Canada to maintain retaliatory tariffs on the US

move likely to continue the trade tensions between both countries.

Canada, through new Canadian Prime Minister Mark Carney, on Sunday confirmed that she will maintain the retaliatory tariffs on the US.

He promised to follow the policy announced by his predecessor, Justin Trudeau, in response to US President Donald Trump’s tariffs on Canadian imports.

This move is likely to continue the trade tensions between the two countries.

It’s worth noting that the trade war between the US and Canada started in 2025, with Trump imposing tariffs on Canadian imports.

Trump cited national security concerns and the need to address the flow of illicit drugs, including fentanyl, across the US-Canada border.

Canada responded with retaliatory tariffs, and the situation has been escalating since then.

The trade war has significant implications for both countries, with potential impacts on the economy, trade relationship between the US and Canada.

Mark Carney, made it clear on Sunday that the country “will never” be part of the United States.

The former central banker turned political leader, won the election in a landslide victory, setting him up to become the country’s 24th prime minister.

In his first speech after securing the leadership, Carney delivered a strong message to both Canadians and the United States.

He vowed to defend the nation’s sovereignty amid rising tensions with Donald Trump’s administration.

The New York Times reported that Carney said, “America is not Canada. And Canada never, ever will be part of America in any way, shape or form,”

He said this while addressing a crowd of Liberal supporters in Ottawa.

Carney said, “We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.”

Carney’s leadership comes at a time of heightened tensions between the U.S. and Canada, as Trump has imposed new tariffs on Canadian goods.

Trump has also repeatedly made comments about America’s supposed right to Canada’s natural resources.

Carney, who won the Liberal leadership with 85.9 percent of the vote, is positioning himself as a strong negotiator who will push back against American economic and political pressure.

As of March 4, 2025, Canada has imposed 25% tariffs on $30 billion worth of imported goods from the US, with plans to increase the scope to $155 billion if the US maintains its tariffs ¹.

The affected products include a wide range of goods such as:

• Food and Beverages: orange juice, peanut butter, wine, spirits, beer, coffee, and certain poultry products
• Appliances and Electronics: various household appliances and electronic devices
• Apparel and Footwear: clothing, footwear, and textiles
• Vehicles: motorcycles, trucks, and buses

These tariffs are intended to protect Canadian interests, workers, and businesses, and will remain in place until the US eliminates its tariffs on Canadian goods ¹.

BACKGROUND OF CARNEY

The 59-year-old Carney is a political outsider who has never held office, which would in normal times have killed his candidacy in Canada.

But distance from Trudeau and a high-profile banking career played to his advantage, and Carney argues he is the only person prepared to handle Trump.

He argues Canada must fight Trump’s tariffs with dollar-for-dollar retaliation and diversify trading relations in the medium term.

In the next election, which must be held by October 20th, the Liberals will face off against the official opposition Conservatives.

The Conservatives are led by Pierre Poilievre, who is a career politician with little international exposure.

By contrast, Carney is a globetrotter who spent 13 years at Goldman Sachs before being named deputy governor of the Bank of Canada in 2003.

He left in November 2004 for a top finance ministry job and returned to become governor of the central bank in 2008 at the age of just 42.

Carney won praise for his handling of the financial crisis, when he created new emergency loan facilities.

He also gave unusually explicit guidance on keeping rates at record low levels for a specific period of time.

Even at that stage, rumours swirled that he would seek a career in politics with the Liberals, prompting him to respond with some sense of irritation – something that is still sometimes evident.

He told a reporter in 2012, “Why don’t I become a circus clown?” when asked about possible political ambitions.

The Bank of England was impressed enough to poach him in 2013, making him the first non-British governor in the central bank’s three-century history.

It also made him the first person to ever head two G7 central banks.

Britain’s finance minister at the time, George Osborne, called Carney the “outstanding central bank governor of his generation”.

Carney, though, had a challenging time, forced to face zero inflation and the political chaos of Brexit.

He struggled to deploy his trademark policy of signalling the likely path of interest rates.

The bank said its guidance came with caveats but media often interpreted it as more of a guarantee, with Labour legislator Pat McFadden dubbing the bank under Carney as an “unreliable boyfriend”.

When sterling tumbled in the hours after the Brexit referendum result in 2016, Carney delivered a televised address to reassure markets that the bank would turn on the liquidity taps if needed.

In a written comment to Reuters, Santander’s Executive Chairman, Ana Botin said, “Mark has a rare ability to combine a central banker’s steady hand, with a political reformer’s eye to the future,”

She said Carney “steadied the ship” in the UK after Brexit.

But he infuriated Brexit supporters by talking about the economic damage that he said was likely to be caused by leaving the European Union.

Conservative lawmaker Jacob Rees-Mogg called him the “high priest of project fear” but Carney said it was his duty to talk about such risks.

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