Canada’s Targeted Trade Retaliation Puts Pressure on the U.S.; Canada’s Trump Cards in U.S. Trade Retaliation

At midnight today (8th) Eastern Time in Canada, which is 12:00 noon Beijing time, the Canadian government's retaliatory tariffs on U.S. goods officially took effect. According to Canada, the total value of U.S. goods subject to these retaliatory tariffs matches the value of goods affected by the U.S. side's 50% tariffs on Canadian products, thereby achieving “equal and reciprocal” retaliation. Experts believe that Canada “is demonstrating its ability to stand up to the United States in trade negotiations.” Canada’s strategy is to increase domestic pressure within the U.S., ultimately forcing the U.S. side back to the negotiating table, but U.S. trade protectionism is unlikely to fundamentally change. Wan Zhe, Professor at Beijing Normal University and economics expert, stated that Canada’s current retaliatory tariffs are fully equivalent in scale to those imposed by the U.S., covering products including steel and aluminum, dairy, agricultural goods, home appliances, electronics, and consumer goods. The core strategy is to precisely transfer the tariff costs to politically sensitive areas in the U.S., in an attempt to leverage the pressure from the midterm elections to force the U.S. side to compromise. Another card Canada holds is its resource base, which is also the country’s most powerful bargaining chip. This includes crude oil, natural gas, potash, and more. Of course, another card is the integrated industrial chain. For example, U.S.–Canada manufacturing, especially the automobile industry, is highly integrated, and cross-border production collaboration is extremely close. Imposing tariffs may essentially mean taxing American domestic production, potentially affecting the costs of U.S. car companies and jobs in major auto-producing states. (CCTV)