Canada is hitting back in its trade war with the United States. According to CBC News, the federal government announced that Canada will match American tariffs dollar for dollar, rate for rate, effective September 8, imposing counter-tariffs on hundreds of US goods. The move marks a sharp escalation of the dispute, and it comes after talks between the two countries broke down.
CBC News reported that Finance Minister Francois-Philippe Champagne announced the retaliatory tariffs, which will kick in next month. The counter-tariffs of up to 15, 25 or 50 per cent will apply to 27.6 billion dollars in imports from the United States, covering hundreds of American goods. As CBC noted, the list is extensive enough to run to some 40 pages of seafood products alone.
Alongside the tariffs, the government moved to cushion the blow at home. According to CBC News, Ottawa also announced a 7.5 billion dollar aid package for Canadian businesses hit by the trade war. The government said it would go to Alberta, British Columbia and Ontario to meet business owners, telling them it will protect their businesses and protect their jobs, and it urged Canadians to buy Canadian.
CBC senior business correspondent Peter Armstrong cautioned that the measures come with a domestic cost. He explained that the counter-tariffs will drive down demand for American products by driving up the price for the Canadian importers who buy them. That, he said, will translate into a minor boost to inflation for Canadian consumers.
Armstrong noted that the relief measures unveiled on the same day are designed to blunt that damage. According to CBC News, the support package will offset around half of the potential drag on growth, which in turn makes near-term interest rate hikes less likely. The government, he said, is trying to strike a balance, causing some pain without causing too much pain at home.
The reach of the American tariffs, Armstrong said, is narrower than it might seem, but painful where it lands. He told CBC News that the US tariff hits roughly 5 per cent of Canadian exports, meaning most Canadian exports will be just fine. In the industries that are targeted, however, he warned that where it hurts, it hurts really badly.
Beyond the tariffs themselves, CBC reported, it is the uncertainty that has eaten into economic growth even more than the measures. Businesses are left unsure whether the tariffs are a negotiating tactic that will last a few months or a permanent fixture on the landscape. Meanwhile, US President Donald Trump and his team have blamed Canada for the breakdown in the talks, while Canada has done the opposite.