In a significant escalation of trade tensions, Canada announced on Sunday that it will impose 25 percent tariffs on U.S. goods worth C$30 billion. This move marks the first phase of Canada's retaliation against U.S. President Donald Trump's tariffs on Canadian imports.
The retaliatory tariffs target a wide range of American products, including orange juice, peanut butter, wine, coffee, appliances, cosmetics, and paper products, according to a statement from Canadian Finance Minister Dominic LeBlanc. These tariffs are set to take effect on February 4, aligning with the implementation date of the U.S. tariffs on Canadian products.
Beyond the initial measures, Canada plans to levy tariffs on a second set of U.S. imports valued at C$125 billion. This forthcoming list, expected to be released in the coming days, will encompass passenger cars, trucks, buses, steel and aluminum products, select fruits and vegetables, aerospace products, beef, pork, and dairy items. A 21-day public consultation period will precede the enforcement of tariffs on this second list, offering stakeholders an opportunity to provide input.
The decision follows Prime Minister Justin Trudeau's vow of retaliation after President Trump's announcement that he would impose 25 percent tariffs on most Canadian products and 10 percent on Canadian energy products, also commencing on February 4.
\"We will not stand by while our economy and our workers are threatened,\" Trudeau stated. \"Canada will defend its interests and the livelihoods of its people.\"
Trudeau indicated that additional non-tariff trade actions are under consideration. Potential measures include restrictions on the export of critical minerals and energy products to the United States, as well as barring U.S. companies from bidding on Canadian government contracts.
The escalating trade dispute has raised concerns among industry leaders and economists. The Canadian Chamber of Commerce warned that the mutual imposition of tariffs could lead to a 2.6 percent decline in Canada's real GDP, costing households an average of C$1,900 annually. The U.S. economy is also projected to feel the impact, with an estimated 1.6 percent drop in GDP and an average cost of $1,300 per household.
As North American trade relations become increasingly strained, businesses and consumers on both sides of the border are bracing for potential disruptions. Key sectors, including automotive, agriculture, and manufacturing, may face significant challenges in the coming months.
Experts suggest that prolonged trade tensions could have wider implications for global markets and supply chains, particularly in Asia. Investors and market analysts are closely monitoring the situation for signs of further escalation or resolution.
The Canadian government has emphasized its willingness to engage in dialogue with the United States to resolve the dispute. However, officials have made it clear that Canada is prepared to take necessary measures to protect its economic interests.
Reference(s):
cgtn.com
