Morning. So much for literally bridging a divide. In focus today, we look at how U.S. President Donald Trump is ramping up his trade war with Canada, just days after winning a concession over a major new border crossing.
Up first
In the news
Mideast: Iran attacked a tanker in the Strait of Hormuz early today, while the United States conducted yet another round of air strikes targeting the Islamic Republic. Earlier, Iran-backed rebels in Yemen said they planned to prevent Saudi Arabia from shipping in the Red Sea.
Trade: Carney offered to double oil exports to U.S. as part of potential deal, Hoekstra says.
Economy: Bulk investor buying helps resuscitate condo purchases in the Toronto region.
Trump, Mexico President Claudia Sheinbaum and Carney at the World Cup final on Sunday.MANDEL NGAN/AFP/Getty Images
In focus
So close, yet so far
Less than five days after winning a deal that secured immediate revenues from Canada’s new $6.4-billion bridge to Michigan, the White House is striking out at Canada over autos, alcohol and cheese.
In three proclamations signed late yesterday, Donald Trump became the first U.S. President to invoke a section of the Tariff Act of 1930 allowing him to impose sweeping retaliatory duties on any nation deemed to be treating American commerce unfairly.
Why now?
The administration noted that Canada was one of the only countries other than China that retaliated against Trump’s previous tariffs and must be held accountable. I would note that Canada is the only other country sharing the world’s longest undefended border and decades of free trade built upon increasingly integrated manufacturing sectors, so the stakes are somewhat higher.
Trump also complained on Friday about smoke from Canadian wildfires hanging over American cities. He said he raised the matter with Prime Minister Mark Carney at Sunday’s World Cup final.
The tariffs take effect on Aug. 19 and will not include an exemption for goods trading under the United States-Mexico-Canada Agreement.
What the new tariffs cover
If you had to read that last sentence a few times, you are not alone. And I wrote it! The trade deal remains in place, even after the U.S. said earlier this month it will not renew the continental free-trade agreement for another 16-year period.
But Section 338 allows the White House to penalize countries it deems to be discriminating against American commerce – removing a key protection for Canadian exporters throughout the dispute.
Affected products include wine, hockey sticks and cement. It’s a long list – and one bound to spark more uncertainty and confusion – but not necessarily curtains for the Canadian economy. With 30 days before the new tariffs kick in, economists at TD Bank wrote this morning, “we see this as a negotiating tactic.”
U.S. Trade Representative Jamieson Greer’s office said the tariffs would apply to nearly US$20-billion worth of Canadian goods, roughly five per cent of the country’s exports to the U.S. That means the average tariff rate applied to Canadian products could rise by just over two percentage points.
“This would undoubtedly be painful for the affected Canadian industrial sectors, but should be substantially less damaging to the economy than initially feared,” Corpay chief market strategist Karl Schamotta wrote last night in a research note to clients.
What’s still protected
The tariffs will not apply to oil, gas, potash, fish or critical minerals, even though energy is the main source of the U.S.’s goods trade deficit with Canada, The Globe’s team reports.
The disputes
The Trump trade team has been focused on a few bugaboos:
- Booze: Washington is taking aim at provinces – specifically Ontario and Quebec – over their refusal to sell U.S. wine and spirits.
- Cars: The White House says Canadian imports of U.S. vehicles dropped 22 per cent after Ottawa rolled out its own retaliatory taxes on American-made autos.
- Dairy: The taxes on Canada’s supply-management system are aimed at rules that limit U.S. companies from accessing duty-free cheese quotas – perhaps Trump’s longest-held trade grievance.
But, what about the bridge deal?
A 15-year side deal struck last week by Canada and the U.S. on the new Gordie Howe International Bridge will see Ottawa cut Washington cheques that amount to half the toll revenues minus operating costs for the span connecting Windsor and Detroit.
The multibillion-dollar bridge, financed solely by Canada, is slated to open on July 27. After stalling its opening for months, Trump called the profit-sharing arrangement a “MUCH BETTER DEAL for America” on social media.
What Canada has cut so far
In earlier bids to ease friction, Ottawa has axed two major trade irritants – the digital services tax and a tax hike on online streaming services.
But these offerings aren’t even viewed as concessions.
“I’m glad they did that but they don’t really get credit for doing something bad and then undoing it,” Greer said in a speech last week.
It’s hard to see how changes in supply management or restocking shelves with Woodford Reserve would be viewed any differently.
See you in court?
The U.S. judiciary has struck down other recent attempts by the administration to levy sweeping tariffs, so it’s not unlikely the courts will hear about Section 338.
- February 2026: The U.S. Supreme Court struck down broad global tariffs, ruling 6-3 that the administration couldn’t use the 1977 International Emergency Economic Powers Act to create import taxes.
- May 2026: The U.S. Court of International Trade ruled against the administration’s backup plan, striking down a 10-per-cent universal tariff.
Charted
Constant craving
At the end of June, Bell Media’s streaming service had just over five million subscribers – up 330,000 from the previous quarter – and has since added a further 30,000 to reach 5.1 million. In one major success, the Bell added 400,000 net new subscribers in the quarter when it released its popular series Heated Rivalry.
Bell’s growth targets for media are relatively modest, Irene Galea and Andrew Willis report, in part because the growth of its digital assets like Crave have been moderated by those of its legacy media divisions, like radio and traditional television.
Quoted
I’m very happy. I’ve slept three or four hours, but for the team, I’ll do whatever it takes.
— Victor Álvarez, 19
Spain’s World Cup champions return home to a crowd of almost two million for a parade through Madrid. (I would love four regular hours of sleep.)
Up next
More files we’re following
Staying currency: We’ll be locked on the loonie, which sank on the tariff news last night.
Wildfire watch: As fires continue to spread across northern Ontario, the province is calling for a national fire strategy and criticizing Trump for not helping the province.
Morning update
Global markets climbed as renewed mediation efforts in the Middle East lifted sentiment, while investors looked ahead to corporate earnings.
Wall Street futures were in positive territory, and TSX futures followed sentiment higher.
Overseas, the pan-European STOXX 600 was up 0.5 per cent in morning trading. Britain’s FTSE 100 rose 0.24 per cent, Germany’s DAX gained 0.51 per cent and France’s CAC 40 advanced 0.36 per cent.
In Asia, Japan’s Nikkei closed 3.26 per cent higher, while Hong Kong’s Hang Seng slipped 0.04 per cent.
The Canadian dollar traded at 71.11 U.S. cents.