Canada is preparing to announce its answer to US President Donald Trump's latest wave of tariffs on Tuesday, as a trade war intensifies between the historically close allies
The new measures aim to support workers and businesses during “challenging times”, Canada’s government said late Monday, with officials to hold a press briefing to detail Ottawa’s response on Tuesday morning local time.
A war of words has been taking place since trade negotiations between the nations collapsed at the eleventh hour last Friday.
Highlighting the animosity, President Donald Trump on Tuesday said he was considering renaming Lake Ontario as “Lake America”, as he did last year with the Gulf of Mexico.
The new 50% duties that took effect on Saturday impact $20 billion worth of goods, or about 5.5% of Canadian exports to the United States, economists estimate.
Canadian Prime Minister Mark Carney said retaliatory tariffs would be effective Sept 8, as analysts warn of tit-for-tat escalation.
On Monday, Trump additionally pledged to double tariffs on Canadian autos starting next year, up to 50% from the current 25% for non-US content.
Ontario Premier Doug Ford criticised Trump’s tariff threat on autos, saying he could “kiss my ass” and threatening an electricity export surcharge.
In an earlier phase of the dispute, Ontario imposed a temporary 25% surcharge on electricity exports to three US states.
Trump has since lashed out at Ford online, warning of “far worse” consequences.
He also referred to the Canadian prime minister as a “governor”, re-upping his inflammatory push for Canada to become the 51st US state.
The latest tariffs Trump imposed will raise the US effective tariff rate on Canadian exports to 6.9% from 5.1%, Oxford Economics estimates.
Tariffs on plastics, electrical machinery, and wood and paper products contribute the most to the increase.
“Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.
Threats to culture
Over the weekend, Carney said US negotiators had sought restrictions on Canadian trade deals with other countries at the last minute.
US officials made unacceptable “threats” to the French language and “Quebec culture” too, he added, referring to eastern Canada’s French-speaking province.
But Trump pushed back early Tuesday, saying on his Truth Social platform that he would “never interfere with Canadians speaking French!”
“This lie was made up by a weak and ineffective Prime Minister in an attempt to gain political support,” Trump charged.
The United States is by far Canada’s biggest trading partner, with Canadian exports to its neighbor representing 70% of its overall total.
Canada is the United States’ second biggest trading partner in goods this year, behind Mexico, government data showed.
Polling released Sunday by the Angus Reid Institute showed Canadian broadly support Carney’s move to walk away from talks, but some have fear of economic repercussions.
The White House had alleged “discriminatory treatment” by Canada against US alcohol, automobile and dairy products in rolling out the 50% tariffs.
Trump had delayed their implementation, but both sides failed to reach an agreement after talks went down to the wire.
Besides the tariffs fight, Washington and Ottawa have to agree on revisions to the US-Mexico-Canada free trade agreement (USMCA) which Trump has declined to renew in its current form.
