{"id":179781,"date":"2026-08-23T16:08:10","date_gmt":"2026-08-23T16:08:10","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/179781\/"},"modified":"2026-08-23T16:08:10","modified_gmt":"2026-08-23T16:08:10","slug":"canada-us-and-tit-for-tat-tariffs-how-will-they-impact-their-economies-trade-war-news","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/179781\/","title":{"rendered":"Canada, US and tit-for-tat tariffs: How will they impact their economies? | Trade War News"},"content":{"rendered":"

Canadian Prime Minister Mark Carney has announced retaliatory tariffs<\/a> that will \u201cmatch Washington\u2019s new tariffs dollar for dollar\u201d after days of intense negotiations between the United States and Canada broke down.<\/p>\n

The tit-for-tat response came after US President Donald Trump imposed a 50 percent levy on $20bn of Canadian goods, or 5.5 percent of its exports, disrupting the long history of stable relations between the two North American neighbours.<\/p>\n

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Trump first imposed tariffs on key imports from Canada early in his second term last year. The two countries have scuffled since with Trump periodically making new tariff threats.<\/p>\n

So what prompted this latest escalation, and how will it impact the two Western economies?<\/p>\n

How did talks break down?<\/p>\n

In Ottawa on Saturday, Carney said the talks with the US broke down late the day before after Trump set conditions that were ultimately unacceptable.<\/p>\n

\u201cIn recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,\u201d Carney said, adding that these demands included curtailing Canada\u2019s ability to forge new trade deals, in violation of its sovereignty.<\/p>\n

\u201cWe\u2019re the partner of choice in many respects for countries around the world, and the Americans wanted to restrict that. They had language that wanted to restrict that. Unacceptable.\u201d<\/p>\n

He added that US negotiators also made unacceptable \u201cthreats\u201d to the French language and \u201cQuebec culture\u201d, referring to the French-speaking province in eastern Canada.<\/p>\n

In a speech<\/a> later in the day, Carney suggested that last-minute changes at the bargaining table had prompted him to recall his negotiators from Washington, DC, to Ottawa.<\/p>\n

\u201cIn short, they asked too much, and they offered too little.\u201d<\/p>\n

Trump responded to Carney\u2019s announcement by writing on his platform Truth Social: \u201cCanada wants the benefits of being a State, without being one!!!\u201d Trump has previously issued threats to annex Canada and make it the 51st US state.<\/p>\n

The US president claimed Canada has also charged US farmers \u201cmassive amounts\u201d of tariffs for years, adding, \u201cNo more!!!\u201d<\/p>\n

What Canadian products will be affected by the US tariffs?<\/p>\n

The list of goods from Canada that will be affected is long, ranging from whisky to goose-down jackets and ice hockey equipment.<\/p>\n

The 50 percent levy on roughly $20bn of Canadian goods covers more than 500 product categories, including:<\/p>\n

Alcohol, such as beer, wine, liquor and cider. They will likely hit popular Canadian brands from Crown Royal whisky to Molson beer.
\nDairy products from milk and cream to lactose syrup. Cheese, however, is not on the list even though Trump said a reason for the tariffs is Canada\u2019s \u201cdiscrimination\u201d against US cheeses, The Washington Post reported.
\nTechnology from smartphones to cameras, radar equipment and antennae
\nAthletic gear, notably equipment for hockey, one of two of Canada\u2019s national sports. Other sports supplies targeted include those used in golf, at gyms and in swimming pools.
\nWood products, including lumber, mouldings, plywood, furniture and fence components
\nSeasonal holiday products and gifts, including toys, clothing, Christmas decorations, jewellery, makeup and perfumes<\/p>\n

The tariffs also apply to some products that were previously protected under the US-Mexico-Canada Agreement, a trade pact signed during Trump\u2019s first term, putting its future into question.<\/p>\n

The new tariffs are being imposed in addition to pre-existing US tariffs on steel, lumber and cars.<\/p>\n

What American products will be affected by Canadian tariffs?<\/p>\n

Ottawa, meanwhile, said its retaliatory measures beginning on September 8 will target steel, dairy, appliances, farm equipment, pulp and paper, and electronics.<\/p>\n

