WASHINGTON, D.C. — The trade war between the United States and Canada is escalating — with new Canadian tariffs on the U.S. taking effect today.
The tariffs are expected to impact billions of dollars worth of U.S. goods.
“There’s always a cost to action, but it doesn’t come close to the cost of standing still,” said Canadian Prime Minister Mark Carney in a video posted to social media Tuesday.
Canada’s retaliatory tariffs on $27.6 billion worth of U.S. goods are now in effect, with levies ranging from 15% to 50%.
Tariffs on American steel and aluminum will double to 50%. Furniture, clothing and other products are among the highest rates. Appliances, dairy, farm equipment, paper and electronics are also targeted.
Prime Minister Carney calls the tariffs a match of recent U.S. tariffs “dollar for dollar, rate for rate” after President Trump imposed 50% levies on $27.6 billion of Canadian goods.
“This is about who we are as Canadians. It’s about our livelihoods and the country we leave to our kids. The truth is, adversity only makes us stronger. It always has,” Carney added.
Democratic lawmakers were quick to criticize President Trump’s trade strategy and the trade war with Canada.
“President Trump’s costly trade war with Canada is the latest example of the president playing political games at the expense of our economy, our alliances, and American families’ financial security. This trade war with Canada will raise costs for New York families and small businesses who are already struggling to make ends meet,” said Sen. Kirsten Gillibrand, D-N.Y., in a statement Tuesday.
In late August, after the president’s 50% tariff on Canada, Gillibrand and Sen. Peter Welch, D-Vt., announced the Banning Antiquated Duties and Delivering Equitable American Levies (BAD DEAL) Act to repeal all tariffs levied under Section 338 of the Tariff Act. The BAD DEAL Act, expected to be introduced when senators return to Washington this month, would also refund Americans for duties paid under Section 338, according to Sens. Gillibrand and Welch.
“Congress must pass my legislation to end these reckless tariffs once and for all and refund Americans for duties they’ve already paid. It’s past time for President Trump to stop the chaos, get back to the negotiation table, and make a deal that lowers costs for American families,” Gillibrand said.
“For the individuals that are going to have products that are affected by the tariffs, it’s ‘Do you have the cash flow to go out and buy inventory and stockpile as this trade war wages on’,” said Jay Aldebert, chief growth officer at International Services Inc.
Aldebert helps small and medium-sized U.S. businesses navigate challenges, including tariffs.
“For me, it’s finding the area of reduction in cost that they can use to offset this. And that’s the biggest issue,” Aldebert said.
He says consumers could also benefit from acting sooner than later on larger purchases.
“Inventory right now of the tariff products itself is pre-tariff inventory till about mid-October and November and that’s when you’re really going to see the pain,” said Aldebert. “As a consumer, if you have some large purchase sitting on your kitchen table that you’re deciding, I would move that agenda up and obviously buy it earlier than later.”
The tit-for-tat escalation comes after trade negotiations collapsed in late August — with both sides blaming the other for the breakdown. No word yet on when or if the U.S. and Canada will return to the negotiating table.
Aldebert was born in Canada but has spent years living and working in the U.S. He said both sides need to strike a deal, and soon. Ultimately, he believes the political pressure will draw negotiators back to the table.
“It’s going to start creating political issues on both sides of the border. I think that is the pain that they will feel, in most cases, to drive them to a position to get back to the table and start negotiating,” said Aldebert.
Prime Minister Carney also said Canada is looking beyond the U.S., focusing on expanding its domestic economy and diversifying its trade partners.
