Business
Dropping the elbows: Canada caves to Trump’s trade pressure by rolling back retaliatory tariffs
Quick Hit:
Canada is rolling back billions in tariffs on U.S. goods, a sharp reversal by Prime Minister Mark Carney aimed at easing tensions with President Donald Trump as trade talks heat up.
Key Details:
- Canada will eliminate 25% tariffs on U.S. consumer goods worth roughly $21.7 billion, including orange juice, wine, clothing, and motorcycles.
- Prime Minister Carney’s move follows a direct phone call with President Trump and marks a sharp break from his campaign promise to retaliate against U.S. trade measures.
- Canada will maintain tariffs on U.S. steel, aluminum, and automobiles — sectors where Trump has imposed his toughest levies.
Diving Deeper:
Prime Minister Mark Carney is abandoning one of his central campaign promises — to hit the United States with “maximum pain” through sweeping tariffs — and is instead extending what amounts to a trade olive branch to President Donald Trump. The decision to remove 25% tariffs on a broad range of U.S. consumer goods, valued at $21.7 billion, represents a remarkable about-face for a Canadian government that had previously positioned itself as one of Trump’s fiercest international trade adversaries.
The shift follows a phone call between Carney and Trump on Thursday, their first publicly acknowledged conversation in weeks. While Canada will continue to levy tariffs on steel, aluminum, and automobiles, the rollback is a clear sign that Carney is recalibrating his approach in response to U.S. pressure and the looming review of the U.S.-Mexico-Canada Agreement. The White House welcomed the move as “long overdue,” according to a senior official, signaling that Washington sees Ottawa’s retreat as validation of Trump’s hardline negotiating style.
Carney’s pivot is particularly striking given the fiery rhetoric that propelled him into office. During his campaign, he blasted Trump’s tariffs and vowed to retaliate aggressively. That posture may have served him politically against former Conservative leader Pierre Poilievre, but as prime minister, Carney appears more pragmatic. His finance ministry has already carved out exemptions for automakers and other industries since April, suggesting a growing awareness that trade wars can backfire economically.
The decision is also shaped by economic realities. Despite Canada’s earlier tariff blitz, economists note that the effective U.S. tariff rate on Canadian goods remains below 7% thanks to USMCA exemptions. Meanwhile, Canada’s retaliatory tariffs did not produce the inflation surge some feared, with consumer prices rising only 1.7% in July. Still, Carney faced the prospect of prolonged strain with Washington at a time when the U.S. economy is expanding under Trump’s leadership, and Canadian businesses were lobbying hard for relief.
For President Trump, this is another reminder that his “America First” approach is producing results. Canada, once defiant, is now backing down — a stark contrast to the confrontational posture of Justin Trudeau’s government and even Carney’s own campaign pledges. The message is clear: protectionist threats from Washington carry weight, and Canada’s leaders are recognizing that cooperation is more beneficial than confrontation.
The long-term question is whether Carney will maintain this more conciliatory posture or revert to his combative instincts when political pressures mount. For now, though, the rollback underscores Trump’s continued leverage on the global stage and his ability to secure favorable outcomes for American workers and industries.
From the Daily Caller News Foundation
Despite their strategic significance, the U.S. imports 80% of the rare earths it consumes, primarily from China, which dominates global production and controls roughly 92% of the world’s refining capacity.
President Donald Trump on Friday threatened China with a massive tariff hike and hinted his upcoming summit with Chinese President Xi Jinping could be canceled as a result of Beijing’s latest escalation in trade hostilities.
China ramped up its economic pressure campaign this week, first by imposing new export controls Thursday on rare earth minerals critical to the production of vehicles, weapons systems, and other advanced technologies. On Friday, Beijing escalated further, announcing new port fees on American ships and launching an antitrust investigation into U.S. tech giant Qualcomm.
In response to what he described as “great trade hostility,” Trump said there was “no reason” to meet with Xi in South Korea later this month.
Dear Readers:
As a nonprofit, we are dependent on the generosity of our readers.
Please consider making a small donation of any amount here.
Thank you!
“Dependent on what China says about the hostile ‘order’ that they have just put out, I will be forced, as President of the United States of America, to financially counter their move. For every Element that they have been able to monopolize, we have two,” the president posted on Truth Social.
Trump announced later on Friday that the U.S. would impose a 100% tariff on China starting Nov. 1, in addition to existing levies, and implement export controls on “any and all critical software.” He added that the tariffs could go into effect sooner, “depending on any further actions or changes taken by China.”
Despite their strategic significance, the U.S. imports 80% of the rare earths it consumes, primarily from China, which dominates global production and controls roughly 92% of the world’s refining capacity.
Under the new rules, foreign suppliers must obtain Beijing’s approval to export any product made with Chinese rare-earth processing technology or containing rare-earth materials that comprise as little as 0.1% of the item’s value. The restrictions also extend to the export of technology used in rare-earth mining, smelting, and magnet manufacturing, and add five more rare-earth elements to China’s existing control list.
Trump warned that Beijing’s move could “clog” global markets and “make life difficult for virtually every country in the world.”
“I have always felt that they’ve been lying in wait, and now, as usual, I have been proven right! There is no way that China should be allowed to hold the World “captive,” but that seems to have been their plan for quite some time,” the president wrote.
