Well, the Canada-USA trade talks fell apart at the eleventh-plus hour.
Prime Minister Mark Carney blamed the Americans for "last-minute changes in US proposed terms [that] were unfair, uneconomic and called into question the reliability of any deal". That sounds about right from past experience.
US Trade Representative Jamieson Greer, of course, blamed the Canadians for "new demands and walk-backs of other commitments by Canada [that] have upended the careful balance reached in the past days". That sounds less convincing.
So, the 50% Section 338 tariffs on about $28 billion of Canada's exports to the US (about 5% of total exports) are set to go ahead forthwith. That sounds pretty bad, but an RBC analysis estimates the fallout at just 0.4% of Canada's GDP, and a separate Capital Economics study puts it at 0.6% of GDP. So, not good, but not disastrous, in the scheme of things. The burden would not fall evenly on the economy, though, with apparel and electrical goods being most badly affected (20% of production and jobs in those sectors could be hurt).
Canada has vowed to retaliate "dollar for dollar", Trump has vowed to up the ante should Canada retaliate, and we now have an all-out open-ended trade war. And we haven't even started negotiation on the renewal or otherwise of the CUSMA/USMCA free trade agreement!
But, I'll tell you what, it actually pretty good to be standing up to the bully to our south. The only other country that has stood up for itself in this way is China. Although, granted we are much more in a David and Goliath situation.
Elbows up, anyone?
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