desire to resume trade talks, which collapsed in late August, but no progress has been made. Prime Minister Mark Carney stated Canada is ready to negotiate a durable deal when the US is ready. US Trade Representative Jamieson Greer criticized Canada for rejecting an offer, suggesting the US might retaliate by banning Canadian products. President Donald Trump threatened to halt US business with Bombardier unless it relocates manufacturing south of the border, a move that could cost Canada over C$7bn annually in GDP.
The US already imposes a 25% tax on Canadian cars and trucks, along with tariffs on steel, aluminum, and lumber. In August, Trump imposed new 50% tariffs on goods like dairy, alcohol, hockey sticks, and perfume. Canada’s retaliatory measures, described as dollar-for-dollar, apply to hundreds of US imports as of midnight on Tuesday. Existing tariffs on non-compliant US cars and trucks under the USMCA/CUSMA agreement remain in place.
Public opinion in Canada supports retaliatory tariffs, but economists warn they will raise prices for everyday goods like clothing, food, and furniture. The Canadian Chamber of Commerce advises a surgical approach to avoid escalation, though businesses are preparing for prolonged trade disputes. The lobster industry faces challenges due to cross-border dependencies, with American-caught lobster often processed in Canada before being shipped back.
Economically, Canada’s GDP grew 3.3% in the second quarter, with job gains of 181,000 from April to July. However, 41,000 jobs were lost in August, coinciding with new US tariffs and collapsed trade talks. Manufacturing saw a modest increase, attributed to domestic product consumption. Carney aims to diversify Canada’s trade away from the US, with US-bound exports now at 66% of the pre-war average.
Source: BBC
