Canada Prepares for Trade War with Counter-Tariff Implementation Against the USA
Canada is preparing for a long-term trade war by implementing counter-tariffs against the United States. These tariffs, which came into effect on Tuesday, cover American products worth approximately 28 billion Canadian Dollars (20 billion US Dollars). The applied tariffs encompass a wide range, from steel furniture to cotton t-shirts and seafood, and can reach up to 50% on some products.
Canada had to remove fresh fish and lobster from the list of counter-tariffs following reactions from the seafood industry. This situation highlights the difficulty of maintaining balance in tariffs imposed against Canada's largest trading partner. Although both US and Canadian officials have stated that they want to reach an agreement, no progress has been made since the collapse of talks at the end of August.
Canadian Prime Minister Mark Carney emphasized last week that they are seeking a permanent solution with the US. Carney stated, "We are ready to sit down and make this deal when the Americans are ready." US Trade Representative Jamieson Greer expressed that Canada's decisions are up to them, saying, "We offered them the best deal, and they turned their faces away." Greer also warned that the US could ban the import of certain Canadian products in retaliation.
US President Donald Trump threatened to halt all operations of Bombardier, a Canada-based aircraft manufacturer, if the company does not move its production to the US. Bombardier is a significant firm contributing 7 billion Canadian Dollars to Canada's annual GDP. With the implementation of new tariffs, significant uncertainty has arisen in trade relations between the two countries. While the US imposes a 25% tax on Canadian-made cars and trucks, Canada did not delay in responding with counter-tariffs.
Canada's current economic situation was showing a positive trend with a growth rate of 3.3% in the second quarter and 181,000 new job opportunities. However, there was a loss of 41,000 jobs in August. Economists warn that the new counter-tariffs will lead to price increases in products like daily consumer goods. The Canadian Chamber of Commerce states that caution is needed in the implementation of counter-tariffs and expresses that they do not want a continuous escalation. Prime Minister Carney promised to diversify Canada's trade to markets outside the US, noting that the proportion of products exported to the US has also decreased.
Source: BBC Business
