US Imposes 50% Tariffs on Canada, Reigniting Trade War

The US and Canada have reignited their trade war, with President Donald Trump's administration imposing 50% tariffs on various Canadian items, including alcohol, hockey equipment, and plywood.

Canadian Prime Minister Mark Carney has responded by announcing a dollar-for-dollar counter-tariff, marking another tense moment in the two countries' relations.

The tariffs will disproportionately affect certain sectors of the economy, such as paper and paper products, which accounted for $3.3 billion of Canada's $382 billion in goods imported to the US last year.

Debbie Safran, owner of Houndstooth Pet Boutique in Vermont, expressed concern about a shipment of dog winter coats made by a Canadian woman-owned business that she will now be forced to pay a 50% tariff on.

The tariffs may contribute to ongoing inflation concerns, which have already seen prices rise due to supply shocks and previous rounds of Trump's tariffs. The Federal Reserve is expected to hike interest rates at least once in 2026, according to its economic projections.