I don't know how this tariff stuff works, so for my own understanding, how come countries retaliate to US tariffs by imposing retaliatory tariffs? Are they punishing their own nationals?
But economic considerations are not the only ones. Opposition to the American Revolution is a fundamental theme in Canadian history. People shouldn't be surprised when Canada acts accordingly.
There are no winners in the trade war.
Not after factoring in the 35%-50% tarrif Trump has imposed on many Canadian goods.
In the same way that Trump is punishing Americans with the import tariffs, yes. However that is just the primary effect, not the goal.
If you eat less you might go hungry, but that doesn't mean the goal was to go hungry. Rather it was to lose weight, and going hungry is just the direct effect.
Part of the goal of retaliatory tariffs is symbolic, part is to indirectly put pressure on Trump by affecting US export industry.
That is a very simplistic way of looking at it.
Tariffs are taxes on exports and like every tax tool it has its specific purpose.
Lets say US for example has surplus diary. It can export the surplus to other countries. Without tariff the only barrier is the exchange rate. If the diary prices are cheaper than local produce, US diary takes over the market and the US farmers make bank.
Canadian government might want to protect local diary industry. Or Canadians might have concerns about the chemicals in US diary. They have more stringent requirements from their farmers. Either way they raise tariffs for US diary products so that is on par or costlier than local produce.
Tariffs are normally a precision tool. Countries target specific goods and industries.
Now what Trump has done is taken a blunt hammer to it and said all goods from all countries will have tariffs. But if you look at retaliatory tariffs, imposed by other countries, it is precise and meant to hurt very specific industries.
For example, China has raised tariffs on US soyabean. In way it is targeted at US rust belt farmers. The idea being that farmers are a politically active class and if tariffs cause them pain, maybe Trump will come to the table. But that has happened yet. Maybe US farmers just don't care as they are winning too much.
Punishing their own nationals is very explicitly how this is sold to the voter base. "Prices are going to go up for you but unfortunately we have to do this to try to stop our neighbor from raising their import tax explicitly on goods from us".
Taxes are not a problem if everyone plays by the same rules. The problem for the economy is that some imports are subject to tax and others aren't, or when domestic goods aren't subject to the same tax. Picking winners and losers in an economy by political has never before in history turned out a winning concept.