The U.S. is unlikely to win its ‘dumb trade war’ with Canada. Here’s why

In today’s CEO Daily: The U.S. imposes 50% tariffs on a wide range of Canadian imports The big leadership story: ‘Dads’ and ‘duds’ The markets: Asia markets are down with big drops by Alibaba and Samsung Plus: All the news and watercooler chat from Fortune .

Good morning.

America’s trade war against its closest ally has escalated again, with the Trump administration invoking section 338 of a notorious 1930 law to impose 50% tariffs on a wide range of Canadian imports.

The sticking points were both economic and cultural, with Quebec’s French-language laws even coming under attack .

Canadian Prime Minister Mark Carney is being praised for his response while Trump was criticized, even by members of his own party .

This is not a war that America, or American business, is likely to win.

Here’s why.

Trump’s options are limited.

There’s a reason this latest missive only impacts 5% of Canadian imports.

The Supreme Court already decided the president can’t invoke emergency powers to impose tariffs.

Walmart is now using its tariff refund to lower prices .

The Iran war has increased demand for Canada’s oil, aluminum and fertilizer; Saskatchewan is known as the Saudi Arabia of potash, with more than a third of global supply.

And Trump’s priority is to lower costs for inflation-weary consumers ahead of the midterms, just suspending tariffs on imports of up to 300,000 metric tons of ground beef to bring cheaper foreign meat into the market.

As Eurasia Group founder Ian Bremmer told me over the weekend: “There’s still time to walk this back … Trump not taking a public victory lap makes last-minute resumption of talks possible.” Canada is becoming more resilient.