A tariff by contrast is only imposed on imports from other countries, to make them more expensive compared to domestically produced goods. Tariffs tilt the playing field to domestic producers.

That is exactly what he wants. More domestic producers. That's all I hear from him in Canada.

President Trump is obviously struggling to understand the difference between tariffs and VAT.

I don't think he is struggling to understand. He wants to bost domestic production.

So is it worth bothering to negotiate with him, or is it better to just slap retaliatory tariffs on, and diversify to doing business with the rest of the world?

Negotiating in the beginning is pointless. Tit for tat tariffs would be the only way to go. Than after a few years the population will demand some trade deals on certain products they can't produce.

The population is the one that doesn't understand the impact it will have on them. The government/politicians will make lots of money off the tariffs at the populations expence.

They way Canada is dealing with this is boycotting US goods (our biggest trading partner) and promoting Canadian goods more. Canadian's are asking groceries stores to put American products in the international aisles and clearly state what is Canadian products.(Something that should of been done a long time ago.) At least that's the narative by the mainstream media.

I could see Canada having specific aisles for different countries in groceries stores, as we make new trade deals. We already have stores for different countries. I think it will be good in the long run. More selection to choose from.

The tit for tat tariffs won't hurt Canada as much as it would hurt other Countries because we deal with a lot of international trade in the first place.

This is just my opinion from what I have observed. I have not financial background.