Through its website and daily newsletters, The Peak (a ZoomerMedia property) offers Canadians the news they need to understand business, tech, and other must-know stories.
In this dispatch, The Peak delves into the tariff war that Donald Trump initiated on Tuesday, followed by Zoomer‘s look at Prime Minister Justin Trudeau’s press conference outlining Canada’s response.
Tariff Time Has Arrived
After a month’s reprieve, Donald Trump’s punishment against Canada for trade deficits and perceived lax border security has arrived.
What happened: The 25 per cent U.S. tariffs on Canadian goods and 10 per cent tariffs on Canadian energy come into effect today. The feds are expected to respond with 25 per cent counter-tariffs affecting $30 billion worth of goods to start and $125 billion worth of goods three weeks later.
Why it matters: There are no two ways about it; the trade war will cause economic chaos, with a hit of up to 4.2 percentage points to Canada’s annual GDP on the table. The pain already began yesterday, with the loonie dropping below $0.69 and the TSX cratering after Trump said the tariffs were a go.
What’s next: The path to ending the trade war is murky, with Trump saying there’s “no room left” to negotiate. It seems that even after launching a $1.3 billion plan to strengthen border security and appointing a fentanyl czar, Canada still hasn’t done enough in his eyes.
- The head of the Canada Border Services Agency told the Globe and Mail it’s unclear what else the agency could do to change Trump’s mind.
Big picture: It might not be possible to meet Trump’s expectations, given his exaggerated view of fentanyl smuggling. The head of the RCMP says there’s no data showing mass quantities coming from Canada. Meanwhile, the White House’s stats are highly questionable. — Quinn Henderson
Canada’s Response
Prime Minister Justin Trudeau promised Canada wouldn’t “back down from a fight” after Donald Trump decided to impose tariffs on Canadian exports beginning Tuesday.
“Canadians are reasonable and we are polite, but we will not back down from a fight,” Trudeau said during a morning press conference that same day.
Following a 30-day pause, the United States proceeded with 25 per cent tariffs on Canadian exports and 10 per cent tariffs on Canadian energy. Canada immediately hit back with 25 per cent retaliatory tariffs on $30 billion worth of American products, with another $125 billion worth set to take affect in 21 days.
Trump’s decision to relaunch the trade war with Canada came after Trudeau’s attempt at addressing Trump’s concerns over border security – an issue the president claimed was driving his decision to impose tariffs on Canada. In an attempt to appease Trump, Trudeau’s government laid out a $1.3-billion border plan – which included appointing a fentanyl czar and deploying additional personnel, drones, surveillance equipment and helicopters.
Addressing President Trump directly, Trudeau said “this is a very dumb thing to do.” He added that, “We two friends fighting is exactly what our opponents around the world want to see.”
Throughout the somber press conference, Trudeau also stressed the importance of a united front.
“The most important thing is keeping Canadians united as we go through the pain that these American Tariffs will inflict,” he said.
Meanwhile, Canadians haven’t just been booing the U.S. national anthem at sporting events in response to the impending trade war. Many are fighting the good fight in the aisles of the grocery store, trading out the American staples on their shopping lists for homegrown brands.
As Trudeau’s rally cry no doubt pushes more Canucks to “Buy Canadian,” business and economics expert Melise Panetta looked at the potential challenges that face that movement, and how to overcome them. — Andrew Wright, EverythingZoomer.com
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