The US is at the centre of a series of trade escalations today.
Canada has announced retaliatory tariffs on US$20bn of US imports, after the Trump administration went ahead with rates of up to 50% on Canadian goods this week.
China is also warning Washington not to allow its expanded Iranian sanctions regime to impact its firms.
Canada retaliates against US
Canada is set to impose retaliatory tariffs rates of up to 50% on US$20bn of US products on 8 September.
This follows the breakdown of trade talks over the weekend and the US’ imposition of 50% tariffs on Canadian imports.
The FT reports that the announcement came yesterday (25 August) via Canada’s finance minister François-Philippe Champagne, who issued a 99-page document outlining the hundreds of US goods that will be affected, including dairy, steel and agricultural equipment.
Champagne said the US “asked too much and offered too little; we chose to stand up for Canadians”.
The tariff announcement coincides with a US$5.5bn package of support for businesses and workers impacted by US tariffs, which Champagne also said would “protect workers, farmers, families and businesses as we build a stronger, more resilient and more diversified Canadian economy”.
The White House released a statement after Canada’s tariff announcement claiming that the Trump administration had offered Ottawa “the most preferential market access of any country on Earth” but this had been rebuffed with “unreasonable demands, walk-backs and flat-out rejection”.
It reiterated the claims of Canadian “discrimination” in its treatment of dairy, auto and alcohol imports, and also said Canada was almost alone in its decision to impose tariffs on the US – “joined only by the People’s Republic of China in choosing retaliation over negotiation”.
Politico published commentary opining that, in contrast to prime minister Mark Carney’s defiant calls for solidarity among “middle powers” against Trump’s tariffs earlier this year, those powers “have left him to do battle with Trump largely alone”.
It also noted his proposed plan to forge stronger trade ties between such powers through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and EU cooperation have not progressed.
China’s retaliation
Beijing has also warned it will target the US with economic measures if the Trump administration’s new Iran sanctions hit Chinese firms.
Washington released a set of new sanctions on Iran this week (24 August), vowing an “economic D-Day” that would untether Tehran’s existing financial support networks as it escalates its policing of the Strait of Hormuz.
The FT reports that companies in Mainland China and Hong Kong – over which Beijing claims control – were impacted by the new measures, but Chinese financial institutions were not.
“China has made clear on many occasions its firm opposition to illicit unilateral sanctions that have no basis in international law or the authorisation of the UN Security Council”, a Chinese foreign ministry spokesperson said yesterday.
“China will take all necessary measures to firmly safeguard its rights and interests.”
Currently, China buys an estimated 90% of Iran’s oil, a key economic lifeline amid widespread western sanctions measures.
The recent escalation in economic measures stems from Iran’s attempts to exert control over the Strait of Hormuz, including threats against dozens of commercial vessels in the waterway.
Oman and Iran engaged in talks yesterday to agree a system for managing the strait that enables commercial shipping to resume unimpeded.
Call for evidence opportunity
Does your business trade with Indonesia, the Philippines, the United Arab Emirates or Uruguay?
The Department for Business, Innovation, Science & Trade is calling on businesses to share their experience on trading with these countries as the government launches a consultation to deepen the UK’s trading relationship with them.
All four countries are on a pathway to joining the CPTPP, a 12-member trading bloc including the UK, Canada, Australia and Mexico.
This consultation will inform how the UK tries to achieve stronger trading ties with each of those four nations, whether through CPTPP accession discussions, other “trade policy mechanisms” or bilateral free trade agreements.
To participate, complete this survey by 14 September 2026, further information about the consultation is available here.
Stronger UK-European rail links
The number of daily London-European rail services could more than double by the end of the decade, Politico reports.
Currently there’s around 25 services per day running from London St Pancras to destinations in France, Belgium and the Netherlands, but this could rise to 55 amid competition between train operators.
In addition to Eurostar, Virgin Trains has been greenlit to run international services and Italy’s state-owned rail company Trenitalia has expressed an interest in operating services cross-Channel by 2029.
The report notes that despite passport-control requirements resulting from the UK’s post-Brexit decision to stay outside the Schengen area, the route is still lucrative enough to attract interest from train companies. Although it’s unlikely that stations beyond London will have the infrastructure to support these checks, limiting expansion beyond the capital.
Earlier in the year, the Channel also became a site of greater trade potential, as the government announced a possible return of rail freight through the tunnel, following a deal done to create a new international logistics hub in East London.
“This could see British businesses directly import and export goods via rail to France, Germany, Italy and Spain”, the announcement said.
Also in the trade headlines
· Foreign, Commonwealth and Development Office (FCDO) has launched a new Global Network Programme to help businesses better get to grips with the markets they want to export to
· First round of pre-Autumn budget speculation being reported, as BBC writes that UK prime minister Andy Burnham hasn’t ruled out tax rises
Yesterday in Trade
· Northern Ireland secretary Sir Chris Bryant announced plans to unlock the country’s economic potential
· The US announced a new wave of sanctions on Iran amid Strait of Hormuz escalation
