Bessent Downplays Trade War Impact, Claims 0.02% Inflation Hike

US Treasury Secretary Scott Bessent has downplayed the impact of a potential trade war with Canada, estimating that it would raise US inflation by just 0.02%. The spat between the two countries centers on tariffs imposed by the US on $20 billion worth of Canadian imports starting August 22, 2026, including dairy, wine, and cement.

The move was met with retaliatory measures from Canada, which announced tariffs targeting US steel, dairy, and electronics. Bessent argued that the Canadian economy is '13 times smaller' than the US economy, implying that the impact would be minimal.

However, critics argue that Bessent's figure may not accurately reflect the real-world effects of the tariffs. They point out that certain industries, such as cement manufacturers in the Northeast, could face significant costs due to the new duties.