Why the Carney government isn't treating Trump's latest tariff moves as a dramatic escalation

The official, who the Star agreed not to identify in order to candidly discuss the government’s strategy, said the U.S. president appears to have retaliated for the sake of responding to Canada’s own counter-tariffs (imposed in response to Trump’s tariff package that took effect two weeks ago) while at the same time Trump removed other U.S. import duties on Canadian toilet paper, road salt and cement — which shows, the official said, he’s starting to understand “those tariffs are not helpful to his economy.”

“It seems like he’s playing the game because he said publicly that he would not tolerate any countermeasures or any counter tariffs or any retaliation from Canada, so he retaliates even more just for the sake of it,” said the official.

“It’s not a full-on attack on our economy again,” the official said, referring to Trump’s package of 50 per cent tariffs first threatened in July and which ultimately took effect Aug. 22 at midnight after talks to reach a deal collapsed and led to a bitter exchange of who was to blame. Those tariffs hit some $27.6 billion worth of Canadian shipments to the U.S., and Ottawa responded with tit-for-tat countermeasures against American exports, in addition to counter-tariffs that match the U.S. duties of 25 and 50 per cent against autos, steel and aluminum.

Economists suggested the actual overall impact of Trump’s latest moves may not be severe, although they will hit Canadian distillers hard. The bans cover only 0.25 per cent of Canada’s exports to the U.S., according to a written analysis by Stephen Brown, economist at Capital Economics.

In addition to announcing new bans to come on a range of Canadian motorcycles, wine and spirits, certain cheese and dairy products, molasses, non-alcoholic beers, and raised tariffs on other products, Trump threatened on social media to bar Canadian aerospace giant Bombardier from selling products in America, and to ensure Canadian companies are barred from bidding on U.S. and state procurement projects.

The threatened ban on Bombardier products was not later outlined in any of the five formal proclamations issued by the White House.

But opposition was swift to a move that seemingly undercuts Trump’s own justification for his tariff strategy: his goal of forcing manufacturers to establish production in the U.S.

Bombardier already employs thousands in that country as the company (and its Republican supporters in the U.S.) made clear in public statements. The company said its American workers “are based all around the United States with sites in Kansas, Texas, Arizona, Florida, Connecticut, Illinois, Delaware, California, Washington D.C. and New Jersey, as well as overall direct employment presence in more than 20 states.”

Speaking in Edmonton Wednesday, Finance Minister François-Philippe Champagne portrayed the Carney government as unfazed.

“We did not wake up one day and say, ‘What are we going to do?’ We had already a number of plans in place. Plan A has always been to build, to support, to protect our economy and our workers.”

“I think there is a clear understanding that Canada is going to stand up,” Champagne told reporters. “When there are (U.S.) actions that are taken, we always have to make sure that our response is proportionate. We don’t want to escalate, but we, at the same time, want to make sure we have a level playing field with American companies who want to sell into Canada.”

She pointed out that Frenchville, “a small Maine town on the Canadian border, would incur $10,000 in extra costs for road salt, threatening the town’s ability to provide municipal services. I also shared that I had heard from Maine ready-mix cement company owners, one of whom told me his company would pay $150,000 each month because of these tariffs.”

Collins, one of a number of Republicans increasingly uneasy with Trump’s tariff strategy, wrote: “However, significant tariffs — including those on forest products — remain in effect and will lead to higher costs for Maine families and uncertainty for businesses. I urge the Administration to continue to work to deescalate this conflict and reach a trade resolution with our Canadian partners.”

Gabriel Brunet, a spokesman for Canada-U.S. Trade Minister Dominic LeBlanc, confirmed that “Canadian and American officials have maintained ongoing discussions on a range of issues, although formal trade negotiations are not taking place at this stage.”

LeBlanc’s counterpart, Greer, said the Canadians have reached out to him via text, in a podcast interview that his office publicly flagged Wednesday, recorded a few days earlier with the Financial Times.

Greer again pointed the finger squarely at the Canadian side for the collapse of talks, calling Carney’s description of the dispute as a trade war “unhinged.”

“It is the Canadians that came out and said, this is a war. This is an economic attack. I mean, again, for us, we’re just putting additional fees on foreign goods made by foreign workers in foreign countries. Like, that’s all a tariff is. It’s just business for us,” Greer told the Financial Times.

“Prime Minister Carney used the term war. It’s not a word we use, right? We don’t talk about it that way. For us, it’s business, it’s economics. And by the way, the tariffs we put in place whenever it was, 10 days ago, seven days ago, it only covers 5 per cent of imports from Canada.  It’s like a rounding error. And so, to kind of have it whipped up into this giant thing where we’re talking about war and economic attacks and all these things, it’s a little unhinged.”

With files from Ana Pereira