{"id":78043,"date":"2026-09-04T12:00:24","date_gmt":"2026-09-04T12:00:24","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2026\/09\/04\/posthaste-canada-is-lowering-itself-with-retaliatory-tariffs-that-will-only-bite-back-report-says\/"},"modified":"2026-09-04T12:00:24","modified_gmt":"2026-09-04T12:00:24","slug":"posthaste-canada-is-lowering-itself-with-retaliatory-tariffs-that-will-only-bite-back-report-says","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2026\/09\/04\/posthaste-canada-is-lowering-itself-with-retaliatory-tariffs-that-will-only-bite-back-report-says\/","title":{"rendered":"Posthaste: Canada is &#039;lowering itself&#039; with retaliatory tariffs that will only bite back, report says"},"content":{"rendered":"<p> \n<br \/><iframe loading=\"lazy\" title=\"U.S. economy is losing momentum: Rosenberg\" width=\"1080\" height=\"608\" src=\"https:\/\/www.youtube.com\/embed\/wjJda5wywOI?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2023\/01\/fp-posthaste-LOGO-01132023.jpg\" title=\"\" \/><\/p>\n<p> Canada will wind up hurting itself with its latest counter-tariffs based on the outcome of retaliatory duties levied nearly 100 years ago, says the Montreal Economic Institute (MEI). <\/p>\n<p> Canada is set to unleash on Sept. 8 $28-billion worth of tariffs ranging from 15 per cent to 50 per cent on imports from the United States. The federal government said the goods targeted will mirror the list of Canadian products hit with 50 per cent tariffs imposed by President Donald Trump on Aug. 22 after trade talks between the two sides broke down. <\/p>\n<p> Ottawa said the Canadian countermeasures will focus on sectors \u2014 including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics \u2014 \u201cthat are most impacted by U.S. tariffs.\u201d <\/p>\n<p> However, the MEI doesn\u2019t think much of Canada\u2019s counterpunch. <\/p>\n<p> \u201cLowering ourselves to Trump-style protectionism won\u2019t help us protect free trade,\u201d Vincent Geloso, senior economist at the MEI and author of a report released on Thursday, said in a release. <\/p>\n<p> The MEI said retaliatory tariffs will harm Canada in a couple of ways. <\/p>\n<p> First, they will increase the cost of imports, resulting in negative economic consequences, including reducing the competitiveness of some exports. <\/p>\n<p> They will also slow growth because they will hinder competitive pressure and any possible gains from scale and specialization. <\/p>\n<p> Counter-tariffs also encourage interest groups to spend money on lobbying to keep the levies in place, diverting resources away from efforts to improve productivity, which is \u201ca far larger drag\u201d on growth, the MEI said. <\/p>\n<p> \u201cNot only are counter-tariffs generally harmful, with major downsides, but the supposed upsides as a policy tool for influencing the trade policies of other nations are tiny, if not nonexistent, for small economies like Canada\u2019s,\u201d it said. <\/p>\n<p> As proof, the MEI looked back to the 1930s when the U.S. instituted Smoot-Hawley tariffs. Canada\u2019s government at the time said it would impose retaliatory tariffs and it ultimately did, affecting 30 per cent of exports from the U.S. with the average tariff increasing around 20 per cent. <\/p>\n<p> Canada eventually repealed its tariffs and a new Democratic government in the U.S. in 1932 changed trade policy with the Reciprocal Trade Agreements Act. <\/p>\n<p> \u201cAt no point did the Canadian counter-tariffs have any discernible effect on American trade policy,\u201d the MEI said. <\/p>\n<p> Royal Bank of Canada also said retaliatory tariffs will raise prices for Canadians, but there is a \u201cnuance\u201d when it comes to counter-tariffs because Canada imports more of the items on the U.S. hit list than it exports. <\/p>\n<p> That means Canadian companies could potentially redirect some of their buys to domestic suppliers, though the more likely outcome is increased costs for companies on both sides of the border since their supply chains are highly integrated. <\/p>\n<p> \u201cBut there is likely more potential for trade flows to reorient within North America to avoid increased tariff costs with these measures than some of the other sector-specific tariffs imposed to date,\u201d RBC said in a note after trade negotiations ended on Aug. 21. <\/p>\n<p> Despite warnings of hardship, Canadians are mostly onside with Prime Minister Mark Carney \u2018s playbook, with 62 per cent supporting the counter-tariffs, calling them \u201cright under the circumstances,\u201d according to a recent poll by the Angus Reid Institute. Three in four people also backed Carney\u2019s decision to call off talks. <\/p>\n<p> Nearly two in 10 said they were very worried or somewhat worried about their jobs given the latest developments on the trade front, but 64 per cent indicated they think Canada will come out stronger from this challenge. <\/p>\n<ul class=\"related_links\">\n<li>Posthaste: Markets predict three Bank of Canada rates hikes are coming and some economists agree<\/li>\n<li>Posthaste: AI boom could triple data centre water consumption this decade, warns energy researcher<\/li>\n<\/ul>\n<hr \/>\n<p> <em><strong> Sign up here to get Posthaste delivered straight to your inbox.