Canada hits US with retaliatory tariffs

The Canadian government has announced that it will impose retaliatory tariffs of up to 50% on around 700 American products, after US President Donald Trump hit Canada with a round of tariffs and threatened further increases. 

American steel and aluminum will be tariffed at 50%, according to a statement on the Canadian Finance Department’s website, while other goods – including dairy products, appliances, and farm equipment – will face tariffs of 25%. The measures will cover around $20 billion in US imports, and will come into effect on September 8, the statement added.

“Canada will match the United States’ tariffs dollar for dollar, rate for rate,” Finance Minister Francois-Philippe Champagne said at a press conference on Tuesday. The tariffs, he added “are designed primarily to provide protection for Canadian industry impacted by US tariffs.”

Trade talks between the US and Canada collapsed on Friday, with both sides accusing the other of making last-minute changes to a proposed comprehensive trade agreement. Trump immediately imposed 50% tariffs on $20 billion worth of Canadian imports, including wine, cement, plywood, clothing, and hockey equipment.

The dispute deepened on Monday when Trump took to Truth Social to threaten further tariffs on America’s northern neighbor.

Trump accused Canada of “ripping off the United States of America for years,” highlighting Ottawa’s protectionist tariffs on American agricultural produce. The system, he said, is “not sustainable.”

“On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump announced. The move will double the current 25% tariff on Canadian auto imports. “Build in the US and there are ZERO TARIFFS,” the president added, saying Canada would no longer be treated “like a State” and calling it “among the worst nations in the world to deal with.”

At the core of Trump’s grievance is the trade deficit with Canada. He claims this figure stands at $60 billion, but Trump’s own trade representative puts it at $48.3 billion. While Trump views this deficit as evidence that Canada is taking advantage of the US, Canadian Prime Minister Mark Carney has argued that the deficit only exists because the US imports so much oil, gas, and electricity from Canada. “I don’t think they want us to stop sending it,” he commented in an address on Saturday.

Trump also takes issue with Canada’s protectionist tariffs on dairy, poultry, and eggs, which can be as high as 200% over a certain quota. Canada also tariffs American automakers who have moved their Canadian factories back to the US, a policy that directly challenges Trump’s plans to reindustrialize the US.

Trade tensions between Washington and Ottawa date back to Trump’s first term, but reignited when he returned to office last year and launched a sweeping tariff campaign against major trade partners, including China, the EU, Japan, and Mexico.

“We’ve been under no illusions,” Carney said on Saturday, referring to his dealings with Trump. “We recognized from the start that America has changed.”