By Barnaby "Bottom-Line" Coyne
At one minute past midnight Tuesday, Canada's counter-tariffs on American goods took effect — duties covering $27.6 billion worth of U.S. products, according to figures reported by CNBC, with the Canadian government's own accounting putting the figure at $20 billion, per the BBC. Either way, it's real money, and it lands on real invoices: duties on U.S. steel and aluminum have doubled to 50%.
The move answers President Trump's Aug. 22 decision to slap a 50% tariff on Canadian goods, according to the Washington Examiner. Neither side has blinked since.
Now the fight has a new front. Trump has threatened to block the sale of Canadian-built Bombardier jets in the United States, the BBC reports — a shot at one of Canada's largest companies and a reminder that trade wars don't stay contained to the goods that started them. Bombardier builds business jets sold worldwide, including to American buyers; a U.S. sales ban would cut into a market it can't easily replace.
The diplomatic temperature isn't helping, either. Iran's foreign ministry this week criticized Canada for backing U.S. actions in the Strait of Hormuz, CNBC reports, after Ottawa condemned what it called Iran's "destabilizing actions." Canada is managing friction on two fronts at once — with its superpower neighbor and in the Middle East.
What we don't yet know: how long either government can sustain tariffs this size without feeling it at home. Steel and aluminum workers on both sides of the border will feel the 50% duties first — in order books, in shift schedules, in the price of the next contract. The U.S.-Canada trading relationship is the largest bilateral one in the world. That's not a line for economists. That's a lot of paychecks.
Somebody's paying for this. Let's find out who.
— Compiled from reporting by CNBC, the BBC and the Washington Examiner.
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