US tariffs took effect last Friday as talks broke down, and, yesterday, Canada unveiled a promised dollar-for-dollar retaliation: $27.6 billion on their goods to match $27.6 billion on ours—aimed primarily at the same goods. 

The feds also announced $7.5 billion in supports for the tariff-afflicted, mainly for boosting companies’ projects and extending changes to worker EI. 

In two weeks, Canadian tariffs will leap to 50 percent on American makeup, phones, aluminum, steel, forks and spoons, milk and honey, and more. 

US clothing, seafood, furniture, tools, and more face lower tariffs. 

Even the kitchen sink isn’t so proverbial, with tariffs now on stoves, kitchenware, and kitchen cabinets. 

You can find the full counter-tariff list here.

An escalated war of words also rages this week as leaders wrestle to control the narrative. Carney taunted the US for the size of its icebreaker fleet.

Trump suggested renaming Lake Ontario to Lake America (not his best work). 

Doug Ford called Trump a “loser,” “bully,” and “king of bankruptcies,” saying there is “a lot of real estate on my ass, so he’s got a lot of room to kiss my ass” (probably among his best work, unfortunately).

Trump, in turn, dismissed the premier as the “less charismatic, intelligent, and overall unimpressive brother of the late, great Rob Ford.”

Ford relented somewhat yesterday, telling CNN the exchanges got “heated” and personal” but that it’s time to make a deal, despite last week’s official negotiations collapsing. 

Why did the deal fail? 

In some ways, simply for the reason that negotiations generally fail: “They asked too much, and they offered too little,” Carney said. 

“There were some things we wouldn’t do. We were not prepared to compromise Canada’s sovereignty or to undermine our key industries. We were not prepared to compromise on our sovereignty, the protection of the French language, or our culture. To be clear with our American colleagues, for my government and for Canada, these issues were never on the table, even though the United States pushed for them until the very last minute.”

But it was the nature of what the US wanted that drove Canada’s negotiating team back to Ottawa and has reheated a rivalry that, for many Canadians, reached a boil in early 2025 and has since simmered. 

The US reportedly targeted Canada’s domestic French-language policies and ability to make its own deals with other nations, seeking promises to conduct certain business only with the US or with US permission.

Carney decried “an attitude at the negotiation table that Canada is a subsidiary of the United States.”

What comes now?

As it already has been, the tariff fallout will be felt broadly but often unevenly. The US has set up its tariffs to reward and punish provinces selectively. Meanwhile, American border communities pay disproportionately for their president’s tactics, weathering a stark tourism drop-off. 

The Walrus spoke to seven political and policy experts about what exactly has changed and what this new period might demand of Canada.

“Hold fast.”

Erin O’Toole, former federal Conservative leader

O’Toole likens Canadians to sailors who must brace through a storm or battle to keep the skip on course and themselves on deck. He references the 2003 Master and Commander film, framing the US as a greedy larger ship that hampers its ability to defeat a smaller vessel by trying not to damage its value as a prize (in this case, mainly US access to Canada’s energy sector). 

“A war with no winners, only losers.”

Fen Osler Hampson, international affairs professor at Carleton 

Osler Hampson predicts a long, escalating struggle that will “get a lot worse before it gets any better” and not only strain the bottom lines of Canadian and American consumers and small businesses but also cause Canadian job losses and plant closures. But to accept a deal would have meant sacrificing much of Canada’s auto sector, which Trump targeted.

“[A] country strong enough that no single foreign government has the capacity to dictate its economic choices.”

Ann Fitz-Gerald, Balsillie School of International Affairs director

Fitz-Gerald says Trump will be constrained by domestic economic and political pressure ahead of the fall midterm elections and by the responses of Mexico and other countries to Canada’s non-capitulation. Fitz-Gerald also says Trump has tried to leverage access to the US market to extract changes to Canada’s domestic policy—i.e. override sovereignty. So Canada’s long-term success will be measured by whether it can emerge less economically coercible by any one foreign government. 

“[A] steady erosion of confidence that any agreement would be enforceable.”

Marco Mendicino, former cabinet minister and former Carney chief of staff 

Mendocino suggests that the US became increasingly untrustworthy as a partner and Canada must be prepared to proceed alone.

“Canada walked into the stadium without studying the game film of the opponent.”

Carlo Dade, head of the New North America Initiative

Dade argues that the Trump administration’s last-minute changes and efforts to intrude on Canada’s negotiations with others were predictable based on its various recent trade dealings with other countries. With CUSMA reviews now happening annually, Dade argues the federal government needs to get better not only at anticipating these developments but also at preparing the public. 

“What do we do about the fact that Canada remains almost entirely under the thumb of American Big Tech?”

Vass Bednar, managing director of the Canadian Shield Institute

Bednar writes that Canada gave too many concessions to US-based Big Tech in the original CUSMA deal and must now retake digital sovereignty. “Our broad policy response has leaned hard into the old economy: energy, ore, steel, aluminum, critical minerals,” she writes, saying that we can sell those things to any country but must now focus on not giving up ground in the high-margin digital part of the economy.

“In a nutshell, they are asking us to give away the essence of sovereignty.”

Peter Jones, public and international affairs professor at the University of Ottawa

Jones writes that the concessions America wanted were not merely economic but specifically compromised defence autonomy, requiring Canada to buy equipment from the US and to ask the US for “permission” to buy from or form relationships with others.

What will come after?

This time, none of what we’re facing is totally new. We’re entering the latter part of the second year of this trade war. For some leaders, the end is coming into sight. Manitoba premier Wab Kinew said Canada should be prepared to “duke it out” with Trump until his term ends and term limits (theoretically) take effect. That’s only two more of these now-annual CUSMA negotiations. 

The Parti Québécois, meanwhile, is preparing to wait out not only Trump but the Canadian nationalism he has engendered before holding any separatism referendum.  

But it may not be that simple, public policy academic Andrea Lawlor says. Lawlor argues in The Walrus that we should not expect a full restabilization of the Canada–US relationship even after Trump’s term is done. 

However the relationship of tomorrow is built, it will be on a foundation of today’s heavily tariffed lumber. 

How will these new tariffs and counter-tariffs impact your life? Reply to this email to let us know how different Canadians are being affected.

The Man at the Helm

5 stories on Mark Carney 

• His explanation of why he rejected the US deal

• The elite neighbourhood that influences him

• His ambitions in next week’s by-elections

• His wartime approach: Moving fast and centralizing power 

• The gun he received as a diplomatic gift