Canada to impose retaliatory tariffs worth $22B on US
What's the story
In a major development in the US-Canada trade war, Canada will impose retaliatory tariffs worth C$29.8 billion (about $22 billion) on the United States.
The move comes after US President Donald Trump recently imposed higher tariffs on steel and aluminum imports from Canada.
The new levies come into effect today, after previous exemptions and duty-free quotas expired.
Trade dynamics
Canada is biggest foreign supplier of steel, aluminum
Canada is the largest foreign supplier of steel and aluminum to the US.
The trade war between the two nations has escalated as Canadian Prime Minister Justin Trudeau gets ready to hand over power to his successor Mark Carney this week.
Carney recently won leadership of the ruling Liberals but said he can't engage with Trump until his official swearing-in as PM.
Market impact
Trump's tariff threats trigger swift market response
Trump's announcement to double tariffs on Canadian metals products from 25% to 50% triggered a swift reaction in financial markets.
The S&P 500 index briefly dropped 10% from its record closing high of February 19, marking what is commonly known as a market correction.
However, stocks rebounded after Ontario Premier Doug Ford agreed to suspend his proposed surcharge on electricity supplied by Canada to US homes.
Economic outlook
Trump remains unfazed by market fluctuations
Despite the market fluctuations, Trump remained undeterred, saying markets would go up and down. He reiterated his focus on rebuilding the economy.
The US President also hinted at potential increases in tariff rates, saying such moves could incentivize countries to relocate manufacturing operations to the US.
"The higher it goes, the more likely it is they're going to build ... The biggest win is not the tariffs," he said.