Canada’s retaliation against President Donald Trump’s tariffs is designed to concentrate political pressure in sensitive U.S. states, even though the direct economic impact remains limited, economist Justin Wolfers said. Trump’s tariffs cover roughly $20 billion of Canadian goods, equivalent to about 4% of Canada’s exports, and Canada matched them dollar for dollar. Ottawa’s countermeasures, ranging from 15% to 50%, apply to 639 U.S. products, including a 50% levy on U.S.-manufactured toilet paper and a 25% duty on industrial lawnmowers. They followed failed trade talks and Trump’s 50% duties on an estimated $27.6 billion in Canadian imports. Wolfers said machinery, aluminum and dairy are concentrated in a small number of electorally important Midwestern states near the Canadian border, increasing the political cost for Trump despite modest overall economic stakes. He compared the dispute with last year’s U.S.-China escalation, when tariffs eventually reached 145% and halted most bilateral trade before negotiations produced de-escalation. Wolfers said Prime Minister Mark Carney could slow retaliation and run out the clock to avoid a similar spiral. Investor Peter Schiff has also described the policy as potentially good politics but bad economics for Canada. Domestic support for holding firm is conditional: a Build Canada survey of 1,696 Canadian residents found 56% rejected an additional C$500, or about $360, in annual taxes, while 68% rejected increased household job-loss risk. Only 20% favored making concessions to preserve U.S. trade access, although 50% of Conservative voters supported concessions compared with 3% of Liberal voters. The poll had a margin of error of plus or minus 3.1 percentage points, 19 times out of 20. Carney has indicated that the strategy could continue through at least the end of Trump’s current term in 2029, and said businesses would receive support beyond the life of the U.S. administration. He also acknowledged that reducing Canada’s reliance on the U.S. market would impose costs. Trump has separately criticized the currency exchange rate, threatened to block Bombardier Inc. jets from the U.S. market and warned of severe consequences for Canadian politicians who treat him as the enemy. Build Canada’s government tracker lists 603 Carney government promises, including 182 completed, 287 in progress and five broken. The dispute reflects a recurring gap between Canadians’ support for policy goals and their willingness to pay for them. Whether Ottawa’s approach remains politically sustainable will depend on how long households accept the cost of holding firm.