If Trump imposes 50 per cent tariffs, should Canada hit back? Trade analysts disagree

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“I’m confident that the Carney team has made this known to the U.S. side,” he said, reiterating that a list of counter-tariffs would have been a good idea.

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Manak suggested targeting agricultural products in electoral swing states, as well as auto production and inputs in Michigan. She also highlighted historically politically sensitive goods like Florida orange juice and Harley-Davidson motorcycles. 

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Counter-tariffs, however, may not prove that fruitful, according to Jamie Tronnes, executive director of the Center for North American Prosperity and Security.

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“I think the retaliatory strategies that Ottawa is probably considering would be ones that would not necessarily move the needle too much.”

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But retaliation or countermeasures, she said, should not be treated as a binary choice. In other words, Ottawa’s response would not necessarily be limited to matching U.S. tariffs, Tronnes said, but declined to identify possible measures, saying Canada had “a lot of different options” and that discussing unconfirmed steps could move markets.

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The analysts differ not only over what Canada should retaliate against, but over whether retaliation would strengthen Ottawa’s hand or simply deepen the damage.

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Richard Stern, of the Plymouth Institute for Free Enterprise at Washington-based Advancing American Freedom, sees any retaliation as a repeat of Trump’s economic mistake: tariffs hurt consumers in the imposing country. 

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“When Canada responds by imposing their own tariffs or their own increased quotas, they’re just doing the same thing Trump is doing,” he said. “They’re just hurting Canadians and Americans.”

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“It would be one thing if that harm was done only to the other side, but it’s going to be done to Canadians.”

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Stern thinks even creating a list of potential counter-tariff targets could help the U.S. administration build a stronger protectionist case.

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“If the conversation is, ‘Look at Canada threatening American companies,’ you will actually make the case for the isolationist pro-tariff crowd,” he warned.

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He doesn’t see a target list helping build pressure or momentum to push back against the tariffs in the United States.

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“It’s cleaner … to be an American company that’s saying, ‘We’re being harmed by our own government,’” he said, and noted that even that pressure hasn’t worked.

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“There’s already a lot of industries that are being harmed by Trump’s policies, and they’re already mounting a lot of pressure, and that hasn’t done anything.”

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Ed Fast, Canada’s former minister for international trade under PM Stephen Harper, also cautioned against retaliation. He urged Canadian negotiators to keep the economic asymmetry between the two countries front of mind.

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“If we retaliate with tariffs, as some have suggested, the Americans are much better able to absorb that retaliation than we are to absorb their tariffs against us.”

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“As more and more tariffs get levied, the more difficult it becomes for Canada.”

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Stern, for one, questions whether the administration followed the required process for finding discrimination under Section 338, but the measure is untested, and courts have historically given presidents a wide berth on tariff statutes.

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Canada could also pursue a dispute settlement through CUSMA’s Chapter 31, but that too would take time, and it might mean little to the Trump administration.

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“In theory, you can go through the dispute panel. In theory, you can go through the courts,” said Stern.

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But neither route, he said, would force the Trump administration to comply with a ruling in the near term.

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National Post

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