Tariff Retaliation by Canada 2026

Trump doesn't work weekends. He is generally golfing. Biden didn't work weekends either. World crisis have to wait till Monday. While Canadian negotiators remained in Washington many politicians in America were gathering support for the upcoming mid-term elections inn their home turf. Some, including Jamieson Greer, the U.S. Trade Representative were in Iowa for the State Fair.

The Iowa State Fair is like the Calgary Stampede for the American political class. It is also an event that Canadian companies attend to promote trade. Canada is Iowa's largest trading partner and many farmers in the area are spooked by the possibility of losing that trade. Interviews with farmers show they know very little about the dispute aside from that it could hurt them. Most point to the dairy as being an issue but seem unclear if it because we are exporting into their market for milk with no reciprocity. The answer of course is no.

Many Canadian officials were at the Iowa State Fair and we'll have to send many more out over the days and weeks to talk to elected officials and industry. The level of cowardice among Republicans is such that they seem ready to lose the mid-terms rather than confront Donald Trump. Lest anyone think the Democrats are out friends, think again. But it seems more likely they will be predictable and more like to keep CUSMA. Don't expect any deals on softwood lumber.

And with no meaningful reduction of sectoral tariffs, the provinces are not inclined to put booze back on the shelf. Even in provinces that have put booze on the shelf, there is a 40% reduction in sales, particularly on wine. Ontario removing alcohol has been a proper punch in the balls for their industry. There has been a steady stream of executives begging for Trump to do something when brought the 50% tariff. However, it was the sectoral tariff that brought about the booze ban and reciprocal tariffs. The U.S. seems to still blink in surprise that Canada responded.

From what little disclosure we have gotten, it will likely come down to a talk between Carney and Trump. No deal is probably better than a bad deal. If the 50% tariffs are put in place by Trump on Wednesday, Carney says he has a response. It will hurt small business this time.

The Toronto Sun columnist Brian Lilley Conservative Party supporter has blamed Carney for trading with China for the issues. It is such a load of crap since the U.S. is looking to do their own trade deal in a few weeks. And the trade deal was to get Canadian farm goods from Canada back on Chinese shelves. In essence, Lilley wants Canadian farmers to suffer. Sometimes it is hard to take the American owned newspaper seriously.

In the end if Trump chickens out, the stopwatch starts again. In the meantime, no booze on the shelves.