New Tariffs Deepen US-Canada Trade Fight, Raising Recession Worries
A serious trade dispute is growing between the United States and Canada. Experts say this conflict could cause Canada to lose many jobs. It also raises fears of a recession in Canada’s economy.
Last Saturday, the US placed new taxes, called tariffs, on $20 billion worth of Canadian goods. These tariffs are 50 percent. This happened after trade talks between the two countries failed. On Monday, US President Donald Trump threatened more tariffs. He said all Canadian car products could face a 50 percent tariff from January 1.
On Tuesday, Canadian Prime Minister Mark Carney announced Canada’s response. Canada will impose its own tariffs on over 700 US products. These goods are also worth $20 billion. These Canadian tariffs will start on September 8.
Experts believe Canada’s economy will suffer more than the US economy. Canada is much smaller, about one-tenth the size of the US economy. Also, Canada sends nearly 70 percent of its exports to the US. This makes Canada very sensitive to US trade actions.
Ashley Kalyn, a trade consultant, said Canada could lose up to 100,000 jobs. Some businesses are already planning to close factories. They might also lay off workers if the tariffs continue. Oxford Economics, an advisory firm, expects US tariffs to reduce Canada’s economic growth next year by 0.3 percent.
Certain Canadian regions will be hurt more. These include Quebec, New Brunswick, and Ontario. Exporters in British Columbia will also be affected. They sell a lot of cement, paper, wood, and other goods to the US.
The future of the USMCA trade agreement is also a concern. This agreement helps protect most Canadian exports from tariffs. If USMCA ends, Canada’s economy could fall into a deep recession. The overall average tariff rate on Canadian goods would rise significantly.
US President Donald Trump recently increased tensions further. He announced the US government would rename Lake Ontario to “Lake America.” Prime Minister Mark Carney said “Ontario” is an Indigenous name. He noted it is older than both Canada and the United States.
Inside Canada, leaders are divided on how to react. Ontario Premier Doug Ford wants strong action. He suggested cutting off electricity to the US. Other provinces, like Alberta, are against such harsh steps. They do not want to tax natural resources like oil.
Vina Nadjibulla, an expert from Canada, said the world is watching. She believes how Canada handles this situation is important for other countries too. She said September 8 is a key date to watch. That is when Canada’s own tariffs begin.
The situation remains uncertain. Both sides hope for new talks to end the trade conflict.
