Canada is feeling the pain from Trump's tariffs, but the trade fight didn't start overnight

Canada's economy is absorbing heavy damage from the trade conflict with the United States, as American tariffs covering roughly $20 billion in Canadian goods stay in force. Talks between President Donald Trump and Prime Minister Mark Carney have collapsed, and both governments have added new penalties, Fox News reports.

The Bank of Canada says steel shipments abroad have dropped by about half since the duties began, while lumber sales earlier this year sat about 20% under 2024 levels. Aluminum and auto producers were hit too, and output and jobs have fallen in some hard-hit sectors. Government figures show consumer prices up 3% in August from a year earlier, with groceries rising 2.8% and transportation 7.5%. Canada's retaliatory tariffs add to the burden: the central bank says affected goods, including groceries, furniture and appliances, rose roughly 6% more than comparable untaxed items.

The dispute's roots are older. Consumer Choice Center analyst David Clement says Washington's objections to Canadian dairy barriers are valid, citing steep tariffs on chicken, turkey, eggs, cheese and milk, though European access differs under separate agreements, and dairy is a small part of trade.

Summarized by PolitiKool from Fox News’s reporting. Read the full story at Fox News →