The US has just warned that from next month it will hike tariffs on cars, trucks and parts that come from Canada, pushing the rate from 25% to a shocking 50%. This move follows a failed trade summit that saw both sides slam each other with last‑minute demands.
Canadian officials have announced a counter‑strike, promising reciprocal tariffs on US goods from 8 September. They also plan to fund new icebreakers and other projects to lessen Canada’s reliance on the US market.
Industry is already feeling the bite. In Oregon, a local designer predicts a 50% rise in the price of a prized Canadian pillow. Mark Carney, Canada’s finance minister, says the country will fight back “dollar for dollar”.
The North American trade deal, the USMCA, may be thrown into doubt if tensions continue. Experts say a collapse could send Canada into recession and lock it into a stagnant growth path.
Quick facts: Canada sends 60% of US crude oil imports and almost all US natural gas exports. The US and Mexico have also asked to extend the USMCA for another 16 years, but Washington remains skeptical.
Stay tuned for more on how this tariff war could reshape trade for the young generation and tech startups.
