Canada is levelling reciprocal dollar-for-dollar tariffs on U.S. steel and aluminum imports, in response to U.S. President Donald Trump’s 25 per cent tariffs on all steel and aluminum imports that came into effect today.
The federal government’s countermeasures will come into effect at 12:01 a.m. on March 13. The 25 per cent tariffs will hit steel products worth $12.6 billion and aluminum products worth $3 billion.
And the Bank of Canada just dropped interest rates 25 points.
While announcing the rate cut, Bank of Canada Governor Tiff Macklem warned Canada is “facing a new crisis,” and that the central bank “cannot offset the impacts of a trade war.”
”Depending on the extent and duration of new U.S. tariffs, the economic impact could be severe.” Macklem said that the “pervasive uncertainty” has already shaken business and consumer confidence.
This trade war will hurt the US, for sure. But it can tolerate it much longer than Canada can.
For example, currently the US imports billions of dollars of lumber from Canada, but a bill currently in Congress could significantly change that, which would return those billions to US logging.
