CHARLEBOIS: The cost of retaliation — Canada’s trade war misstep

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The trade war between us and the Americans is no longer just academic. It’s real, and Canada is at the center of one. In response to escalating tariffs from the United States, Canada has chosen to retaliate. While standing up to protectionist policies is necessary, the federal government’s approach could ultimately harm Canadian consumers far more than it impacts American interests.

Placing tariffs and taxes on food and essential goods that Canadians rely on is not just a poor economic decision — it is a direct attack on our own food security. It is impossible to win a trade war against the United States, the most powerful economy in the world, and the strategy of imposing retaliatory tariffs will likely yield more tariffs in response. The end result? A prolonged economic downturn that will hit Canadians the hardest.

The reality is that these tariffs act as a tax on Canadian consumers. Every additional cost imposed on imported goods translates into higher prices at the grocery store, increased costs for businesses, and a greater financial strain on households. The government may attempt to justify this as necessary pushback against U.S. trade policies, but the truth is simple: Washington will not bear the brunt of this burden — Ottawa’s own citizens will.

The federal government’s strategy not only risks exacerbating inflation but could also tip Canada into recession. As disposable incomes shrink and household budgets tighten, consumer spending — a major driver of economic growth — will decline. Instead of punishing American trade aggressors, Canada is punishing itself.

A more effective response would be to shift the burden onto U.S. consumers by implementing taxes on Canadian exports such as potash, beef, pork grains, and canola oil — commodities that the U.S. heavily relies on. This strategy would maintain leverage over the American market while avoiding unnecessary harm to Canadian households. Instead, Ottawa has chosen to disguise this tax grab as a patriotic countermeasure against the U.S., misleading Canadians into believing that it will make a difference. The government not only collects revenue through the tariffs themselves but also benefits from the additional 5% GST on these higher-priced goods. This is not sound economic policy — it is an economic miscalculation.

At a time when food affordability is already a pressing issue, Canadian policymakers should be seeking ways to support consumers, not further strain them. Provinces and citizens alike must recognize that better tools exist to navigate trade disputes, ones that do not come at the cost of food security and economic stability.

With a new leader set to take charge in Canada within days, the future of these policies remains uncertain. However, one thing is clear: continuing down this path will only lead to greater hardship for Canadian families. It is time for a change in strategy — one that protects Canada’s interests without inflicting unnecessary pain on its own people.

-Dr. Sylvain Charlebois is the Director of the Agri-Food Analytics Lab at Dalhousie University and co-host of The Food Professor Podcast.

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