The US-Canada trade war

Trade talks between the US and Canada collapsed on 22 August after a week of intense negotiations in Washington, with each side accusing the other of last-minute demands; the US responded with new 50% tariffs on about $20bn of Canadian goods (wine, dairy, cement, clothing and more), and Canadian PM Mark Carney called the move a 'miscalculation' designed to 'hurt and divide us,' vowing to match it 'dollar-for-dollar.' Trump said Canada wanted 'the benefits of being a state, without being one,' continuing his running references to Canada as a future '51st state'; Carney said the US had tried to push an 'asymmetrical deal' that would have required Canada to weaken protections for its French language and culture and limit its ability to strike trade deals with other countries.

Canada's retaliatory tariffs (15-50% on roughly $20bn of US goods) took effect 9 September, prompting the US to ban imports of Canadian dairy, motorcycles and alcohol starting 29 September. Rather than simply absorbing the damage, Carney has pursued a two-track response: publicly noting Canada is the top export customer for 26 US states, giving it real leverage despite being the smaller economy, while touring the world - hosting a Toronto investment summit aimed at drawing $1 trillion over five years and visiting Europe in mid-September to explore a 'unique alliance' with the EU (though not membership) - to reduce Canada's historic reliance on US trade, which has already fallen from over 72% of exports to about 66% within the year.