A trade war between Canada and the United States has escalated this week. This year, President Donald Trump has imposed tariffs on Canada and has also commented on Canada becoming the 51st state. Canada has responded to all U.S. actions with tariffs of their own.
Trump utilized a Great Depression Law to impose 50% tariffs on approximately 5% of Canadian imports. Canada responded with tariffs of 15%, 25% or 50%, matching $20 billion in U.S. imports, on Tuesday, Sept. 29.
On Tuesday, the White House banned a list of Canadian imports, including dairy products and motorcycles, effective 12:01 a.m. EST. However, Patrick Childress, a former U.S. trade official, told AP News Tuesday that the economic impact will likely be minimal. Additionally, Canada and the U.S. have had clashes in the past regarding dairy products, as Canada imposes tariffs once dairy imports have exceeded a quota.
It is possible that Canada will respond to the bans with another escalation within the trade war. There is some concern over how this will impact efforts to renew the U.S.-Mexico-Canada Agreement, a North American trade agreement Trump introduced in his first term. The deal had allowed many goods to cross North American borders duty-free.
The Canadian Prime Minister, Mark Carney, has made promises to “stand up to Trump” and to make Canada more independent. “It’s about ensuring that no country can hold us hostage. And that we can live how we want to live,” Carney said.
