Canada braces for prolonged trade war as counter-tariffs on US take effect

Canada has implemented retaliatory tariffs on numerous US goods, totaling nearly C$28 billion, effective on Tuesday. These tariffs, which may reach up to 50%, include items such as steel, furniture, and cotton T-shirts. The list also covers fresh fish and lobster, though the latter was later removed due to opposition from the seafood industry.

Prime Minister Mark Carney reiterated Canada's desire for a long-lasting and mutually beneficial trade agreement with the US, but acknowledged that progress has stalled since talks ended in late August. US Trade Representative Jamieson Greer accused Canada of rejecting an "excellent deal" and warned of potential US retaliation, including banning Canadian product imports.

Meanwhile, US President Donald Trump threatened to halt all US business with Canada unless Bombardier, a major Canadian aerospace company, relocated its manufacturing to the US. Despite Canada's economy showing resilience, with a 3.3% GDP growth in the second quarter and 181,000 new jobs added from April to July, the recent trade tensions have led to job losses.

The Canadian Chamber of Commerce advised the government to adopt a targeted approach to retaliation, emphasizing the need to prevent prolonged escalation.