New Canadian tariffs targeting roughly $20 billion in U.S. imports officially snapped into place on Tuesday, the latest escalation in an increasingly costly trade war that has ensnarled two longtime allies.
The duties apply to a variety of U.S. goods, including clothing, cheese, metal parts and wood products. The approach is meant to mimic the taxes that President Trump imposed on Canada after trade talks between the two neighbors collapsed in acrimony last month.
For now, the economic effects of the tit-for-tat may be limited because the tariffs encompass only a small portion of the annual trade between the United States and Canada. The more pressing concern is a potential cycle of retaliation, one that results in even higher and more exhaustive duties that harm families and businesses on both sides of the border.
In Canada, Prime Minister Mark Carney has sought to position himself as a bulwark against Mr. Trump’s trade aggression, describing his nation as “at war.” Canadian officials generally have pledged to respond “dollar for dollar” to any U.S. duties.
In Washington, the president and his aides have repeatedly mocked their Canadian counterparts and the size of their ally’s economy and military. Mr. Trump has already threatened additional tariffs on auto imports from Canada, and on Friday, he even suggested he could try to halt bilateral trade outright.
Then, hours before Canada’s new tariffs took effect, Mr. Trump took to social media to continue his attack. He singled out Bombardier, a Canadian plane manufacturer, claiming there would be “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”
In doing so, the president accused Canada of blocking “our GREAT American Banks, and Companies,” and he encouraged U.S. consumers to refrain from buying some Canadian goods.
“BUY AMERICAN. FLY ON AMERICAN AIRLINERS. ENJOY AMERICAN LIQUOR AND BEVERAGES. SAIL ON LAKE AMERICA,” Mr. Trump wrote.
The White House did not respond to a request for comment.
The spat with Canada offered the latest evidence that Mr. Trump remains as committed as ever to his disruptive strategy of trade brinkmanship. Despite nearly two years of blistering court defeats, vicious international disputes and mounting domestic blowback, tariffs remain the president’s preferred tool to try to boost domestic manufacturing and broker better trade deals.
“This tit-for-tat retaliation is bad for Canadian businesses and consumers, and bad for American businesses and consumers,” said Brad Wood, the senior director for trade and innovation at the National Foreign Trade Council, a policy advocacy group whose board of directors includes Caterpillar, Exxon Mobil, Ford Motor and Walmart.
“Every escalation is one more layer of barriers that ultimately Canada and the United States need to resolve,” Mr. Wood added. The question now, he said, is whether Mr. Trump intends to follow through with his threats.
While he spars with Canada, Mr. Trump and his aides are also putting the final touches on a roster of new tariffs targeting dozens of additional countries that the administration has accused of engaging in unfair trade practices. The latest round is expected to find that other nations overproduced certain products — what the administration has called “excess capacity” — leading to large and persistent U.S. trade deficits with those nations.
Those taxes, which could arrive as soon as this week, are meant to replace some of the duties that the Supreme Court struck down in February.
Further inflaming tensions, Mr. Trump has even threatened to block all trade involving countries that export more to the United States than they import from it. Currently, the United States has a yawning trade deficit in goods and services involving dozens of trading partners, including many in Europe and Asia. A halt to imports could prove economically cataclysmic.
Each of those actions could create new financial pressures on American families and businesses. Tariffs are taxes on imports, meaning products from abroad can become more expensive. To that end, the president’s global trade war has only exacerbated policymakers’ yearslong fight with inflation, with the next report on consumer prices set to arrive this week.
The trade dispute between the United States and Canada exploded into public view in July after Mr. Trump accused Canada of discriminating against U.S. industries. In response, he promised to impose tariffs of 50 percent on select Canadian goods unless the two sides could reach some sort of deal in 30 days.
Talks had proceeded for months, and at various points in August, Mr. Trump seemed confident that a resolution was within reach. But negotiations collapsed before his deadline, prompting both sides to blame each other for scuttling the negotiations with unreasonable, last-minute demands.
As a result, Washington imposed duties in August on hundreds of Canadian imports, including wine, cheese, clothing and hockey sticks. Mr. Carney and other Canadians immediately promised to retaliate with their own tariffs on similar products after Labor Day.
Since then, U.S. officials have responded with threats and outright derision, with Mr. Trump even signing an executive order seeking to rename Lake Ontario as Lake America. The president has attacked Canada’s political leaders, and on Sunday, he also took aim at its currency.
“Canada’s (currency) Dollar imbalance with the U.S. is unacceptable,” he said on social media. “It has been that way for years — but no longer!”
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