Canada has announced retaliatory tariffs against the US, signaling the start of a trade war between the neighboring countries. Prime Minister Justin Trudeau imposed significant tariffs of 25%, affecting $155 billion Canadian dollars' worth ($106.6 billion; £86 billion) of American goods, including beer, wine, household appliances, and sporting goods.
Trudeau mirrored US President Donald Trump's tariffs on Canadian and Mexican imports, along with an additional 10% on Chinese imports. This decision was driven by Trump's concerns regarding illegal immigration and drug trafficking.
Trudeau stated his determination to defend Canadians without backing down, emphasizing the real consequences for both nations. He expressed reluctance at the situation, stating, "We didn't ask for this." The tariffs on American goods, totaling $30 billion, will take effect on Tuesday, while an additional $125 billion will follow in 21 days to allow Canadian businesses time to adapt.
The Canadian response targets various American products, including beer, wine, bourbon, fruits, vegetables, perfumes, clothing, shoes, household appliances, sports equipment, and furniture. Lumber, plastics, and potential non-tariff measures concerning critical minerals and procurement are also under consideration.
Economists have cautioned that these tariffs could lead to increased prices for consumers. Trump views tariffs as vital for economic growth, job protection, revenue generation, and policy enforcement.
The intertwined economies of Canada, Mexico, and the US handle extensive trade daily, with Canada being a key supplier of crude oil to America. Despite the imposition of 25% tariffs on Canadian goods, Canadian energy faces a lower 10% tariff.
Trudeau rebutted claims of security issues at the border and emphasized that tariffs are not the optimal solution for addressing shared challenges. Trump has expressed readiness to escalate duties if countries retaliate, as seen with Canada's response.
Carney, former head of Canada's and England's central banks, highlighted the detrimental impact of the tariffs on economic growth and global reputation. He also discussed the potential ramifications for US credibility worldwide.