“But the U.S. has Monopoly positions also, much stronger and more far reaching than China’s. I have just not chosen to use them, there was never a reason for me to do so — UNTIL NOW!” Trump said.
The Chinese Transport Ministry also said it will begin collecting port fees on vessels owned by U.S. companies or individuals — and even those built in America — starting Oct. 14. The rollout overlaps with Washington’s plan to impose new charges on large Chinese vessels docking at U.S. ports the same day.
The president also noted that Beijing’s timing was “especially inappropriate,” noting that it coincides with the peace deal he helped broker between Israel and Hamas to bring the two-year conflict to an end.
From the Fraser Institute
Another day, another electric vehicle (EV) fantasy failure. The Quebec government is “pulling the plug” on its relationship with the Northvolt EV battery company (which is now bankrupt), and will try to recoup some of its $270 million loss on the project. Quebec’s “investment” was in support of a planned $7 billion “megaproject” battery manufacturing facility on Montreal’s South Shore. (As an aside, what normal people would call gambling with taxpayer money, governments call “investments.” But that’s another story.)
Anyway, for those who have not followed this latest EV-burn out, back in September 2023, the Legault government announced plans to “invest” $510 million in the project, which was to be located in Saint-Basile-le-Grand and McMasterville. The government subsequently granted Northvolt a $240 million loan guarantee to buy the land for the plant, then injected another $270 million directly into Northvolt. According to the Financial Post, “Quebec has lost $270 million on its equity investment… but still had a senior secured loan tied to the land acquired to build the plant, which totals nearly $260 million with interest and fees.” In other words, Quebec taxpayers lost big.
But Northvolt is just the latest in a litany of failure by Canadian governments and their dreams of an EV future free of dreaded fossil fuels. I know, politicians say that it’s a battle against climate change, but that’s silly. Canada is such a small emitter of greenhouse gases that nothing it could do, including shutting down the entire national economy, would significantly alter the trajectory of the climate. Anything Canada might achieve would be cancelled out by economic growth in China in a matter of weeks.
So back to the litany of failed or failing EV-dream projects. To date (from about 2020) it goes like this: Ford (2024), Umicore battery (2024), Honda (2025),General Motors CAMI (2025), Lion Electric (2025), Northvolt (2025). And this does not count projects still limping along after major setbacks such as Stellantis and Volkswagen.
One has to wonder how many tombstones of dead EV fantasy projects will be needed before Canada’s climate-obsessed governments get a clue: people are not playing. Car buyers are not snapping up these vehicles as government predicted; the technologies and manufacturing ability are not showing up as government predicted; declining cost curves are not showing up as government predicted; taxpayer-subsidized projects keep dying; the U.S. market for Canada’s EV tech that government predicted has been Trumped out of existence (e.g. the Trump administration has scrapped EV mandates and federal subsidies for EV purchases); and government is taking the money for all these failed predictions from Canadian workers who can’t afford EVs. It really is a policy travesty.
And yet, like a bad dream, Canada’s governments (including the Carney government) are still backing an irrational policy to force EVs into the marketplace. For example, Ottawa stills mandates that all new light-duty vehicle sales be EVs by 2035. This despite Canadian automakers earnest pleas for the government to scrap the mandate.
Canada’s EV policy is quickly coming to resemble something out of dysfunctional-heroic fiction. We are the Don Quixotes, tilting futilely at EV windmills, and Captain Ahabs, trying to slay the dreaded white whale of fossil-fuelled transportation with our EV harpoons. Really, isn’t it time governments took a look at reality and cut their losses? Canada’s taxpayers would surely appreciate the break.
Kenneth P. Green
Jobs Critic says NDP government lied to British Columbians and sold out Canadian workers in billion dollar Chinese ferries purchase
The Bureau Exclusive: Chinese–Mexican Syndicate Shipping Methods Exposed — Vancouver as a Global Meth Hub
Carney’s Bungling of the Tariff Issue Requires a Reset in Canada’s Approach to Trump
Trump says U.S. in ‘armed conflict’ with drug cartels in Caribbean
Elbows Up Part Deux: Liberal Canada Now Riding The Blue Jays
Negotiations continue in Israel-Hamas peace deal
Jason Kenney’s Separatist Panic Misses the Point
-
Alberta20 hours agoFact, fiction, and the pipeline that’s paying Canada’s rent
-
Business2 days agoCall for Federal Inquiry as Pressure Mounts for Release of Buried Report on Buddhist Land Transactions in PEI
-
Internet2 days agoSocial media pushes pornography on children within minutes, report finds
-
Energy1 day ago“It is intellectually dishonest not to acknowledge the … erosion of trust among global customers in Canada’s ability to deliver another oil pipeline.”
-
Energy1 day agoIn the halls of Parliament, Ellis Ross may be the most high-profile advocate of Indigenous-led development in Canada.
-
Aristotle Foundation1 day agoEfforts to halt Harry Potter event expose the absurdity of trans activism
-
International1 day ago
Israeli government approves Gaza ceasefire
-
Crime1 day agoFlorida teens credited for averting school shooting plot in Washington state