Some countries aren't retaliating against Trump's tariffs. Should Canada 'turn the other cheek'? | CBC News (2025)

Faced with tariffs imposed by U.S. President Donald Trump, some countries have, so far, responded by turningthe other cheek, and not retaliatingwith their own duties.

Canada, however, continues to hit back in the trade war with its neighbour to the south.But it also raises the questionofwhether Canada absorbing the blows from U.S. tariffs, while painful, might be preferable to the overall economic damage from a full-scale trade conflict.

It's an issue, perhaps unsurprisingly, on which economists have varying views. Some say Canada has no choice but to retaliate, even if imposing tariffs on U.S. goods will increase prices for Canadians.But others suggestthose moves mayhave little impact on the U.S.

Werner Antweiler, associate professor and chair in international trade policy at the University of British Columbia, says Ottawa was right to return fire.

"Retaliation is actually necessary, even though it's harmful to our own economy, because it makesprices higher for Canadian consumers and businesses," he said.

But Pau S. Pujolas, an associate professor or economics at McMaster University, says he believes Canada doesn't need to spend its time "fighting tariff with tariff."

WATCH | Ottawa retaliates against U.S.:

Instead, he says the economywould be better helped by removing interprovincialtrade barriers and untangling the red tape hampering some of Canada's trade agreements with other countries

"I would frankly say, look, let the Americans shoot themselves in the foot, let them destroy their firms …that rely on Canadian products, let themdestroy all that. And let's move on."

'Compelled to retaliate'

Like any tariffs, Canada's retaliations against the U.S. fall almost entirely on Canadian consumers, and will hurt the economy here, not there, saysTrevor Tombe, an economics professor at theUniversity of Calgary.

"That's not to say we should or shouldn't do them, just that the decision to retaliate needs to be firmly based on achieving non-economic objectives,"such as in the political arena, he said.

He sees retaliation as"more of a political action to shape the conversation, narrativeand public relations campaigns," against, in this case, the Trump administration.

They have limited ability to actually affect the U.S. economy, he said in an email to CBC News.

And yet,Canada said Wednesday it would retaliate with tariffs on$29.8 billion worth of American goods after Trump imposedtariffs on all imported steel and aluminum. That'sinaddition tothe tariffs on $30 billion worth of American goods already levied after Trump's initial tariffs last week.

Meanwhile, Ottawahas threatened tariffs on an additional $100 billion worth of U.S. goods if Trump pushes through his reciprocaltariffs on April 2.

"I think Canada feels compelled to retaliate," because it relies on the U.S. market for the goods Trump has targeted,said Peter Morrow,associate professorof economics at the University ofToronto'sMunk School of Global Affairs and Public Policy.

"Roughly 90 per centof Canadian steel or aluminum exports go to the U.S.So Canada really can't sit around and do nothing. Canada has to sort of develop some bargaining position."

However,some countries like the United Kingdom, Australia and Mexico that haverefrained from retaliation have their own reasons for not yet pulling the tariff trigger,Antweiler says.

The U.K., for example, is looking for new post-Brexit trade arrangements and, importantly,a free trade deal with the U.S., he says.As well, the government ofPrime Minister Keir Starmer is looking for some kind of agreement with the U.S. regarding Ukraine, so it does not want to alienate Trump.

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Starmerhas said that while all options are on the table, he would take a "pragmatic response" and not hit back after the U.S. slapped tariffs on steel and aluminum imported from any country.

In Trump's first term, Australia was able to get an exemption from tariffs he imposed in 2018 and may be hoping to get another to this latest round, Antweiler says.

Derek Holt, vice-president and head of capital markets economics for Scotiabank, addsthat countries like the U.K.and Australia are not in the same situation as Canada.

"It's easier for Australia and the U.K. to turn the other cheek because they have much less at stake, given less exposure to trade with the U.S.," he said in an email.

About one-fifth of U.K. exports go to the U.Sand a good chunk of that is financial services, he says. Australia's exports to the U.S.are only about four per centof itstotal exports.

Diplomatic inroads

Although Trump made Canada and Mexico the targets of his initial tariffs, MexicanPresident Claudia Sheinbaum appearsto have made diplomatic inroads with him, while relations have remained frosty between Canada and the U.S.

Ottawa has a free trade agreement with Washington and has remained in talks— attempting a diplomatic solution— as this crisis developed,says Sylvanus Afesorgbor, an associate professor at the Universityof Guelph in the department of food, agricultural and resource economics.

That's whyAfesorgbor believes retaliation is"very justified."

"There's nothing we can do anymore," he said. "We've exhausted every medium of negotiation. So we are pushed to the wall."

But he cautionsthat officialsneed to be careful not to justblanket all U.S. goods with tariffs.

"You have to be very selective," Afesorgbor said,addingthat he believes federal officials have the experience to tariff imports that can be replaced by Canadian producers.

For example, it would be a really bad idea to slap tariffson U.S. importsthat Canada really relies on,like pharmaceuticals, Morrow says. However something like U.S. liquor actually makes sense.

"Canadians won't be that much worse off. They can still have plenty of options. But U.S. producers now have lost sales," he said.

"Sometimes it's super obvious. But othertimes it's actually pretty difficult to say 'OK, what are thegoods where we have other options? And what are goods where the U.S. relies on us for a market?' "

So far,Canada is doing it right, not imposing blanket, dollar-for-dollar tariffs,but focusing instead onareas that can minimize harm toCanadian consumers,Antweiler says.

"We're looking at sectors where we have easy domestic substitutes, or third country substitutes," he said. "It's all really focused on harm reduction."