The US and Canada appear no closer to resolving their ongoing trade dispute.
Tensions have been simmering between the two neighbours since President Donald Trump returned to the White House just over 18 months ago, and unleashed a wide-ranging global programme of tariffs.
Canada was one of the first countries the Trump administration hit with levies, and is one of two countries to respond with its own reciprocal measures.
Currently, the US has hit Canada’s key sectors of steel, aluminium, lumber and automobiles with tariffs, and last week imposed an additional 50% levy on about C$28bn ($20bn; £15bn) of Canadian goods.
Canada has hit back with its own counter-tariffs on American goods, announcing on Tuesday what it calls a “dollar-for-dollar” and “strategic” retaliation designed to match the US tariffs.
With no resolution in sight, how has this enduring trade war affected Canada and the US, and what could come next?
Here are five charts to help break it all down.
The US economy is much larger and the impact of Canada’s counter-tariffs won’t be as stark.
But some states will feel the pain of Canada’s retaliation more than others, with tariffs levied on C$28bn worth of US goods from steel to furniture, cosmetics and toilet paper, as of 8 September.
According to data by Statistics Canada, the swing state of Ohio will be hardest hit, with C$3.2bn – or 12% – of its exports soon to be tariffed by Canada, followed by Illinois and Pennsylvania.
For Ohio, it’s the tax on steel that will particularly hurt, as well as the tax on laundry machines. In Illinois, where farm equipment giant John Deere is based, it will be the new tariffs on farm and construction equipment.
Derek Holt, an economist with Scotiabank, noted that Canada’s counter-tariffs appear to be “very deliberately oriented” towards some swing states that could decide the US balance of power in the upcoming midterm elections.
Some businesses are adapting to find customers elsewhere.
Matteo Sgaramella, who owns Toronto-based menswear clothing company Outclass, told the BBC he has started attending trunk shows in Paris instead of New York, helping him reach more customers in Europe.
“The reception has been amazing,” he said, adding that some European stores are particularly enthused about supporting Canadian products due to the ongoing trade war with the US.
“We’re kind of seen as the one country that’s kind of standing up to the Americans right now,” Sgaramella said.
Other businesses, however, are struggling to diversify their trade, particularly in Ontario manufacturing sectors that are deeply integrated with the US.
A recent report by the Canadian Chamber of Commerce pointed out three such regions in Ontario – Oshawa, London and Kitchener-Cambridge-Waterloo – as being particularly vulnerable.
“These cities remain heavily tied to the US market, while growth in exports outside the US has been limited or insufficient to offset broader weakness in trade activity and local economic conditions,” the report said.
While some businesses are lagging, foreign direct investment into Canada hit C$96.8 billion in 2025, the highest inflow of capital to the Canadian economy since 2007.
Canada’s economy also strongly rebounded in the second quarter of 2026 to 3.3% growth in the country’s GDP, thanks to a jump in exports and domestic investment.
These latest figures have warded off recession concerns, at least for now.
Carney is hoping to attract even more investment. In September, his government will host the first-ever Canada Investment Summit, bringing major investors, CEOs and business leaders to Toronto for two days.
