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WASHINGTON — Canada retaliated against the United States in an intensifying trade war Tuesday by announcing steep new tariffs on roughly $20 billion worth of American goods at the core of the U.S. economy, a sharp escalation between the neighboring allies after trade negotiations between them abruptly collapsed.
The new duties will hit a variety of American products with tariffs as high as 50%, including steel, dairy products, appliances and farm equipment, and will target items on routine shopping lists, like seafood, cheese, clothing, cosmetics and toilet paper.
Ottawa’s moves come after President Trump announced 50% tariffs on Canadian goods, warning Canada to “fall in line” in trade negotiations that Canada’s prime minister, Mark Carney, characterized as an attempt to subjugate his country.
“We did not choose this conflict, but when our economic integration is used as a weapon rather than the foundation for a win-win partnership, we need to stand up,” Finance Minister Francois-Philippe Champagne said in a statement announcing the new measures.
The White House, in a statement, said Canada “has been ripping off the United States for decades,” and that Trump “is done letting them get away with it.” And the president has threatened to escalate even further by targeting Canadian vehicles, auto parts and steel, even warning his administration could begin referring to Lake Ontario — one of the five great lakes bordering Canada and New York — as “Lake America.”
After trade negotiations collapsed, President Trump’s 50% tariffs on scores of Canadian imports kicked in over the weekend. A look at what that means.
Few nations have hit back as aggressively as Canada in response to Trump’s unwieldy tariff policies, with the exception of China, which engaged the administration in a brief but tense trade war that roiled global markets.
The ramifications may be just as significant, said Mary Lovely, a senior fellow at the Peterson Institute for International Economics.
“Last year, we bought more from Canada than we did from China,” Lovely said. “A trade war with Canada is a big deal. If we remove energy trade, we run a healthy trade surplus with Canada, benefiting U.S. producers in the Northern tier of states but all throughout the country.”
Ottawa’s retaliation might be felt most acutely in border states set to hold midterm elections that could swing control of the U.S. Senate in just a matter of months — a potential calculus of Carney’s government, which could use its leverage to deliver political pain for the president’s party.
“Ohio and Michigan — which both feature close Senate races — will suffer from reduced trade in autos and auto parts,” said Kimberly Clausing, a professor of tax law and policy at the UCLA School of Law. “Two other states, Alaska and Maine, feature both close Senate races and long-standing close relations across the border.”
Canada’s leadership has indicated for months a willingness to fight against perceived bullying by the United States.
In a speech delivered in January from the World Economic Forum in Davos, Switzerland, Carney caught the world’s attention when he said the postwar economic order dominated by the United States had reached its end, warning that Canada and similar middle powers “cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.”
