Canada Matches US Tariffs in Escalating Trade War

Canada's Prime Minister Mark Carney has announced that his country will match US tariffs 'dollar for dollar' in response to Washington's 50% duties on $20 billion worth of Canadian goods. This decision comes after three days of negotiations between Canada and the US ended without a deal.

The US tariffs, which took effect on September 8, target various sectors including steel, dairy, electronics, household appliances, agricultural machinery, and pulp and paper. Canada's counter-tariffs will also include products already subject to unjustified US tariffs under Sections 232 and 338 of American trade law.

Carney acknowledged the risks associated with retaliation but said his government believed it was in Canada's national interest. The move has raised concerns about a wider trade war between the two neighbors, which could permanently reshape their decades-old economic relationship.

Royal Bank of Canada economists estimate that the latest US tariffs directly affect around 0.4% of Canada's GDP and employment due to the limited share of its exports covered by the duties.