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Canada braces for prolonged trade war as counter-tariffs take effect
Developing
In Short: Canada's retaliatory tariffs on US goods have come into effect, with no immediate sign of a trade deal, as both sides prepare for a prolonged conflict.
Canada's retaliatory tariffs on a range of US goods, amounting to nearly C$28 billion, have taken effect, marking the beginning of a potential prolonged trade war between the two nations.
While one sector, manufacturing, saw a modest bump due to consumers and businesses buying more made-in-Canada products, the overall impact remains uncertain.
Prime Minister Mark Carney stated that Canada is still in search of a deal with the US that is 'durable' and in the best interests of both countries, highlighting the ongoing diplomatic efforts.
US trade representative Jamieson Greer responded by saying that the ball is in Canada's court, indicating that the US is waiting for Canada to make the first move in negotiations.
President Donald Trump threatened to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south, a move that could significantly impact the company, which contributes over C$7 billion to Canada's annual GDP in 2024.
The situation is further complicated by Trump's series of Truth Social posts, where he criticized Canada's exchange rate with the US and called it 'unacceptable', adding to the tension between the two nations.
What's confirmed
What's still developing
- The counter-tariffs will apply to nearly C$28bn ($20bn; £15bn) worth of American products, from steel to furniture to cotton T-shirts, and will be as high as 50%.
- Fresh fish and lobster were also on the list, but Canada later omitted them after pushback from its seafood industry - a sign of the tricky balance it has to strike as it retaliates against its largest trading partner.
- The company is one of the largest in the country, contributing over C$7bn to Canada's annual GDP in 2024, according to a report commissioned by Bombarier by public accounting firm PwC.
Sources
- BBClink