Canada-US Trade Relationship Hits Brink of Full-Scale War

Canada's trade relationship with the United States has undergone a fundamental shift due to the collapse of trade talks. Prime Minister Mark Carney acknowledged that 'America has changed' and stated Canada would not return to its old relationship with the US.

The US imposed 50% tariffs on approximately $20 billion worth of Canadian goods, prompting Canada to retaliate dollar for dollar starting September 8. The targeted sectors include steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Royal Bank of Canada economists estimate that the tariffs directly affect about 0.4% of Canada's GDP, but the damage could grow if retaliation broadens or more sectors are targeted.