Economic Hotspot Q&A | How Canada's Trade Countermeasures Can 'Accurately Pressure' the United States

The Canadian federal government announced on the 25th that specific measures to impose retaliatory tariffs on US goods will officially take effect on September 8th.

Which areas of the US economy will Canada impose retaliatory tariffs on? How will Canada's counterattack affect US exports and exert political pressure on the US? Do US politicians and business people support the US Canada trade war?

Which areas of the US economy are most affected

Canadian federal officials stated on the 25th that the total value of US goods affected by retaliatory tariffs is approximately $20 billion, which is equivalent to the 50% tariffs imposed by the US on Canada.

According to the list released by the Canadian Ministry of Finance, the retaliatory tariffs are mainly concentrated in areas such as steel and aluminum, dairy products, household appliances, agricultural equipment, pulp and paper, plastics, and electronic products, with tax rates of 15%, 25%, and 50%. Among them, the import tariffs on most US steel and aluminum products will be increased from 25% to 50%; Dairy products such as cheese, fish, seafood, and some steel and aluminum derivatives will be subject to a 25% tariff. The countermeasures tariffs previously imposed by Canada on American cars and other goods will remain unchanged.

Analysts believe that the US and Canada have close economic ties, and the new tariffs will push up cross-border trade costs between the two countries and undermine confidence in related industries. According to data from the US Department of Commerce, including trade in services, the bilateral trade volume between the US and Canada reached nearly $900 billion last year, making it one of the largest bilateral trade relationships in the world. Canada is the largest buyer of goods and services from the United States, excluding the European Union. Last year, about 8% of the total steel production in the United States was exported, with over one-third going to Canada.

How Canada's' Precise Counterattack 'Pressures

Some media and economists believe that Canada's retaliatory tariffs are not only "equal and reciprocal," but also "precise and strategic," and will put pressure on Republican candidates in key districts of the November 2026 US midterm elections.

According to the Wall Street Journal, many northern states in the United States, such as Maine, Michigan, Minnesota, Wisconsin, and New Hampshire, consider Canada as their main export market. The crayfish and other seafood targeted by Canada's retaliatory tariffs this time are mainly produced in Maine, while dairy products such as cheese mainly come from Wisconsin and New England.

Ed Glaser, a researcher at the Progressive Policy Institute and former chief economist at the Office of the United States Trade Representative, believes that Canada's intention to tax lobsters is clear because "half of the lobsters caught in Maine are shipped to Canada, and the state will hold a major election this fall that will determine control of the Senate.

Grayson said that Canada is trying to show Republicans through retaliatory tariffs that a trade war "will come at a systemic cost.

Canadian Minister of Industry Melanie Jolly bluntly stated that tariffs are aimed at exerting political pressure on key constituencies in the US midterm elections, and that "our products target all states in the US, and it is wise and strategic for us to exert political pressure.

The Economist believes that as the US midterm elections approach, the impact of tariffs on inflation, business operations, and employment may become more apparent. Canada's strategy is to increase domestic political pressure in the United States, ultimately forcing the US to return to the negotiating table.

Do US politicians and business people support a trade war

The voices of opposition to the US Canada trade war in the US political and business circles are constantly increasing. In addition to Democrats, some Republican lawmakers and governors are also concerned that the trade war may affect the local economy and midterm elections. Former Vice President Pence publicly stated, "The last thing we need at this moment is a trade war with Canada

Republican Senator Susan Collins is trying to secure her seat in Maine. She warned that imposing new tariffs on Canada would bring economic pain to Americans.

I still believe that imposing new tariffs on Canada is wrong because it would increase the (operating and living) costs for Maine residents, "Collins said

Jeffrey Schott, a trade expert at the Peterson Institute for International Economics in the United States, believes that considering Canada's retaliatory tariffs will only take effect on September 8th, and the US will not raise import tariffs on Canadian products such as cars, auto parts, and steel to 50% until January next year, "both sides still have time to assess costs and find alternative solutions.