US and Canada may avoid all-out trade war, analysts say

The U.S. and Canada have escalated their trade conflict with new retaliatory tariffs, but analysts believe the longtime allies may eventually reach a deal to avoid an all-out trade war despite current tensions. Canadian Prime Minister Mark Carney responded to new 50% U.S. tariffs by imposing duties on about $20 billion of American imports, while Ontario Premier Doug Ford threatened to cut electricity and mineral shipments. The tariffs cover only about 5% of Canada's exports, and Carney's retaliation won't take effect until Sept. 8, leaving time for negotiations. The two countries conducted $880 billion in trade last year, with Canada sending 72% of its exports to the U.S. Experts note that U.S. voters associate tariffs with higher living costs, and the conflict threatens the USMCA trade agreement renewal.