{"id":181565,"date":"2026-08-25T00:24:08","date_gmt":"2026-08-25T00:24:08","guid":{"rendered":"https:\/\/www.europesays.com\/canada\/181565\/"},"modified":"2026-08-25T00:24:08","modified_gmt":"2026-08-25T00:24:08","slug":"ottawa-faces-dilemma-as-it-weighs-how-to-hit-back-at-u-s-over-tariffs","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/canada\/181565\/","title":{"rendered":"Ottawa faces dilemma as it weighs how to hit back at U.S. over tariffs"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Prime Minister Mark Carney speaks about Canada’s response to new U.S. tariffs as Canada-U.S. Trade Minister Dominic LeBlanc and chief trade negotiator Janice Charette listen during a news conference on Parliament Hill in Ottawa on Saturday.PATRICK DOYLE\/The Canadian Press<\/p>\n

Eighteen months into the Canada-U.S. trade war, Prime Minister Mark Carney<\/a> faces the same dilemma his predecessor did at the outset of the conflict: how to retaliate against a powerhouse economy without shooting yourself in the foot.<\/p>\n

In that sense, dusting off the tariff playbook pursued by former prime minister Justin Trudeau might be a wise move, according to several experts. <\/p>\n

After U.S. President Donald Trump<\/a> imposed 50-per-cent tariffs on roughly $28-billion of Canadian exports to the United States, Mr. Carney vowed to fight back<\/a> with dollar-for-dollar tariffs on U.S. imports set to take effect on Sept. 8.<\/p>\n

The government plans to announce its response to the tariffs on Tuesday. So far, it has yet to release any details of what products will be targeted, reviving a guessing game among trade watchers that led up to Mr. Trudeau\u2019s imposition of broad-based retaliatory tariffs in March, 2025.<\/p>\n

Analysis: Americans, too, are wondering why the U.S. and Canada are embroiled in a trade war<\/a><\/p>\n

Consumer products bore much of the brunt when the federal government first slapped countertariffs on $30-billion<\/a> worth of American goods in the first round of its response last year.<\/p>\n

\u201cThat\u2019s a good way to do it in that it\u2019s likely to impose the least harm on the Canadian economy,\u201d said Joseph Steinberg, a University of Toronto professor specializing in international economics and trade policy. He said putting more focus on manufacturing inputs would have raised production costs for Canadian businesses and potentially caused broader economic damage. <\/p>\n

\u201cOf course, the downside of focusing tariffs on consumer products is that it\u2019s the lowest-income people in the country who bear the brunt,\u201d he said. \u201cThose who are the most price-sensitive.\u201d<\/p>\n

Even though the initial round of countertariffs was in place for less than six months, Prof. Steinberg estimates it contributed about half a percentage point to inflation during that period, meaning prices were roughly 0.5 per cent higher than they otherwise would have been.<\/p>\n

\u201cCanadians will bear the brunt of any kind of retaliatory measures,\u201d he said. <\/p>\n

Yet those retaliatory tariffs did leave a mark on U.S. exporters. Trade numbers show imports of items covered under that first round of retaliatory tariffs, which lasted from early March, 2025, until Mr. Carney removed them on Sept. 1, 2025, declined by close to 17 per cent during that period compared with the same period in 2024. <\/p>\n

That was a steeper drop than the 5-per-cent decline in overall U.S. imports over the same time frame. <\/p>\n

The flip side to that is the inflationary effect retaliatory tariffs have here at home, since tariff costs incurred by importers are inevitably passed on to consumers and domestic producers.<\/p>\n

Carney calls Trump tariff threat unsurprising, says trade deal remains possible<\/a><\/p>\n

According to Bank of Canada research, prices of those tariffed products rose about 6 per cent relative to untariffed goods by mid-June, 2025, or about one-quarter of the 25-per-cent tariff. <\/p>\n

It comes down to striking a balance between showing force and minimizing the burden on Canada\u2019s economy, said Randall Bartlett, deputy chief economist with Desjardins Group. That means targeting products that are either produced here or are easily substituted with imports from other countries.<\/p>\n

\u201cIt\u2019s a playbook that makes a lot of sense when you\u2019re trying to minimize the domestic economic impact but have sufficient impact to bring the other side back to the table,\u201d Mr. Bartlett said.<\/p>\n

