Canada is hitting back in the deepening cross-border trade fight, announcing retaliatory tariffs on $20 billion worth of United States goods and rolling out billions in support for companies and workers bracing for the fallout.
Ottawa said its countermeasures will take effect 8 September, a deadline Prime Minister Mark Carney had previously signalled after US President Donald Trump’s 50% duties on Canadian products came into force Saturday.
Officials, outlining the plan, said Canada’s new duties will mirror US tariff levels and will reach into major sectors including steel, dairy and electronics.
Alongside the tariffs, the federal government unveiled a $5.4 billion aid package aimed at affected firms and workers.
Mark Carney said he would respond ‘dollar for dollar’ to the US tariffs
“This is an unprecedented challenge imposed on Canada. But Canada will meet the moment,” Canada’s Finance Minister Francois-Philippe Champagne said.
“I think what Canadians can see this morning is that we stand united. We stand united in our response,” he added.
Tit-for-tat
The new US tariffs apply to roughly $20 billion in Canadian goods — about 5.5% of Canada’s exports to the United States — after negotiations broke down at the eleventh hour.
Canada’s response will raise tariffs to 50% on US steel and aluminum products that had previously been subject to a 25% duty.
Canada will also apply 25% tariffs on items including appliances, dairy products such as cheese, and certain derivative products tied to steel and aluminum.
Another, smaller set of goods will face a 15% duty, including electric equipment and tools.
In total, Ottawa said the measures cover about 7.3% of Canada’s imports from the United States.
Economists and market watchers, however, have cautioned that the moves could fuel an escalating cycle of retaliation.
On top of the current steps, Mr Trump said yesterday he would also seek to double tariffs on Canadian autos beginning next year, lifting them to 50% from the current 25% for non-US content.
Ontario Premier Doug Ford denounced the auto threat, telling Mr Trump he could “kiss my ass” and warning that Ontario could impose an electricity export surcharge.
Earlier in the dispute, Ontario introduced a temporary 25% surcharge on electricity exports to three US states.
Mr Trump responded angrily to Mr Ford, warning of “far worse” consequences. He also called Mr Carney a “governor,” reviving his provocative campaign for Canada to become the 51st US state.
Underscoring the hostility, Mr Trump said today he was considering renaming Lake Ontario as “Lake America,” similar to his move last year involving the Gulf of Mexico, which he argued should now be called the “Gulf of America.”
Mr Trump’s latest tariffs also apply to goods covered by the US-Mexico-Canada free trade agreement (USMCA). Oxford Economics estimates the measures push the US effective tariff rate on Canadian exports to 6.9%, up from 5.1%.
According to Oxford Economics, plastics, electrical machinery, and wood and paper products account for the largest share of that increase.
“Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.
Threats to culture
Mr Carney said over the weekend that US negotiators tried at the last minute to secure limits on Canada’s ability to strike trade deals with other countries.
He also said US officials issued unacceptable “threats” involving the French language and “Quebec culture,” referencing Canada’s eastern French-speaking province.
Coils of steel are seen ready for transport at an ArcelorMittal Dofasco facility in Hamilton, Ontario
Mr Trump rejected that account, writing on Truth Social that he would “never interfere with Canadians speaking French!”
“This lie was made up by a weak and ineffective Prime Minister in an attempt to gain political support,” Mr Trump charged.
The United States remains Canada’s largest trading partner, with exports south of the border making up 70% of Canada’s total.
Canada, meanwhile, is the United States’ second biggest trading partner in goods this year, trailing only Mexico.
A poll released Sunday by the Angus Reid Institute found Canadians broadly back Mr Carney’s decision to leave the talks, even as some respondents expressed concern about economic consequences.
The White House has accused Canada of “discriminatory treatment” of US alcohol, automobile and dairy products as it rolled out the new tariffs.
Mr Trump postponed implementation, but after hours of negotiations neither side reached a deal.
Beyond the current tariff fight, Washington and Ottawa also face negotiations over revisions to the USMCA, which Mr Trump has said he would not renew in its current form.
