CALGARY — With the Liberal government announcing counter-tariffs against the United States amid an escalating trade war, some analysts warn Ottawa’s response could raise prices at home without inflicting enough economic or political pain to change US policy.On Tuesday, Ottawa announced dollar-for-dollar counter-tariffs on $27.6 billion worth of US goods, which will take effect on September 8, as well as $7.5 billion in support for Canadian workers and businesses.While political leaders including Manitoba Premier Wab Kinew and BC Premier David Eby praised the move, Conservative Leader Pierre Poilievre said Canada should lower taxes during the ongoing conflict.University of Calgary economist Trevor Tombe estimates Canada could lose approximately 90,000 jobs—about 0.4% of total employment—if the US tariffs remain in place for several months.“Not a recession-scale shock, but certainly for the individuals involved, a pretty significant cost to be borne,” he told the National Post.Tombe said retaliatory tariffs have one primary objective: changing American behaviour..Carney allegedly withdrew Keystone XL offer during US trade talks.For that strategy to succeed, Ottawa must target products that are politically important in the US, particularly in swing states ahead of the upcoming midterm elections, and that Canadian importers can easily replace.“There’s just not a lot of items that tick all [the] boxes,” he said.While some products meet those conditions, Tombe said there are not enough to support the scale of retaliation previously contemplated by Ottawa.“For the most part, tariffs are paid by Canadians, not Americans,” he said.“Tariffs are sometimes communicated as a tax on a foreign country, but they are very much a tax on ourselves.”Fergus Hodgson, director of Econ Americas and publisher of Impunity Observer, told the Western Standard he strongly opposes the Liberal government’s decision to escalate the dispute through retaliatory measures.“I don't think the measures that have been put forward have the venom to really make the Americans care or impose a political cost on Donald Trump,” Hodgson said.“You could potentially cause pain for the Americans, but it would come at a huge cost to Canadians as well.”Hodgson believes that rather than escalating the dispute, Canada should use pressure from the US to reconsider domestic policies that have long irritated Washington, including Canadian-content requirements in media and supply management.“My conviction in this trade dispute or conflict is that, tragically, we actually need this pressure from the Americans to help us help ourselves,” Hodgson said, arguing Canada is imposing economic costs on itself to protect politically favoured industries..ANALYSIS: Alberta oil risks becoming collateral damage in Ottawa’s trade war.Supply management, in particular, came under fire from Hodgson, who said it and other Canadian restrictions reminded him of a “Soviet planned economy.”“I know many people get nostalgic for these things and have a rosy view of these small farms and Canadian producers, but I think the price you're paying to maintain these cartels or protections is a very high one,” he said.“I've spoken so adamantly against supply management that I think it would be a wonderful boon for Canada to open up those markets.”Hodgson also questioned Ottawa’s efforts to reduce Canada’s economic dependence on the US by developing closer trading relationships with Europe and China.He argued the US has advantages that other potential trading partners cannot easily replicate, including geographic proximity, cultural similarities and a highly productive and innovative economy.“The idea that we're going to replace the United States with the European Union and China is — I wouldn't say it's a fairy tale — but it's a long shot,” Hodgson said.
