Canada’s retaliatory tariffs on U.S. goods went into effect on Sunday, July 1, the same day the country celebrates its national holiday. Canada imposed a 25% tariff on metal products and a 10% tariff on over 250 other goods, such as coffee and whiskeys, according to the BBC. The total import duties target $12.6 billion worth of U.S. products.
“We will not escalate and we will not back down,” Canadian Foreign Minister Chrystia Freeland said. Freeland described the tariffs as “the strongest trade action Canada has taken in the post-war era,” NBC News reported. The duties come as a response to Donald Trump’s ongoing trade war with foreign nations and allies. The White House said last month that it would add a 25% import tariff on Canadian steel, and a 10% tariff on aluminum. Trump also recently threatened to impose more tariffs on imported vehicles and auto parts from Canada, and said the move is based on “national security.”
Some of the U.S. products Canada chose to impose its tariffs on carry political, rather than economic, weight. According to NBC News, the 10% duty on yogurt, which the country imports mostly from one plant in Wisconsin, is a jab at House Speaker Paul Ryan, who’s from there. Similarly, the duty on whiskey was imposed because it’s mostly imported from Kentucky, Republican Senate leader Mitch McConnell’s home state, and Tennessee.
A recent report from the Trade Partnership Worldwide, LLC shows that Trump’s tariff war with Canada could cost the U.S. 400,000 jobs due to the higher costs of steel and aluminum. Canadians, angered by Trump’s actions, have also made calls for a boycott of U.S. goods, according to the New York Times.
Similarly, since the U.S. imports $31 billion worth of steel and aluminum products from Canada each year, the tariffs will likely hurt consumers who will end up paying more for products that contain steel, Forbes reported.
“Candidly, the Canadian retaliation is a drop in the bucket compared to the retaliation that we’re going to see from China and elsewhere,” Dan Ujczo, a trade lawyer in Columbus, Ohio told NBC News.
But others are concerned about what these actions could mean for trade. “We run the risk of going back to power-based trade rather than rules-based trade,” said Clifford Sosnow, a trade lawyer in Ottawa, according to the Times. “With power-based trade, smaller economies like Canada will hurt.”