With Canadian counter-tariffs set to come into effect just after midnight on Tuesday, Canada and the U.S. could be entering the “most important” week yet in their ongoing trade dispute.
“I would predict that this week is perhaps about the most important in the entire 18-month trade war that we’ve seen with the United States, because you have the potential for further escalation,” Lachlan Wolfer, national leader of KPMG law in Canada, told CTV News Channel on Monday.
“And so the real question here is, are we going to see tit-for-tar retaliation continue, and where does that end up?”
Trade talks between Ottawa and Washington broke down on Aug. 21, resulting in 50 per cent U.S. tariffs on billions worth of Canadian products. As a response, Ottawa announced dollar-for-dollar counter-tariffs on about 700 American imports worth $27.6 billion, which come into effect at 12:01 a.m. Eastern on Tuesday.
Wolfer describes Canada’s counter-tariffs as “very specifically targeted” to insulate Canadian consumers while influencing voters in the November U.S. midterm elections.
“[Canada is] trying to impact particular states in the United States that are coming up for elections in swing states and Republican-dominated states,” Wolfer explained. “They’re also designed to ensure that Canadians can substitute American goods for other goods, rather than economically having to bear the imposition of those tariffs.”
It remains to be seen if Canadian counter-tariffs will bring American officials back to the negotiating table or if they will lead to further U.S. escalation and retaliation, which could target Canadian alcohol, dairy and steel exports.
“The big one is potentially the ban on steel exports from Canada, which would be much more impactful, that’s about seven to eight billion dollars worth of product per year,” Wolfer said. In a Labour Day message, Prime Minister Mark Carney described U.S. tariffs as “unjustified and unprovoked.”
“Canada is growing stronger and less dependent on any single partner,” Carney said on Monday. “We are already giving ourselves far more than anyone can take away.”
Trump targets Canada on Truth Social
Amid the trade spat, U.S. President Donald Trump made a flurry of social media posts over the Labour Day long weekend targeting Canada. They included a Truth Social post on Monday showing a map covered entirely by a U.S. flag and the words “United States of America.” In the image, the U.S. map blankets Canada, Mexico, the Caribbean, Central America, Iceland and Greenland.
Trump also turned to Truth Social on Monday to declare, “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”
Lori Turnbull, a professor in Dalhousie University’s management faculty and political science department, says Trump’s social media trolling could ultimately backfire and influence U.S. voters.
“This is not how you conduct a trade relationship or any relationship,” Turnbull told CTV News Channel on Monday. “It makes him look unpresidential, it makes him look immature, and so let him do it. Because maybe that’s going to actually get into the minds of people who are thinking about voting for him.”
