Canada Enacts 50% Counter‑Tariffs on US Goods Amid Trade War
Canada's retaliatory tariffs on a wide range of U.S. products took effect on Tuesday, with no trade deal on the horizon. The counter‑tariffs affect goods worth nearly C$28 bn (about $20 bn) and can be as high as 50%.
Key items include steel, furniture, cotton T‑shirts, fresh fish and lobster. After pressure from its seafood industry, Canada removed lobster and fish from the list—showing the tightrope it walks while countering the U.S. giant.
Both governments express a desire to negotiate a durable agreement, yet talks collapsed in late August and no breakthrough has materialised. Prime Minister Mark Carney told reporters the country is ready to sit down with the Americans when they are, while U.S. trade representative Jamieson Greer described the ball as being in Canada’s court.
Greer warned Americans against retaliation, noting the U.S. might ban Canadian imports. President Trump previously threatened to halt all business with Bombardier—Canada’s largest manufacturer contributing C$7 bn to GDP.
Business leaders are scrambling to adapt. The U.S. maintains 25% duties on Canadian vehicles and has added 50% duties on dairy, alcohol, hockey sticks and perfume. Canada’s new duties are described as “dollar‑for‑dollar” and will target hundreds of U.S. items that came in the night of Tuesday.
Surveys show a majority of Canadians back retaliatory tariffs, but economists warn that the measures will raise prices for everyday goods—clothing, food and furniture. The Canadian Chamber of Commerce calls for a surgical approach to retaliation to avoid endless escalation.
Trade talks have stalled amid increases on both sides. Despite a resilient economy—GDP grew 3.3% in Q2 and employment rose 181,000 jobs between April and July—Canada still faced 41,000 job losses in August after the new U.S. tariffs and collapsed negotiations.
Prime Minister Carney has pledged to diversify trade away from the U.S. In July, Canada’s exports to the U.S. fell to 66% of its total exports from a 75% average pre‑war.
The situation remains fluid. As U.S. and Canadian businesses navigate the new counter‑tariffs, the world watches for any shift toward resolution or deeper escalation.
