The federal government took the phrase “an eye for an eye” to heart, wasting no time responding to the U.S.'s 25% tariffs on Canadian goods and 10% on Canadian energy.
What happened: Ottawa announced 25% retaliatory tariffs on $30 billion worth of U.S. imports, including coffee, beer, apparel, and cosmetics. In three weeks, the tariffs will expand to another $125 billion worth of goods, likely including categories like produce and autos.
- Donald Trump responded with a Truth Social post threatening tariff increases, but the commerce secretary later said Trump might soon announce ways Canada could earn tariff relief.
Why it matters: While the immediate economic shocks to the tariffs are already being felt, the trade war is also stoking national unity. Many provinces are looking at ways to cut down trade barriers, support Canadian businesses, and hit the U.S. where it hurts.
- Provinces like Manitoba, Ontario, B.C., Newfoundland and Labrador, and Nova Scotia are pulling some or all U.S. booze from provincially run liquor store shelves.
- Ontario Premier Doug Ford said that cutting off electricity imports, cancelling a Starlink deal, and legislating the promotion of Canadian products by retailers were all on the table.
- New Brunswick and Nova Scotia were uber-aggressive, both barring U.S. companies from bidding on provincial contracts. Nova Scotia also doubled tolls for U.S. commercial vehicles.
Zoom out: Mexico and China were also hit by new tariffs. China responded by levying an extra 15% tariff on several U.S. farm imports, and adding controls on lumber and fibre optic products. Meanwhile, Mexico is set to announce its retaliatory measures on Sunday.—QH