The real test is whether a tariff can move \u201can American boardroom\u201d to lobby Washington to de-escalate the trade war, \u201cwithout moving a Canadian grocery bill or factory cost,\u201d said Andreas Schotter, international business professor at Ivey Business School. \u201cOttawa should target finished goods with ready substitutes and political leverage, while protecting inputs and necessities.\u201d<\/p>\n

For example, the Carney government could target premium consumer and leisure goods such as spirits, wine, cosmetics and recreational equipment, he said. \u201cThese are visible, deferrable and easier to substitute.\u201d<\/p>\n

Another strong option would be finished appliances and electronics, targeting only models and categories with strong non-U.S. supply, Prof. Schotter said. He suggested they \u201ccarve out repair parts, specialized equipment and inputs used by Canadian firms.\u201d<\/p>\n

The U.S. midterm elections in November will factor heavily into Canada\u2019s response, with Ottawa hoping the balance of power in Washington shifts in its favour. <\/p>\n

Ottawa readies tariff-relief plan for businesses<\/a><\/p>\n

The Carney government would maximize the impact of its response if it aimed countertariffs at states such as Michigan, Ohio, Maine, Alaska and Iowa, according to a Monday analysis from global strategy and advisory firm Capstone DC. <\/p>\n

Andrew LaScaleia, the firm\u2019s vice-president, said Ottawa could direct those tariffs \u201cwhere they are politically most punishing for the United States, for Trump.\u201d<\/p>\n

Maine, for example, might be targeted for its exports of lumber and seafood, while Iowa and Ohio have machinery and agricultural-equipment manufacturers such as John Deere. <\/p>\n

These states are either part of Mr. Trump\u2019s base or have senators up for re-election. \u201cThat\u2019s sort of the sweet spot because then you create political damage for Trump while at the same time bolstering your own domestic industry,\u201d Mr. LaScaleia said, \u201cand limiting the harm to consumers.\u201d <\/p>\n

Economists cautioned any tariff response from Canada is almost certain to garner another tariff attack from the U.S.<\/p>\n

On Monday, Mr. Trump threatened to double auto tariffs on Canada from 25 per cent to 50 per cent starting in January, and said the tariffs would apply not only to finished vehicles but, for the first time, auto parts as well.<\/p>\n

Such threats shouldn\u2019t cause Canada to back down, said Kevin Milligan, director of the Vancouver School of Economics.<\/p>\n

\u201cA bully takes your lunch money. And you say, \u2018How much, sir? Can I give you more?\u2019 That just leaves the bully to come back for one more, 20 more,\u201d he said. \u201cYou\u2019ve got to push back. You\u2019ve got to push back smart.\u201d<\/p>\n

A timeline of Trump\u2019s trade war with Canada<\/a><\/p>\n

He said he doubts a dollar-for-dollar tariff response will have much sway on the U.S. administration because of the sheer size of the American economy. <\/p>\n

As such, Canada should pursue tougher measures on par with the provincial bans on U.S. alcohol sales, he said. That could mean curbing energy and electricity exports, he added, echoing comments made by Ontario Premier Doug Ford on Monday.<\/p>\n

\u201cWe should not back away from things that do have a cost on us because the goal here is to inflict pain on them in some way,\u201d Prof. Milligan said. \u201cAnd if that also includes some pain on us, that\u2019s the cost of doing business here.\u201d<\/p>\n

Ultimately, the Canada-U.S. trade war is as much about optics as it is actual trade flows, so Canada\u2019s eventual tariff list will likely \u201cadd in some goods for political theatre in the same way that the U.S. targeted hockey sticks to make headlines,\u201d said Bradley Saunders, North America economist at Capital Economics. <\/p>\n

Yet, Mr. Saunders said the history of the trade conflict makes him optimistic Canadian negotiators will be back in Washington within \u201ca month or two\u201d working to get the United States-Mexico-Canada trade deal renewed. <\/p>\n

\u201cWe\u2019ll see both sides trying to act fierce and announce all these measures, but I doubt they\u2019ll actually lead to much.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Prime Minister Mark Carney speaks about Canada’s response to new U.S. tariffs as…\n","protected":false},"author":2,"featured_media":181566,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[164,224,238,214,212,239,17,211,230,231,227,213,210,235,171,234,143,222,249,215,216,229,225,226,219,240,220,244,245,247,242,246,94,61,243,217,142,233,113,232,241,223,236,237,228,221,218,248],"class_list":["post-181565","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ottawa","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-ottawa","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/181565","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=181565"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/181565\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/181566"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=181565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=181565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=181565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}