Canada strikes back with 15-50% tariffs on US goods, ramping up trade war
Canada on Tuesday announced counter-tariffs on U.S. goods ranging from 15 to 50 per cent, intensifying a trade conflict between the historically close allies. The retaliatory measures, set to take effect on September 8, mirror the levels of duties imposed by Washington on Canadian products, which came into force on Saturday.
Ottawa's response, announced after trade negotiations collapsed at the eleventh hour, targets industries including steel, dairy, and electronics. Canadian officials said the tariffs will match U.S. levels, affecting roughly 7.3 per cent of Canada's imports from the United States.
In tandem with the tariffs, the Canadian government unveiled a $5.4 billion (CA$7.5 billion) aid package to support impacted firms and workers. Finance Minister Francois-Philippe Champagne described the situation as “an unprecedented challenge” but asserted that Canada would “meet the moment.”
“I think what Canadians can see this morning is that we stand united,” Champagne said. “Canada must respond and today we are, in a proportionate, targeted and strategic way.”
Industry Minister Melanie Joly echoed the call for Canadians to support local businesses while vowing to seek new allies and trading partners. “We cannot wait for Washington to decide our future,” she said.
The U.S. tariffs, which hit about $20 billion in Canadian goods (approximately 5.5 per cent of Canada's exports to the U.S.), were imposed after talks broke down. Under Canada's response, U.S. steel and aluminum products previously taxed at 25 per cent will now face 50 per cent tariffs. Goods including appliances, dairy products such as cheese, and certain steel and aluminum derivatives will be subject to 25 per cent duties, while a smaller category covering electric equipment and tools will see a 15 per cent tariff.
Analysts warn of a tit-for-tat escalation. On Monday, U.S. President Donald Trump pledged to double tariffs on Canadian autos starting next year, raising them to 50 per cent for non-U.S. content. Ontario Premier Doug Ford criticised the move, threatening an electricity export surcharge. Trump responded with warnings of “far worse” consequences and again referred to Prime Minister Mark Carney as a “governor,” reigniting his controversial push for Canada to become the 51st U.S. state.
Trump also said he was considering renaming Lake Ontario as “Lake America,” following a similar move last year when he ordered the Gulf of Mexico to be called the “Gulf of America.”
The latest U.S. tariffs do not exempt products covered by the U.S.-Mexico-Canada free trade agreement (USMCA). According to Oxford Economics, the measures raise the U.S. effective tariff rate on Canadian exports to 6.9 per cent from 5.1 per cent, with the largest increases affecting plastics, electrical machinery, wood, and paper products. The firm noted that manufacturers in Quebec, New Brunswick, and Ontario would be most affected.
Over the weekend, Carney said U.S. negotiators had made last-minute demands, including restrictions on Canadian trade deals with other countries, and issued unacceptable threats to the French language and “Quebec culture.” Trump denied these claims on social media, accusing Carney of lying “to gain political support.”
The United States is Canada's largest trading partner, absorbing 70 per cent of Canadian exports. Canada, in turn, is the second-largest U.S. trading partner in goods this year, behind Mexico. A poll released on Sunday by the Angus Reid Institute found broad public support for Carney's decision to walk away from talks, though many Canadians expressed concerns about economic repercussions.
