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Carney says US trade war 'will come at a cost' as Canada strikes back on tariffs
Confirmed
In Short: Prime Minister Mark Carney has warned that Canada's shift away from the US as its main trading partner will come at a cost, as retaliatory tariffs take effect.
The aerospace industry, a significant contributor to Canada's economy, is facing the brunt of the trade war. According to a report by accounting firm PwC, aerospace contributes over C$7bn to Canada's annual GDP in 2024. The US economy is about 13 times larger than Canada's, and the majority of Canadian exports are sold to the US.
Businesses on both sides of the border are scrambling to adapt to the new trade landscape. Opinion polls suggest that the majority of Canadians support retaliatory tariffs against the US. The Canadian Chamber of Commerce has urged the government to take a targeted approach to retaliation.
The Canadian government's counter-tariffs will apply to nearly C$28bn of American products, including steel, furniture, and cotton T-shirts, with tariffs as high as 50%. Data shows that Canada is diversifying its trade, with the share of US-bound Canadian exports dropping to 66% from an average of 75% before the trade war, according to July trade figures.
What's still developing
- Prime Minister Mark Carney has said that Canada's pivot away from the US as its largest trading partner "will come at a cost", as a wave of Canadian retaliatory tariffs on American goods come into force.
- In Tuesday morning's 15-minute video address, Carney said his country's main focus was to diversify its trade relationships and build its economy.
- US trade representative Jamieson Greer meanwhile said that Washington would consider imposing tit-for-tat tariffs on Canada as early as Tuesday.
- Another post showed a map of North America - including Canada and Mexico - and Greenland all overlaid with the US flag.
- Businesses on both side of the border are scrambling to deal with what comes next.
- One sector that saw a modest bump was manufacturing - a gain the Canadian government attributes to consumers and businesses buying more made-in-Canada products.
- Watch: How much can Canada fight back in its trade war with the US?
- In a video address, Carney added that the counter-tariffs against the US "are necessary to protect our workers".