Economist Peter Schiff is not a fan of Canada's latest move in the escalating trade war with the U.S. He took to X on Tuesday to call out Canadian Prime Minister Mark Carney's decision to slap retaliatory tariffs on American goods, arguing that while it might play well politically, it's a disaster for Canada's economy.
Schiff highlighted that Carney's tariffs, which range from 15% to 50% on about 700 U.S. products, are a direct response to President Donald Trump's 50% tariffs on certain Canadian goods. "This may be good politics for Carney, but it's bad economics for Canada," he wrote.
Canadian Finance Minister François-Philippe Champagne announced the tariffs on Tuesday, saying they would cover roughly $20 billion of U.S. goods. Existing tariffs on U.S. steel and aluminum will double to 50%, and other U.S. products will face tariffs between 15% and 50%. The measures take effect on September 8.
Carney later confirmed the move, calling the U.S. tariffs "unjustified." He also announced that Canada is adding $7.5 billion in new support for affected workers and businesses, on top of nearly $25 billion already allocated since earlier U.S. tariffs began.
This retaliation is aimed at Trump's planned 50% tariffs on Canadian autos, trucks, auto parts, and steel. Schiff had previously warned that Trump's tariffs would hit American consumers hard, making goods they rely on "vastly more expensive" and intensifying the "government-created cost of living crisis."
Schiff isn't alone in his concerns. Senate Minority Leader Chuck Schumer (D-N.Y.) and other U.S. Democrats have criticized Trump's tariffs on Canadian goods, warning they could raise prices for American consumers, manufacturers, and farmers. Schumer called the policy "economic warfare" against a close U.S. ally and urged Republican lawmakers in states heavily dependent on Canadian trade to oppose the tariffs. Illinois Gov. JB Pritzker also stressed Canada's importance as a major trading partner for his state.
So, while the political posturing continues, the economic fallout is becoming clearer. Both sides are digging in, but the real cost may be borne by everyday consumers and businesses on both sides of the border.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.
