Yesterday was Labour Day. If you’re like most Canadians, you spent the day relaxing with family rather than working or watching the news. If you did so, then you missed a whole lot of news related to the ongoing trade war between Canada and the US. On Labour Day, Donald Trump made one of his most explosive threats yet, while Prime Minister Mark Carney commented on the possibility of a prolonged and painful trade war. In this article, I explore all the tariff war developments that took place on and around this public holiday.
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The Bombardier ban
Bombardier Inc (TSX: BBD.B) was the main topic of trade war discussion on Labour Day. Late Monday night, President Trump announced that he was planning on prohibiting the sale of Bombardier jets in the United States. The threat rattled markets, with Bombardier stock in particular being hit hard, falling 7% at market open on Tuesday.
Bombardier sells about 50% of its aircraft in the United States. Making up for lost sales by selling to other countries would not be easy, as aircraft orders are major commercial deals that often involve months of negotiations and bureaucracy. So, if Trump goes ahead with his threat, then Bombardier’s sales will likely decline precipitously.
Of course, it’s possible that Trump won’t actually go ahead with his threat. The US President is known for practicing “The Art of the Deal,” a negotiation strategy that involves making enormous demands or threats with the aim of eliciting concessions from the counterparty. It may be that Trump and Carney will be able to work something out. However, the next news item calls into question whether that will actually happen on a reasonable timeframe.
Retaliatory tariffs kick in
When Donald Trump implemented his most recent round of tariffs on Canada, Prime Minister Carney reacted with a pledge of new retaliatory tariffs. Those tariffs go into effect today. The tariffs are on $28 billion worth of US imports, including dairy, champagne, and vehicles. The tariffs are a major escalation in the trade war, and Carney has said that they won’t come down unless Trump reduces the tariffs he implemented earlier.
Carney’s warning
A final news item that came out around Labour Day was Mark Carney’s address to the nation. Carney said many things, some of them encouraging (for example, he highlighted Canada’s advantages in natural resources). However, he also said that his government’s trade war actions would come at a cost. Media outlets framed this as Carney warning of “tough times ahead.” That’s a slightly hyperbolic take on what Carney actually said, but with Trump escalating his threats, it does appear that the tariff war will go on for some time yet.
Foolish takeaway
Labour Day 2026 was meant to be a day of relaxation, but based on the news cycle, it was actually a day of rising risk and uncertainty. Between Trump’s Bombardier threats and Carney’s retaliatory tariffs, a lot happened on and around Labour day, most of it pointing to an increasingly volatile trade environment going forward.
