(OTTAWA, ONTARIO) – Canada’s retaliatory tariffs of up to 50% on approximately $19.8 billion worth of US goods came into effect this Tuesday, further escalating the trade war between the two neighbours. The move underlines Ottawa’s decision not to back down in the face of Donald Trump’s tariffs.
Prime Minister Mark Carney’s government is now imposing import taxes of 15% to 50% on hundreds of American products. Consumer goods such as motorcycles, some cosmetics, and cheese are affected, alongside industrial items like steel, which will see tariffs increase to 50% from 25%. No new meetings are scheduled to attempt to resolve the conflict.
While Carney’s position is popular among Canadians, the trade war will have a cost. A study by Oxford Economics found that the trade war, including this latest round of retaliation, might protect some domestic manufacturers but leave many industries worse off. In 2027, output is estimated to be reduced by 0.3% in Canada and consumer prices are expected to rise by 0.5%.
The US administration has threatened additional measures. Donald Trump took to social media on Monday to target Canadian aircraft manufacturer Bombardier. He said, “No more selling Bombardier in the United States,” claiming they “live off American buyers.”
However, Bombardier is not solely dependent on the US but is interdependent with it. The company has employees in more than 20 states and provides work to 2,800 American suppliers. The Global 7500 business jet is assembled in Toronto, but many of its parts are manufactured in the US. Its wings come from Texas, the avionics system is built in Iowa, and its motors are shipped from Indiana.
In Iran, more than six months of war with the United States and Israel have battered the nation’s economy. The Iranian government is raising petrol prices for heavy users. Those who exceed a monthly quota of 110 litres will see per litre prices roughly double. The move comes amid record high fuel consumption and an ongoing American blockade.
Tehran hopes the hike will reduce demand, but it could further drive inflation. As a major oil producer, cheap fuel has long been seen as an expected entitlement in Iran. The country has some of the lowest retail petrol prices in the world. The latest hike brings the price of a litre to just around 7 US cents, or approximately 5 pence.
The state oil firm says the change will only affect around 15% of consumers. However, it is the second such hike since December, and purchasing power has already been severely eroded as the value of Iran’s currency, the rial, has fallen to record lows. Iranian consumers are already facing an official annual inflation rate of 67%. The government says the extra money raised will be distributed to households.
In European business news, French firm Mistral AI said this Tuesday it has raised €3 billion in its latest round of fundraising, approximately $3.3 billion or £2.6 billion. This is the largest ever round of European tech equity fundraising and was backed by Samsung Electronics. The funding values the company at over €21 billion, approximately $23.1 billion or £18.1 billion, up from €12 billion in the last round.
New financing will help the company expand its leading edge research, focusing on open weight AI models that companies can run themselves with their own data. Mistral is positioning itself as a sovereign European AI solution compared to US or Chinese competitors.
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