Canada Strikes Back With 50% Tariffs On Us Goods

After putting away the carrot and politely excusing themselves from the negotiating table, Canucks reached for the stick. Canada announced tariffs of up to 50% on US exports yesterday to mirror US duties that took effect following the breakdown of trade talks over the weekend.

Canada said it’ll tax $20 billion worth of made-in-the-USA goods at 15%, 25%, and 50%, matching US duties dollar for dollar. Going into effect after Labor Day, the tariffs will apply to 700 American products ranging from motorcycles and chainsaws to cheese and frozen octopus.

Targeted punches

Canada said it aims to protect local businesses that were undermined by US tariffs, and exert pressure on American politicians ahead of the US midterm elections in November.

• While the tariffs will affect just 7% of US exports to Canada, the products were chosen to target particular industries.
• For instance, seafood duties are thought to be aimed at exports from Maine, where Republican Sen. Susan Collins is campaigning for reelection in a close race.

But…commentators noted that Canada’s choice to tariff consumer goods like food and clothes will likely hurt local shoppers, too. Economists expect Canada to suffer more from US tariffs than vice versa, since stateside trade makes up a larger portion of its exports than shipments to Canada do for the US.

Cross-border threats continue

Yesterday, President Trump floated the idea of renaming Lake Ontario to “Lake America,” saying that he doesn’t anticipate the US doing much business with the eponymous Canadian province.

Earlier in the week, Ontario Premier Doug Ford said he discussed a tax on Canadian power exports to the US with Prime Minister Mark Carney, which could raise electricity prices for Americans. Meanwhile, Trump has threatened to double import duties on Canadian cars and trucks to 50%, which could devastate Canada’s auto sector.

Still…top Trump administration officials and Carney have said that they’re potentially willing to return to the negotiating table.—SK

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