EDITORIAL: Common sense on counter-tariffs

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There’s a welcome and growing realization in Canada that responding to U.S. President Donald Trump’s tariffs with dollar-for-dollar counter-tariffs is bad public policy.

While anyone who said this at the outset of Trump’s tariff war against us in February was branded a traitor by our chattering classes — see Alberta Premier Danielle Smith — cooler heads now appear to be prevailing.

Saskatchewan Premier Scott Moe and B.C. Premier David Eby have since joined Smith in questioning the value of broad-based counter-tariffs.

Dollar-for-dollar counter tariffs, which Prime Minister Mark Carney supported when he was running for the Liberal leadership, are no longer federal policy.

In reality, the government has responded with selective counter-tariffs and provided temporary exemptions for Canadian industries heavily reliant on U.S. imports. This makes sense given that counter-tariffs on U.S. imports raise the cost of living for Canadians.

A study by the Montreal Economic Institute last month reported that Canada’s existing counter-tariffs added $1.51 billion in new taxes to Canadians, or $91.50 per household, in April and May alone.

If that trend persists, the study said, the added cost could total $9.1 billion, or $548.97 for every household, by the end of this fiscal year on March 31, 2026.

“Tariffs, whether they are applied unilaterally or in retaliation, are taxes by another name and they squeeze families just the same,” said MEI economist Emmanuelle B. Faubert.

“They artificially drive up the cost of goods imported into Canada and it’s Canadian families and businesses who end up footing the bill.”

During the election, the Liberals said they anticipated getting $20 billion from Canadian counter-tariffs this year, which they said they would use to assist Canadian industries and workers hard hit by U.S. tariffs.

That said, the idea that Canada can win a dollar-for-dollar tariff war against a U.S. economy 10 times the size of ours is wishful thinking, which even the Carney Liberals, despite their “elbows up” election rhetoric, understand.

Only two countries hit by Trump’s tariffs have responded with counter-tariffs — Canada and China — because of the reality that they increase costs for their consumers.

While selective counter-tariffs can be useful, a dollar-for-dollar tariff war with the U.S. would harm Canada in a war we would inevitably lose.

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