Summary
Canadian Prime Minister Justin Trudeau announced retaliatory tariffs after Donald Trump confirmed 25% tariffs on Canadian goods and 10% on energy, set to take effect at 12:01 a.m. Tuesday.
Trump justified the move by linking it to fentanyl smuggling concerns.
Trudeau called the tariffs “unjustified” and imposed 25% tariffs on $155 billion in U.S. goods, with $30 billion effective immediately and the rest in 21 days.
He warned of price hikes and job losses in the U.S., arguing the move violates Trump’s own trade agreement from his last term.
Higher import taxes (tariffs) on Canadian goods for Americans will increase the price, presumably reducing the amount of these goods that Americans will buy which hurts the Canadian producers. The only thing Canada can really do is hurt American producers in the same way, hence increase tariffs to reduce Canadian consumption of American goods and hurt American producers just as much (or preferably more). Hurting each other is a loss-loss strategy though, which explains why trade wars typically do not have winners only losers…