Canada’s retaliatory tariffs on a range of United States goods came into effect on Tuesday, with no sign of a trade deal on the horizon.
The counter-tariffs will apply to nearly C$28bn ($20bn; £15bn) worth of American products, from steel to furniture to cotton T-shirts, and will be as high as 50 percent.
Key Highlights
- Canada’s retaliatory tariffs on US goods take effect, escalating the ongoing trade dispute between the two countries.
- Nearly C$28 billion worth of US products are affected, including steel, furniture and clothing.
- Tariffs will reach as high as 50% on some American imports.
- Fresh fish and lobster were removed from the tariff list following concerns from Canada’s seafood industry.
- Trade negotiations remain stalled after talks between Ottawa and Washington collapsed in late August.
Fresh fish and lobster were also on the list, but Canada later omitted them after pushback from its seafood industry, a sign of the tricky balance it has to strike as it retaliates against its largest trading partner.
Both US and Canadian officials have said they would like to strike a deal, but no movement has been made to resume talks after they collapsed in late August.
Speaking to reporters last week, Prime Minister Mark Carney said that Canada is still in search of a deal with the US that is “durable” and in the best interests of both countries.
“We’re ready to sit down and strike that deal when the Americans are ready,” Carney said. US trade representative Jamieson Greer, meanwhile, said last Thursday that the ball is in Canada’s court.
“We offered them the best deal; they looked at it square in the face and turned around,” Greer said in an interview with Fox News, adding that there has been sparse communication with the Canadians since talks collapsed.
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In a separate interview with Canadian broadcaster CBC, Greer cautioned against retaliation and suggested the US might hit back by banning the import of some Canadian products.
President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south.
The company is one of the largest in the country, contributing over C$7bn to Canada’s annual Gross Domestic Product (GDP) in 2024, according to a report commissioned by Bombardier from public accounting firm PwC.
Trump aimed at Canada in a series of other Truth Social posts over the weekend, including one that called Canada’s exchange rate with the US “unacceptable”.
Another post showed a map of North America, including Canada and Mexico, and Greenland all overlaid with the US flag.
Canada and the US have the world’s largest bilateral trading relationship valued at nearly $900bn in 2025.
With new US tariffs and Canadian counter-tariffs now in effect, businesses on both sides, are scrambling to deal with what comes next.
The US currently has in place a 25 percent tax on Canadian cars and trucks, as well as taxes on Canadian steel, aluminium and lumber.
In late August, Trump imposed new 50 percent tariff on other goods like dairy, alcohol, hockey sticks and perfume.
Canada’s counter-tariffs, which were described by Carney as “dollar-for-dollar,” will, from Tuesday, be applied to hundreds of items coming in from the US.
They are in addition to existing retaliatory taxes Canada had placed on finished American cars and trucks that are non-compliant with a free trade agreement between Canada, the US and Mexico, known as the USMCA in the US and CUSMA in Canada.
The Canadian Chamber of Commerce has also urged the Carney government to take a surgical approach to retaliation.
Prime Minister Carney has vowed to diversify Canada’s trade away from the US. July figures show the share of US-bound Canadian exports dropped to 66 percent from an average of 75 percent before the trade war.
