⚖️ Canada Signals No Retaliation—and May Even Lower Tariffs
August 10, 2025
Prime Minister Mark Carney confirmed this week that Canada will not retaliate against recent U.S. tariff threats, at least not for now. While Trump has floated a sweeping 35 percent tariff on Canadian goods not covered by USMCA, Carney’s government is leaning toward de-escalation.
In fact, not only has Canada avoided announcing countermeasures, it’s reportedly reviewing some of its own food tariffs—including longstanding protections on U.S. dairy and poultry.
Prime Minister Carney noted that his government is looking for the most "effective" way to support Canadian industry, which in some cases, may mean removing tariffs that are hurting domestic businesses. He emphasized that Canada's response won't be an automatic, dollar-for-dollar reprisal, as the government has in the past. This new approach signals a pivot away from direct retaliation towards a more pragmatic strategy aimed at minimizing harm to Canada's economy.
Our Take: Removing long-standing protections like those in Canada’s supply-managed dairy sector would have massive, far-reaching consequences. For decades, supply management has been a cornerstone of Canadian agricultural policy, supporting stable pricing, rural economies, and domestic production. A shift here wouldn’t just affect farmers—it could ripple through the entire food ecosystem. Foreign pizza chains, for example, currently rely on Canadian cheese because of consistency and availability. Would that still hold true if cheap U.S. dairy flooded the market?
At the same time, this may be the price of survival. Like it or not, Trump holds a trump card—and if Canada wants to secure a stable trade footing in a volatile environment, some concessions may be necessary. The question is not whether we’ll have to give—but what we’re willing to give up. Dairy might just be on the table.
Other stories from this week: