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Canada-US trade dispute and tariff escalation

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2026-09-04 19:31 UTC → 2026-09-10 18:41 UTC · added ~~removed~~

A trade dispute between Canada and the United States has escalated following the breakdown of negotiations in August. In response to the impasse, Washington imposed duties on approximately $28 billion worth of Canadian products. Canada scheduled counter-tariffs on nearly $28 billion of U.S. goods to begin on September 8, while U.S. President Donald Trump has threatened to increase tariffs on Canadian automobiles from 25% to 50% in the coming year. The economic impact of these tensions is becoming evident. Canadian merchandise exports fell 2.3% in July, marking the first monthly decline in six months. This decline was driven by reduced volumes and lower prices ~~and volumes~~ for gold, oil, and natural ~~gas. This decline resulted~~ gas, resulting in a merchandise trade surplus of $769 ~~million, a~~ million—a significant drop from the $4.2 billion recorded in June. ~~Furthermore,~~ Canada also reported the loss of 42,000 jobs in August, ~~ending~~ reversing a four-month period of ~~employment growth.~~ growth that had added 181,000 positions since April. While the national unemployment rate remained stable at 6.4%, sector-specific shifts were noted: the public sector lost 20,000 positions, while the manufacturing sector showed unexpected resilience by adding 22,000 jobs. Bank of Canada Governor Tiff Macklem noted that while exports and investment had previously rebounded, trade tensions with the United States may ~~lead~~ cause companies to delay hiring and investment. Additionally, average hourly wages grew by only 2% year-over-year, the slowest pace since late 2017, excluding the pandemic-distorted year of 2021.

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