Canada Hits U.S. with $21B Tariffs After Trump’s Trade War Escalate/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Canada announced $21 billion in retaliatory tariffs on U.S. goods after Trump imposed universal steel and aluminum duties. Officials called Trump’s tariffs “unjustified”, warning they would raise prices for both Americans and Canadians. Global trade tensions escalate, with the EU and China also preparing retaliatory actions.
Canada-U.S. Trade War: Quick Looks
- Retaliatory Tariffs: Canada imposed $21 billion in new tariffs on U.S. imports in response to Trump’s steel and aluminum duties.
- Government Response: Canadian officials slammed U.S. trade policies, calling them “unfair and unreasonable.”
- Trump’s Threats: The U.S. president had warned tariffs could rise to 50% if Canada implemented an electricity surcharge on American consumers.
- Stock Market Impact: The Dow Jones turned negative, and U.S. automaker stocks fell amid tariff concerns.
- Global Trade War Risks: The EU and China are also preparing countermeasures, intensifying fears of economic slowdown.
- Trump’s Justification: The president claims tariffs are part of his strategy to “make America rich again.”
- Economic Concerns: Experts warn that tariffs could harm American manufacturers, as steel and aluminum costs rise.
- Uncertain Future: The Trump administration has yet to respond, but further retaliatory tariffs are expected.
Deep Look: Canada Retaliates with $21B Tariffs on U.S. Goods
Canada Responds to Trump’s Tariffs with Trade Retaliation
The U.S.-Canada trade conflict escalated Wednesday as Canada imposed $21 billion in retaliatory tariffs on American goods. This decision follows President Donald Trump’s move to enforce universal steel and aluminum tariffs, a policy that has triggered backlash from allied nations.
During a press conference, Canada’s Minister of Innovation, Science, and Industry François-Philippe Champagne called Trump’s tariffs “completely unjustified, unfair, and unreasonable.” He warned that these trade measures would increase costs for consumers in both countries and disrupt long-standing economic ties.
“The U.S. administration is once again inserting disruption and disorder into an incredibly successful trading partnership,” Champagne stated.
Trump’s Tariffs: The Spark for Canada’s Response
Trump’s latest tariffs place a 25% duty on all imported steel and aluminum, including from Canada, the largest supplier of these materials to the U.S. Experts warn that these costs will likely be passed on to American consumers, affecting industries like:
- Automobiles (Ford and GM stocks already declined)
- Appliances and machinery
- Construction materials
Despite a brief trade detente on Tuesday, where Canada and the U.S. agreed to suspend a 25% surcharge on American electricity consumers, tensions flared again when Trump threatened to double tariffs to 50% if Ontario introduced the surcharge.
Stock Market Reaction: Wall Street Turns Negative
Markets reacted swiftly to the trade war escalation:
- The Dow Jones Industrial Average fell into negative territory.
- Shares of Ford and General Motors declined, as auto companies faced rising material costs.
- Investors worried about a potential economic slowdown due to global trade instability.
Barclays analysts noted that previous steel and aluminum tariffs under Trump had weakened profitability for major U.S. manufacturers— a trend that could repeat in 2025.
Global Trade War: The EU and China Prepare Retaliation
Canada’s move follows the European Union’s recent announcement of $28 billion in tariffs on U.S. goods, targeting:
- Beef
- Motorcycles
- Whiskey
- American-made steel and aluminum
Meanwhile, China signaled it is also readying a response, raising fears of a widening global trade war. If tensions escalate, economic growth worldwide could slow significantly.
Trump’s Shifting Trade Justifications
Trump has presented varied explanations for his trade policies.
- He initially argued that foreign nations were taking advantage of the U.S., citing America’s trade deficit.
- He later suggested tariffs would create jobs, despite economists warning they could eliminate as many jobs as they create by increasing production costs.
- More recently, Trump stated: “This is the beginning of making America rich again.”
However, U.S. exports and imports have both hit record highs, contradicting his claim that foreign economies are harming American industry.
What’s Next? More Tariffs and Economic Uncertainty
The Trump administration has not yet formally responded to Canada’s retaliatory measures. However, U.S. officials previously signaled that “any country imposing countermeasures will face further trade penalties.”
Key questions remain:
- Will Trump escalate tariffs beyond 50%?
- How will U.S. businesses and consumers absorb rising costs?
- Will the trade war spread further, affecting additional industries?
With tensions mounting and major economies retaliating, the global economic outlook remains uncertain as the U.S. and its allies navigate an intensifying trade war.
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