Trump's Trade War Targets Canada, Citing Decades-Long Alleged Cheating
The United States and Canada are locked in a trade dispute that has escalated since their latest talks collapsed on August 21. President Donald Trump claims that America's northern neighbor is 'ripped off for 50 years' by cheating the US and strangling its industries.
The president has imposed tariffs of 50% on $20 billion worth of Canadian products to protest what he describes as discrimination against U.S. auto, dairy, and alcoholic beverage exports. Canada retaliated with tariffs of its own, prompting Trump to ban imports of certain Canadian products, including dairy byproducts and most alcoholic beverages.
The US runs a trade deficit with Canada, but this can be attributed mainly to the country's reliance on Alberta's oil. American refineries need heavy sour crude oil from Alberta, which is not compatible with other types of crude oil. The Canadian oil sells at a discount to the benchmark U.S. crude oil.
Despite its open economy, Canada protects several domestic industries, including its dairy industry. The US has complained about unfair subsidies for Canadian softwood lumber producers and the system Canada set up to protect its dairy industry, which imposes tariffs of over 200% on most dairy products once they've exceeded a quota.