Canada Retaliates with Tariffs on 700 US Goods as Trade War Deepens

Canada announced on Tuesday that it will impose retaliatory tariffs on 700 United States goods worth $20 billion, with rates ranging from 15 to 50 per cent. The measures, set to take effect on September 8, come after the United States imposed its own tariffs on Canadian products over the weekend.

Canadian officials said the tariffs are calibrated to match the levels imposed by the US and will affect sectors including steel, dairy, and electronics. The announcement marks a significant escalation in the trade conflict between the two neighbouring countries, which are each other's largest trading partners.

"This is an unprecedented challenge imposed on Canada. But Canada will meet the moment," Finance Minister Francois-Philippe Champagne said in a statement. "I think what Canadians can see this morning is that we stand united. We stand united in our response," he added.

The development follows the collapse of trade talks on Friday. US President Donald Trump's administration had imposed 50 per cent tariffs on Canadian goods over the weekend after negotiations failed to yield an agreement.

Canadian Prime Minister Mark Carney said on Friday that he walked away from the negotiating table because the US proposed terms that were "uneconomic" and "unfair". He accused the US of launching a trade war, stating, "You're at war when you get attacked. We got attacked."

"We cannot accept what they've offered, and we will not give what they've asked," Carney said. "We learned during the negotiations that the Americans want to destroy our major industries, including autos, steel and aluminium. That was one of the main reasons we said no. It was a bad deal."

On Monday, Trump warned Canadian leaders to "fall in line" or face consequences that would be "far worse" than the existing tariffs. He also announced plans to impose additional tariffs on Canada's auto industry beginning next year. In a social media post, Trump criticised Canada's "ridiculously high tariffs" on American farmers and accused the country of "ripping off" the United States.

The escalating dispute has raised concerns among economists and business groups about the impact on cross-border trade. The United States and Canada exchange hundreds of billions of dollars in goods and services annually, and prolonged tariffs could disrupt supply chains and raise prices for consumers in both countries.

The Canadian government has emphasised that it seeks a fair agreement but will not accept terms that undermine its economic interests. With both sides appearing firm in their positions, the coming weeks will be critical in determining whether the dispute can be resolved through further negotiations or will continue to escalate.