Canada’s hefty new counter-tariffs on U.S. goods came into effect early Tuesday morning, pushing the ongoing trade war with the United States into uncharted territory. Talks broke down late last month, and Ottawa and Washington have been blaming each other ever since. So, what happens next? How much pressure is on Prime Minister Mark Carney, and what, if anything, will get President Donald Trump back to the negotiating table? We put these questions to four of POLITICO’s reporters who have most closely followed the twists and turns of this saga: Zi-Ann Lum, a Canadian trade reporter; Nick Taylor-Vaisey, our Ottawa bureau chief; Oliver Ward, a U.S. trade reporter; and Megan Messerly, who covers the White House. We’re not any closer to ending the trade war, but we have as good a grasp as we can of where it stands — and why neither country’s leader chickened out with this round of tariffs. This conversation has been edited for length and clarity. Carney did not TACO. Zi, where are we now? Zi-Ann Lum: We're bracing for hard times here in Canada. We're hearing from Carney, who released a polished explainer-style video today, tell Canadians (again) that this isn't the first time the United States has tried weaponizing Canada's tariffs to "break" Canada — and it won't be the last. So that sets expectations the Canadian countertariffs that came into force today may provoke more retaliatory actions stateside. Carney's “Expect Hard Times” message to the Canadian public suggests they should expect more money in his government's upcoming budget to go to sectors and businesses that will be hardest hit in this trade war escalation. I'll add that Trump targeting the Canadian dollar over the weekend was particularly interesting because that signals how serious the administration is in snatching Canada's share of the North American auto industry. One compelling reason to build in Canada is that it can be cheaper for labor costs when you pay workers on the Canadian dollar vs. U.S. dollar, so seeing Trump zero in on that raises the question: What's Trump going to do about it? Trump also did not “chicken out.” Megan, why didn’t he back down? How willing is the White House to absorb the political and economic risks of escalation? Megan Messerly: The administration genuinely believes this bubbling trade war will hurt Canada more than it hurts the U.S. — even with some of Canada's… [TheTopNews] Read More.
3 weeks ago
