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Tariffs escalate, Canada retaliates
Canada moved to announce retaliatory tariffs against the United States as relations deteriorated, with President Donald Trump telling Canadian leaders to “fall in line” or face consequences worse than existing tariffs.
“Canada will announce retaliatory tariffs against the United States on Tuesday”
The dispute followed Trump’s weekend move imposing 50 per cent tariffs on about $28 billion worth of Canadian products after trade talks collapsed, and Canada’s federal government announced retaliatory tariffs dollar-for-dollar on American goods set to take affect Sept. 8.
Canada’s retaliation includes upping tariffs on American steel and aluminum products from 25 to 50 per cent and imposing other levies on clothing, appliances, dairy products and more, while the tariffs are also described as taking effect Sept. 8 at rates of 15%, 25% and 50%.
BMO CEO Darryl White said on the bank’s third-quarter earnings call Tuesday that the Canada-U.S. relationship is “going through a period of adjustment,” and he framed the uncertainty as a headwind for trade-related sectors and domestic affordability more broadly.
BMO reported a third-quarter profit of $1.75 billion, down from $2.33 billion a year earlier, as it took a charge related to the sale of its transportation and vendor finance businesses.
Carney, Trump trade barbs
Prime Minister Mark Carney accused Washington of trying to subordinate Canada and said U.S. trade demands showed Washington wanted to “destroy our major industries,” including autos, steel and aluminum.
Carney also said earlier Monday that Canada may need to move away from matching U.S. tariffs dollar for dollar and instead use more targeted retaliation aimed at protecting Canadian workers and businesses, while Trump threatened new 50% tariffs on Canadian vehicles, auto parts and steel.
In a Tuesday statement, U.S. Sen. Amy Klobuchar said the tariffs are raising costs and increasing uncertainty for families, farmers, workers and small businesses, and she said “Canada is Minnesota’s top trading partner and our economies and communities are deeply connected.”
Trump’s rhetoric also included a proposal to rename Lake Ontario to “Lake America,” writing on Truth Social that “The United States is giving serious consideration to changing the name of Lake Ontario to Lake America.”
Ontario Premier Doug Ford told the Associated Press on Monday that Trump has underestimated Canadians’ willingness to endure economic pain rather than give in to US pressure, saying “He underestimates Canada. We’re all in.”
Support, stakes, and what’s next
Canada’s counter-tariffs were paired with aid measures, including Ottawa announcing aid measures amounting to 7.5 billion dollars to help workers and businesses weather the storm.
“aid measures amounting to 7.5 billion dollars”
Radio-Canada reported that the affected American goods targeted by Canadian countermeasures are valued at 27.6 billion dollars, with counter-tariffs of 50%, 25%, or 15% depending on the product, and it said the list includes categories such as steel, iron and aluminum; dairy products; and clothing and beauty products.
The Le Devoir account described Ottawa’s approach as proportionate, targeted, and strategic, quoting Finance Minister François-Philippe Champagne saying “Canada’s counter-tariffs are first designed to protect industries harmed by American tariffs.”
Ontario warned it could escalate beyond tariffs, with Ford threatening to cut off electricity and critical minerals to Washington if the dispute worsens, saying “I’ll cut them off,” and “You won’t get a grain of sand out of Ontario.”
BMO’s Darryl White said the bank is working with its clients on issues ranging from liquidity to supply chain adjustments to diversifying markets, adding that “there may be some opportunities in the challenge we’ve got in front of us.”