What tariffs will really cost Canadians and Americans

The US and Canada have been locked in a bitter trade conflict since President Donald Trump launched his tariffs policy on his return to the White House.

The latest escalation has seen Canadian Prime Minister Mark Carney impose retaliatory import taxes on a host of US goods which came into force this week, after Trump threatened hikes of his own.

As the dust settles in this tit-for-tat tariff row between the North American neighbours, here's what will be affected most on both sides of the border.

The automotive industry is likely to bear the brunt of increased tariffs, with cars, trucks and parts being targeted. Cars, trucks and parts are among the main goods traded between the US, Canada and Mexico, with the manufacturing sector and supply chains stretching across borders.

Higher costs on imports to the US could accelerate a trend of manufacturers prioritising luxury cars, SUVs and pick-up trucks and push up prices in the used-car market if supplies of new but less-expensive vehicles becomes tight. The Forest Products Association of Canada says tariffs would raise costs on both sides of the border.

Canada's forest industry employs almost 200,000 people and has called on the government to boost domestic demand through federal housing programs to make greater use of Canadian wood, though it admits 'no support package can replace reliable access to our largest export market'. When it comes to US consumers, frictions to trade can have longer-term economic impacts. Such tensions also feed into concerns over the free-trade agreement between Canada, the US and Mexico, known as the USMCA. Both Canada and Mexico have said they want the USMCA extended for another 16 years, but the US has said it will not renew in its current form.

Despite the deal remaining operational, tariffs risk putting off talks in the near future, creating more uncertainty for cross-border trade. John Iselin, associate director at the Budget Lab at Yale, estimates the cost will only be about