The Canadian government will release more details on the items to be targeted in the coming days, Carney said.<\/p>\n

How will the trade war affect Canada\u2019s economy?<\/p>\n

Canada\u2019s economy is expected to face a big blow from the tariffs, some experts said.<\/p>\n

\u201cCosts are going to go up. Prices are going to go up. Unemployment is going to go up as well,\u201d Al Jazeera\u2019s David Mercer said, reporting from Calgary, the largest city in the western province of Alberta.<\/p>\n

\u201cAnd it\u2019s been warned that business owners \u2013 small [and] medium-sized businesses \u2013 some of those will have to declare bankruptcy,\u201d he said.<\/p>\n

Julian Karaguesian, a lecturer and trade expert at McGill University in Montreal, told Al Jazeera the tariffs would \u201ceffectively price hundreds of Canadian goods out of the US market\u201d.<\/p>\n

Key industries that are \u201cimportant and politically influential\u201d, including the alcohol, dairy and furniture industries, will take the biggest hit, Steven Okun, the CEO of APAC Advisors and a trade specialist, told Al Jazeera.<\/p>\n

Still, with 5 percent of Canadian exports affected out of a $382bn market, he added, \u201cit\u2019s not a huge hit to the Canadian economy overall.\u201d<\/p>\n

At the same time, Mercer said, Carney is selling the trade war as an opportunity for Canada to strengthen its trade relations with other countries.<\/p>\n

\u201cHe\u2019s been around the world. He\u2019s been talking to countries in Asia, in Europe, shoring up new trade relationships, wanting to diversify Canada\u2019s economy and Canada\u2019s trade relationships with other countries around the world just to get away from that dependency that Canada has traditionally had on the United States,\u201d he said.<\/p>\n

However, that\u2019s a tall order. The majority of Canadian exports \u2013 a whopping 73 percent \u2013 are sold in the US, totalling $409bn last year, according to the financial data company Trading Economics.<\/p>\n

The United Kingdom is next with 6 percent of Canadian exports going there while 4.4 percent of Canadian exports head to China, according to 2025 data cited by the firm, with the rest sold in various European and Asian markets.<\/p>\n

How will the trade war affect the US economy?<\/p>\n

Experts warned that steeper tariffs not only raise costs for businesses but they almost always trickle down to households in the form of higher prices, including in the US.<\/p>\n

The Business Roundtable, a group of 200 chief executives of leading US corporations, warned that the new tariffs \u201crisk raising costs for American businesses and families\u201d and have called on both governments to resume negotiations.<\/p>\n

Okun said the latest tariffs will be \u201cpolitically painful\u201d on both sides of the border.<\/p>\n

Trump\u2019s measures have neither increased trade for the US nor led to an increase in investment, as he said they would, and instead have caused inflation by raising prices, Okun explained.<\/p>\n

Having a blanket tariff policy does not work, unlike targeted tariffs, he said.<\/p>\n

\u201cTargeted tariffs can work. They can work when you have a very specific issue like with China and their unfair trade practices and you target China \u2026 in a particular sector. Those can be effective,\u201d he said.<\/p>\n

\u201cThese writ-large tariffs are not effective. They\u2019re hurting the United States, and it is very much hurting the Republican Party as they come up on these midterm elections\u201d in November.<\/p>\n

Diamond Isinger, who served as a special adviser to former Canadian Prime Minister Justin Trudeau, said ultimately both countries will suffer from the trade war.<\/p>\n

\u201cIt\u2019s going to cause pain and challenge for Canadians and Americans alike in terms of the actions that, unfortunately, the US has taken as well as Canada\u2019s retaliation. But ultimately, this was the way forward. This was the only realistic next step,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"Canadian Prime Minister Mark Carney has announced retaliatory tariffs that will \u201cmatch Washington\u2019s new tariffs dollar for dollar\u201d…\n","protected":false},"author":2,"featured_media":179782,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[433,17,116,437,30,438],"class_list":["post-179781","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-business-and-economy","tag-canada","tag-news","tag-trade-war","tag-united-states","tag-us-canada"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/179781","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=179781"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/179781\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/179782"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=179781"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=179781"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=179781"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}