Canada Escalates Trade War With US     09/08 06:25

   Canada struck back at U.S. President Donald Trump on Tuesday with tariffs on 
about $20 billion worth of U.S. goods, in response to the latest round of 
tariffs on Canada.

   TORONTO (AP) -- Canada struck back at U.S. President Donald Trump on Tuesday 
with tariffs on about $20 billion worth of U.S. goods, in response to the 
latest round of tariffs on Canada.

   The outcome could resonate far beyond Canada, showing other governments 
whether a smaller U.S. ally can withstand Trump's economic pressure.

   Canadian Prime Minister Mark Carney says U.S. demands could hollow out key 
Canadian industries and limit the country's independence, while Trump's threats 
to Canadian sovereignty have rallied the public behind him.

   "Carney and Canada have become symbolic of resistance to him," Canadian 
historian Robert Bothwell said. "And what he'll want to do is make an example 
of Carney and Canada and theoretically terrify everybody else while in fact 
showing them that they need to remove themselves even further from the United 
States."

   The tariffs hit hundreds of American products, including steel, aluminum, 
cheese, appliances, clothing, cosmetics and farm equipment, at rates of 15%, 
25% or 50%.

   Here's what to know.

   Canada retaliates with tariffs on hundreds of US products

   Canada says its tariffs match Washington's dollar for dollar and rate for 
rate. They take effect at 12:01 a.m. Tuesday under an executive action known as 
an order in council and cover about $20 billion in American goods, roughly 6% 
of the $333.6 billion the United States exported to Canada last year.

   RBC Economics, the research arm of the Royal Bank of Canada, said the 
measures were unlikely to dent U.S. growth overall but could hit some 
businesses hard.

   Canada has already gone beyond tariffs in other ways. Eight of its 10 
provinces continue to restrict or ban sales of U.S. alcohol. The Distilled 
Spirits Council says U.S. spirits exports to Canada fell more than 70% year 
over year after those restrictions took effect.

   Trump threatens to punish Canada even further

   Since Canada-U.S. trade talks collapsed Aug. 21, Trump and his 
administration have unleashed a barrage of tariffs, threats and personal 
attacks portraying Canada as weak and dependent.

   On Monday, Trump threatened to ban the sale of aircraft from Canada's 
Bombardier, unless they manufacture planes in the United States.

   "NO MORE SELLING BOMBARDIER IN THE UNITED STATES! Their products aren't good 
enough!" Trump posted on Truth Social. "If they want our Market, they must 
build here, and stop treating America like a 'piggybank.'"

   Flavio Volpe, president of APMA Canada, a manufacturing trade group, 
responded on X that Bombardier uses U.S.-made GE and Honeywell jet engines and 
employs about 3,000 U.S. workers.

   Trump previously warned that Canada's economy could collapse if Carney 
continued treating him as "the enemy" and threatened consequences "worse than 
anything that has ever happened to a Canadian Politician."

   U.S. Trade Representative Jamieson Greer has threatened that Washington 
could ban some Canadian goods outright in response.

   Trump even renamed Lake Ontario "Lake America," a change ignored and 
ridiculed in Canada. Google and Apple bent to Trump's pressure and changed 
their maps for U.S. users. On Monday, he published a map of North America 
covered in the U.S. flag on social media.

   "After renaming a gulf and a lake, maybe the next step for him is to rename 
a river?" said Daniel Bland, a political scientist at McGill University.

   Trump's pressure is hardening resistance in Canada

   Trump's trade war and repeated talk of making Canada the 51st state have 
fueled anger and rallied support for Carney. Canadians have sharply cut travel 
to the United States and boycotted U.S. goods.

   The current trade war began after Trump returned to office and imposed a 
series of tariffs on Canadian goods despite having negotiated and repeatedly 
praised the North American trade agreement during his first term. Many of those 
tariffs violate the pact.

   The rupture is especially striking because the countries have long shared 
one of the world's closest relationships, with deeply integrated economies, 
close defense and security cooperation, vast cultural ties and, before 
relations deteriorated, about 400,000 people crossing the border each day.

   Carney has said talks can resume when the Americans "stop doing memes, stop 
throwing shade, stop trying to be tough" and become serious.

   So far, Trump's pressure has backfired in Canada, strengthening support for 
Carney rather than forcing concessions.

   Nelson Wiseman, professor emeritus of political science at the University of 
Toronto, said Trump's 2024 reelection deepened Canadians' distrust of the 
United States -- not just its government, but the judgment of Americans.

   "Canada-U.S. relations, even without confrontation, will never be what they 
were before Trump," he said.

   Carney is becoming a global voice for standing up to Trump

   At the World Economic Forum in Davos in January, Carney warned that great 
powers are using economic integration to coerce smaller countries. The speech 
helped establish him as the leading voice among countries looking for ways to 
resist Trump.

   Trump responded a day later by saying Canada "lives because of the United 
States" and warning: "Mark, remember that next time you make your statements."

   Carney will address the European Parliament next week, giving him another 
major stage.

   "The Canadian public is behind the Carney government and the world is 
watching what will happen next," said Bland, the McGill political scientist. 
If Canada's defiant approach succeeds, he said, it "could be used as a 
template" for resisting the Trump administration's trade policies.

   The fight is also about whether Canada keeps its factories

   Trump has also threatened 50% tariffs on Canadian vehicles, auto parts and 
steel next year if Canada does not "fall in line," a potentially devastating 
escalation for industries built around deeply integrated North American supply 
chains.

   "We want the cars to be made in Detroit and in South Carolina and in 
Tennessee and in all of our places where we make cars. We don't want them to be 
made in Canada," Trump said.

   A 50% auto tariff could hammer Canadian plants and raise vehicle prices 
across North America because parts and finished vehicles cross the border 
repeatedly during production.

   Carney says Washington's terms could leave Canadian industries "gradually 
wound down in Canada and wiped out."

   Could Canada actually win?

   Canada starts at a disadvantage: The U.S. economy is roughly 13 times 
larger, and Canada sends more than 70% of its exports south of the border.

   But Bland said this is not a normal trade fight. He pointed to Trump's 
domestic unpopularity, the approaching midterms and court challenges that could 
undo more U.S. tariffs.

   "Under normal conditions, this would be a very long shot for Canada," he 
said.

   But Washington has vulnerabilities too. U.S. refineries rely on 4 million 
barrels of oil a day from Canada, and American farmers depend heavily on 
Canadian potash fertilizer. So far, however, Canadian leaders have ruled out 
using some of that leverage by taxing or restricting critical exports.

   Canada entered this round with some economic momentum. Its economy grew at a 
3.2% annualized rate in the second quarter, more than twice the 1.5% pace in 
the United States.

   Industry Minister Mlanie Joly put the government's ambition plainly:

   "I'm convinced that we will be able to show the world that Canada will win 
this trade war."