<\/strong><\/em> <\/p>\n<hr \/>\n<p> <strong><br \/> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-1758646\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2019\/02\/subhead_leading.png\" width=\"838\" \/><\/strong> <\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/09\/July-2026-trade--1.png\" title=\"\" \/><\/p>\n<p> Canada\u2019s trade surplus sharply narrowed to $769 million in July from $4.2 billion in June, driven by a decrease in gold exports to the United States. <\/p>\n<p> Total exports decreased 2.3 per cent in July, the first decline in six months, according to Statistics Canada on Thursday. Exports of metallic and non-metallic mineral products were one of the categories that posted the largest declines \u2014 8.5 per cent \u2014 due to lower purchases of Canadian-held gold by foreign residents and lower gold shipments to the United States. <em>\u2014 Paula Tran, Financial Post<\/em> <\/p>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\">\n<hr \/><\/div>\n<\/section>\n<section class=\"story-v2-content-element article-content__content-group article-content__content-group--story\">\n<div class=\"story-v2-content-element-inline\"><\/div>\n<\/section>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/07\/subhead-1.jpg\" title=\"\"><\/p>\n<ul>\n<li><strong>Today\u2019s Data<\/strong>: Canada and U.S. job numbers for August<\/li>\n<li><strong>Earnings: <\/strong>The Children\u2019s Place, Skechers USA Inc.<\/li>\n<\/ul>\n<p> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-3080180\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/07\/subhead_marketsam.jpeg\" width=\"838\" \/> <\/p>\n<p><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2026\/09\/chart-0904-ph.jpg\" title=\"\" \/><\/p>\n<figure class=\"embedded-image\"><\/figure>\n<hr \/>\n<p> <strong><img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-3080181\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2022\/07\/subhead_reads.jpeg\" width=\"838\" \/><\/strong> <\/p>\n<ul>\n<li>This deal has cut violence against women on factory floors, but some clothing brands still won\u2019t sign on<\/li>\n<li>Charles St-Arnaud: Trump\u2019s Venezuelan oil deal is further proof Canada needs to diversify \u2014 now<\/li>\n<li>Lululemon reports drop in sales and revenue in second quarter, revises outlook<\/li>\n<li>Bank of Canada\u2019s new $20 bill features new security features and Canadian, Indigenous motifs<\/li>\n<\/ul>\n<p> <img loading=\"lazy\" decoding=\"async\" alt=\"\" class=\"aligncenter size-full wp-image-2059284\" height=\"114\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2020\/04\/subhead_personal_finance_2.png\" width=\"838\" \/> <\/p>\n<p> High income U.S. citizens living in Canada and dual residents beware: two tax court decisions imply that you could face an effective marginal tax rate of more than 57 per cent on any investment income you earn under the U.S. net investment income tax. Read tax expert Jamie Golombek\u2019s column here to find out more. <\/p>\n<hr \/>\n<p> <span><\/span><img decoding=\"async\" alt=\"\" data-has-syndication-rights=\"1\" data-license-id=\"\" data-portal-copyright=\"\" src=\"https:\/\/smartcdn.gprod.postmedia.digital\/financialpost\/wp-content\/uploads\/2025\/11\/FP-West-Energy-Insider-Logo.png\" title=\"\" \/> Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country\u2019s most important sectors. Sign up here. <\/p>\n<hr \/>\n<div class=\"x_elementToProof\">Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com<span><\/span><span> with your contact info and the gist of your problem and we\u2019ll find some experts to help you out while writing a Family Finance story about it (we\u2019ll keep your name out of it, of course).<\/span><\/div>\n<hr \/>\n<h2>McLister on mortgages<\/h2>\n<p> Want to learn more about mortgages? Mortgage strategist Robert McLister\u2019s Financial Post column  can help navigate the complex sector, from the latest trends to financing opportunities you won\u2019t want to miss. Plus check his mortgage rate page for Canada\u2019s lowest national mortgage rates, updated daily. <\/p>\n<hr \/>\n<h2>Financial Post on YouTube<\/h2>\n<p> Visit the Financial Post\u2019s YouTube channel for interviews with Canada\u2019s leading experts in business, economics, housing, the energy sector and more. <\/p>\n<hr \/>\n<p> <em>Today\u2019s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff and Bloomberg.<\/em> <\/p>\n<p> Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com . <\/p>\n<hr \/>\n<p> <em><strong>Bookmark our website and support our journalism:<\/strong> Don\u2019t miss the business news you need to know \u2014 add financialpost.com to your bookmarks and sign up for our newsletters here<\/em> <\/p>\n<p><\/img><br \/>\n<br \/>\n<br \/>Posthaste: Canada is &#039;lowering itself&#039; with retaliatory tariffs that will only bite back, report says<\/a><br \/>\n<br \/>2026-09-04 12:00:24<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Canada will wind up hurting itself with its latest counter-tariffs based on the outcome of retaliatory duties levied nearly 100 years ago, says the Montreal Economic Institute (MEI). Canada is&#8230;<\/p>\n","protected":false},"author":2,"featured_media":78044,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31],"tags":[],"class_list":["post-78043","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy"],"_links":{"self":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/78043","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/comments?post=78043"}],"version-history":[{"count":0,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/posts\/78043\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media\/78044"}],"wp:attachment":[{"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/media?parent=78043"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/categories?post=78043"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pantheregroup.com\/api\/wp\/v2\/tags?post=78043"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}