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Mark Magnier

With the well-telegraphed arrival of Canadian retaliatory tariffs on US products on Tuesday, importers, exporters and trade officials waited to see which side would blink first with billions of dollars at risk in one of the world’s largest trading relationships.
At midnight, Canadian tariffs of up to 50 per cent took effect on C$27.6 billion (US$19.9 billion) worth of steel, aluminium, apparel, farm equipment and other American goods, escalating an economic stand-off that saw negotiations break down and US President Donald Trump announce sweeping duties on Canadian products.
Hours before Canada’s tariffs took effect, Trump opened a new front by threatening to block sales of Bombardier aircraft in the US unless the Quebec-based plane maker moved its manufacturing there.
By Tuesday afternoon, Trump had extended his list of grievances to the dairy industry and government procurement.
“Canada has been ripping us off for years,” he wrote in a lengthy social media post. “That is not reciprocity, it is a Canadian Trade Scam.”
Bombardier responded by highlighting the tens of thousands of US jobs it supports through its operations and supply chain.
Analysts held out hope that the two could find common ground in their US$900 billion trade relationship.
“Clearly, at this point each side does not want to look too anxious to re-engage in fear of looking weak,” said Wendy Cutler, senior vice-president at the Asia Society Policy Institute. “But importantly, [Canadian Prime Minister Mark Carney] he has not closed the door to talks.”
Both sides are doing their sums and assessing their vulnerabilities even as the clash tests the ability of smaller economies to counter US intimidation and as Canada reaches out to China, India and Europe to diversify its trade structure.
The Canadian economy is around 8 per cent the size of its southern neighbour’s and far more interdependent. Nearly 60 per cent of its imports come from the United States and some 70 per cent of exports go to the US market, with Carney’s popularity likely to ebb in a protracted clash.

On the US side, the pain will fall disproportionately on several key US battleground states ahead of the November US midterm elections, including Michigan, North Carolina and Pennsylvania.
“Nobody in Ottawa picked this list out of a hat,” said Kyle Peacock, principal with Peacock Tariffs Consulting. “Whether that moves the White House is another matter.”
Democratic Senate candidate Abdul El-Sayed slammed Trump’s tariff policy on Monday. The trade war is “a war on Michigan because we have to pay the price every day for goods that shouldn’t cost as much as they do”, he said.
The fight also comes as Trump’s popularity hits new lows, affordability is a major election issue and his agricultural base is already hurting from his other tariffs.
“Our farmers are really taking it on the chin, the back, the kidneys,” said Nicole Bivens Collinson, managing principal with law firm Sandler, Travis and Rosenberg, formerly with the Office of the United States Trade Representative and the Commerce Department. “There are clear aces that Canada holds.”
Betting market Kalshi on Tuesday gave 19 per cent odds that a deal would be reached before November 1, 50 per cent before December 1 and 30 per cent before January 1.
In classic Trump fashion, the president released a meme depicting himself as a dominating hockey player looming over Carney and telling him to “Get up, Governor”, one of several barbs issued by the president and his administration.
This followed a social media post by Pentagon chief Pete Hegseth that appeared to mock the physical appearance of a Canadian soldier.
Trump also signed an order in August directing US federal agencies to refer to Lake Ontario as “Lake America” and has previously said that Canada should become the 51st US state.
These remarks were “beneath their office” and “not constructive”, Carney said, adding that both sides can return to negotiations “when the Americans stop doing memes” and start being serious.
Canada’s duties of 15 per cent, 25 per cent and 50 per cent apply to 629 US tariff items, including aluminium products, appliances, cheese and other dairy goods, although Canada removed some seafood products from its initial list.
This followed Trump’s imposing 50 per cent tariffs on a similar amount of Canadian products involving Washington termed “discriminatory treatment” against the US alcohol, automobile and dairy industries.


In breaking off US-Canadian negotiations on August 21, Carney said the US terms were unacceptable, accusing Washington of adding onerous terms at the eleventh hour while the US countered that it was Canada that acted in bad faith. The two sides have not resumed negotiations since.
But analysts expressed measured optimism that a breakthrough will eventually be found, with the caveat that the Trump administration tends to embrace unpredictability, which it sees as a source of leverage, and massive threats that the US leader often walks back.
“This stand-off is likely to end in the coming weeks and months as targeted economic pain caused by the tariffs is felt in both economies,” said Cutler, a former senior US trade negotiator. “The big unknown now is whether, how and when the administration may take further escalatory measures.”
But a long showdown could mean a lot of pain for importers and exporters.
“Tariffs on today will persist potentially for months,” said Henrietta Treyz, economic policy director with consultancy Veda Partners. “And we caution that escalation from here appears more likely than de-escalation.”
Others agreed. “Long haul – plan for that and treat a reversal as a bonus,” said Peacock. “The reason isn’t politics, it’s plumbing.”
When the US Supreme Court struck down Trump’s use of emergency tariff powers in February, the administration rushed to replace that authority with more deliberative sections 232, 301 and 338 of trade law.
“Those take process to build, which means they take process to unwind,” added Peacock. “I expect de-escalation one sector at a time, metals and autos first, not a clean return to duty-free trade before the midterms.”
Trump’s announced crippling auto tariff increases are not set to go into effect until the beginning of the new year.
“US and Canadian companies have little choice but to buckle their seat belts and get ready for further escalation,” Cutler added.


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Canada’s retaliatory US tariffs take effect as Trump threatens Bombardier sales

US President Donald Trump (left) and Canadian Prime Minister Mark Carney at the G7 meeting in Evian-les-Bains, France on June 16. Photo: Getty Images


Bombardier aircraft make up a major portion of regional fleets across North America. Photo: Shutterstock

Canada hits US goods with tariffs of up to 50% as trade war escalates

Canadian Prime Minister Mark Carney speaks about the trade dispute with the US in Levis, Quebec, on Monday. Photo: AFP

Canadian Finance Minister Francois-Philippe Champagne said Ottawa’s measures were intended to defend Canadian workers and businesses. Photo: AP

Canadian Prime Minister Mark Carney on Monday. Photo: AFP

People look out across Lake Ontario and the Toronto skyline. Donald Trump said the US was considering renaming Lake Ontario ‘Lake America’. Photo: The Canadian Press via AP

Carney fires back at Trump as US-Canada trade fight escalates: ‘stop trying to be tough’

Canadian Prime Minister Mark Carney in Ottawa on Tuesday. Photo: The Canadian Press via AP

Pentagon chief Pete Hegseth posted a message on X that appeared to mock the physical appearance of a Canadian soldier. Image: X/PeteHegseth

US President Donald Trump and Canadian Prime Minister Mark Carney at the G7 in Evian-les-Bains, France, in June. Photo: Reuters

Carney’s Liberals win 3 special elections in Canada amid trade clash with US

Canada’s Prime Minister Mark Carney. Photo: AFP

What does the US-Canada trade dispute mean for China?

Shipping containers are seen in the Port of Montreal in Quebec, on Sunday. Photo: AFP

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Ottawa targets US$20 billion in US goods after trade talks collapsed, with both sides digging in and analysts warning of further escalation


Ottawa targets US$20 billion in US goods after trade talks collapsed, with both sides digging in and analysts warning of further escalation.


Canada’s retaliatory US tariffs take effect as Trump threatens Bombardier sales

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Ottawa targets US$20 billion in US goods after trade talks collapsed, with both sides digging in and analysts warning of further escalation

Ottawa targets US$20 billion in US goods after trade talks collapsed, with both sides digging in and analysts warning of further escalation