Think tank urges Canada to resist U.S. tariffs and outlast the trade standoff
Vincent Geloso of the Montreal Economic Institute advises Canadian leaders to shun retaliatory tariffs and simply endure the current U.S. trade measures.
In a new research note, senior economist Vincent Geloso of the Montreal Economic Institute contends that Canada’s best response to the United States’ recent Section 338 tariffs is to avoid retaliation and outlast the pressure. He points to the 1930s, when Canada imposed two rounds of counter-tariffs that failed to move U.S. policy but inflicted significant domestic damage, especially through falling export prices. Geloso notes that the impasse was ultimately broken when a change in U.S. leadership brought Franklin Delano Roosevelt to power, who then pursued free-trade policies.
While acknowledging differences in today’s targeted tariffs, he recommends that Prime Minister Carney concentrate on mitigating immediate harms, for example by reducing regulatory burdens, and let the U.S. tire of its own measures. Geloso warns against a “jingoist” stance, urging an “adult” strategy of patience.
Why it matters
Canada's trade strategy will affect its economy and the broader North-American market.
How this story developed
- Aug 24 Trump threatens 50% tariffs on Canadian vehicles and parts starting 2027
- Aug 25 Canada is preparing a counter‑tariff schedule to be unveiled in early September.
- Aug 25 Canada announced retaliatory tariffs to begin on Sept 8.
- Aug 26 Retailers have begun removing U.S. wines and spirits from shelves as part of the boycott campaign.
- Aug 27 The United States began reviewing possible bans on Canadian imports under Section 338.
- Aug 29 Canada set a 25% levy on certain American vehicles and matched the U.S. 50% level on steel and aluminium, also targeting plywood, screws and other timber items.
- Aug 30 Donald Trump posted an AI-generated clip showing himself swapping a Lake Ontario sign for a "Lake America" banner, while tensions over his tariffs on Canada continue.
- Aug 31 Trump urged Canadian firms to relocate to the United States and labeled Canadian leadership the worst he has encountered.
- Aug 31 Trump warned the duty on Canadian automobiles will rise to 50% on Jan. 1 and offered tariff relief to firms that relocate to the United States.
- Aug 31 Mark Carney described the dispute as an attack and said Canada must respond as if at war.
- Sep 1 Voters in Beaches-East York, Chicoutimi-Le Fjord and North Vancouver-Capilano will decide three federal seats tonight, a key gauge of Prime Minister Mark Carney's government as a U.S. trade dispute escalates.
- Sep 1 Liberals have now won all three contested ridings.
- Sep 3 Apple Maps switched to the new lake name for U.S. users.
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