Tariffs in the United States injure American workers, and retaliatory duties will affect Canadians.
Early in Mel Brooks’s 1974 western spoof Blazing Saddles, Sheriff Bart, faced with a hostile crowd that isn’t very sharp, traps himself to slip away. The humor lands because the premise is so illogical. A parallel, though far less amusing, unfolds in the recent exchange between U.S. President Donald Trump and Canada’s Prime Minister Mark Carney, where the Canadian leader countered protectionist threats by promising to compel Canadians to shoulder steep tariffs on imports from the United States. It plays out with movie-like hysteria, yet it loses its entertainment value once you recognize the benefits of free trade and the futility of hostage-taking one’s own side.
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Countering Self-Inflicted Harm With Self-Inflicted Harm
After trade talks between Canada and the U.S. fell apart over the weekend, the prime minister’s office warned, “at midnight tonight, the U.S. intends to impose a 50% tariff on roughly $28 billion of Canadian goods. Canada will match those tariffs dollar for dollar to protect our workers and businesses.”
Sure enough, in dueling announcements, the White House growled, “Canada has been ripping off the United States for decades—and President Donald J. Trump is done letting them get away with it,” while the Canadian government answered, “effective September 8, Canada will impose counter-tariffs of 15, 25 and 50 per cent on products drawn from those targeted by U.S. Section 338 and Section 232 tariffs, with the rate for each product matching the corresponding U.S. rate.”
It was a striking demonstration of political chest-beating—astonishingly foolish if you understand that tariffs are largely paid by businesses and consumers in the countries that apply them.
“When the US imposes tariffs on imports, businesses in the United States directly pay import taxes to the US government on their purchases from abroad,” Tax Foundation Senior Economist Alex Durante pointed out last year. “The economic burden of the tariffs, however, could fall on others besides the US business directly paying the tax, including foreign businesses selling goods to US businesses (if foreigners lower their prices to absorb some of the tariffs) or US consumers ultimately purchasing the goods (if US businesses raise their prices to pass on the tariffs).”
Businesses and consumers might also substitute goods imported from other countries or produced locally. But there’s often a cost or quality reason they weren’t buying those alternatives to begin with. Ultimately, Americans end up worse off than they were.
Last month, the Federal Reserve Bank of New York reported that in the U.S. “small businesses were particularly challenged by higher tariffs in 2025 to which they mostly responded by passing on higher tariff costs to their customers.”
The same consideration applies to other countries, including Canada. That is, the U.S. government mostly hurts Americans with tariffs imposed on Canadian goods, and the Canadian government mainly harms its own people with retaliatory tariffs. It’s the townspeople vs. Sheriff Bart all over again.
“Think about what retaliation actually means,” comments Quebec-born Vincent Geloso, an economics professor at Virginia’s George Mason University. “Trump imposes a tax on Americans who buy Canadian goods. So our response is supposed to be…imposing a tax on Canadians who buy American goods? How exactly does making Canadians poorer punish Donald Trump?”
“Canadian retaliation will lead to higher costs for our firms and consumers, put additional strain on integrated North American supply chains, and slow overall economic growth on our side of the border,” agree Jock Finlayson and Steven Globerman of Canada’s Fraser Institute.
Holding Canadians Hostage Won’t Deter Trump’s Protectionism
Carney’s defenders north of the border argue that retaliation is the only way to draw American attention—Canada must punish itself with tariffs to persuade the U.S. to back down from its trade barriers. Yet many economists remain unconvinced that such self-imposed pain will prove decisive.
“Retaliatory tariffs will raise the cost of living for Canadian households but are unlikely to weaken Trump’s tariff fixation,” caution Finlayson and Globerman. “Indeed, the Trump administration may respond to any incremental Canadian ‘retaliation’ by announcing further market-access restrictions targeting various Canadian industries.”
“Canadian Prime Minister Carney’s retaliatory tariffs stem from understandable frustration and betrayal but will not alter Trump’s behavior,” adds Competitive Enterprise Institute Senior Economist Ryan Young. “Restraint is tough in the face of such taunts, but it is probably the prudent path.”
Geloso notes that Canada has attempted to counter American protectionism in the past with retaliatory tariffs that did more harm than good: “Canada tried this in the 1930s in response to Smoot-Hawley. It changed nothing for the better. If anything, it deepened Canada’s Depression.”
Worse, Geloso adds, adopting protectionist measures creates an environment in which companies expect and demand special favors: “What you end up with is more protection, more subsidies, higher costs, less competitiveness, and, yes, even more collusion among firms.”
Unilateral Free Trade Is Easy To Enact and Benefits Everybody
Geloso’s counsel to Carney and his team is plain: Canada should respond to American tariffs with a straightforward move—slash our own tariffs and remove trade barriers. And resist the urge to levy counter-tariffs. He stresses that free trade does not depend on the other side reciprocating; historically, a large portion of liberalization has occurred unilaterally.
Among economists, he isn’t alone. Friedman’s own suggestion from years past echoes this sentiment when fears grew that Japan would outdo the United States while closing its markets.
“We only worsen the damage to ourselves—and to them—by adding further restrictions,” Friedman wrote. “The sensible route is to move unilaterally toward freer trade. If they still opt for protection, that’s unfortunate, but at least we have not made things worse for ourselves.”
Undoubtedly, retaliating can be emotionally satisfying, especially when facing Trump’s intimidation. Yet responding to American protectionism with Canadian self-harm produces little good. Carney’s threats against his own people are unlikely to end as well as Sheriff Bart’s on-screen exit.
