Canada on Tuesday announced counter-tariffs on U.S. goods ranging between 15 per cent and 50 per cent, intensifying the trade war between the historically close allies.
Ottawa’s retaliation takes effect Sept. 8, a timeframe earlier outlined by Prime Minister Mark Carney after U.S. President Donald Trump’s 50 per cent duties on Canadian products came into place Saturday.
In detailing Ottawa’s response, officials said Tuesday that its duties will match U.S. levels. These impact industries like steel, dairy and electronics.
Canada’s government also announced a $7.5-billion aid package for impacted firms and workers.
“This is an unprecedented challenge imposed on Canada. But Canada will meet the moment,” 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 steep U.S. tariffs hit about $20 billion in Canadian goods — about 5.5 per cent of its exports to the United States — after trade negotiations collapsed at the eleventh hour.
Under Canada’s planned response, U.S. steel and aluminum products previously subject to a 25 per cent duty will soon face 50 per cent tariffs.
Goods facing 25 per cent tariffs will include appliances, dairy products like cheese, as well as certain steel and aluminum derivative products.
A small category will see a 15 per cent duty, including electric equipment and tools.
Overall, these form about 7.3 per cent of Canada’s imports from the United states.
But analysts warn of tit-for-tat escalation.
Already, Trump additionally pledged Monday to double tariffs on Canadian autos starting next year, up to 50 per cent from the current 25 per cent for non-U.S. content.
Ontario Premier Doug Ford criticized Trump’s threat on autos, saying he could “kiss my ass” and threatening an electricity export surcharge.
In an earlier phase of the dispute, Ontario imposed a temporary 25 per cent surcharge on electricity exports to three U.S. states.
Trump lashed out at Ford, warning of “far worse” consequences. He also referred to Carney as a “governor,” re-upping his inflammatory push for Canada to become the 51st U.S. state.
Highlighting the animosity, Trump said Tuesday he was considering renaming Lake Ontario as “Lake America,” as he did last year with the Gulf of Mexico, which he said should now be called the “Gulf of America.”
Trump’s latest tariffs do not exempt products covered by the Canada-U.S.-Mexico free trade agreement (CUSMA). They raise the U.S. effective tariff rate on Canadian exports to 6.9 per cent from 5.1 per cent, Oxford Economics estimates.
Tariffs on plastics, electrical machinery, and wood and paper products contribute most to the increase.
“Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.
Threats to culture
Over the weekend, Carney said U.S. negotiators sought restrictions on Canadian trade deals with other countries at the last minute.
U.S. officials made unacceptable “threats” to the French language and “Quebec culture” too, he added, referring to eastern Canada’s French-speaking province.
But Trump pushed back Tuesday, saying 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,” Trump charged.
The United States is Canada’s biggest trading partner, with Canadian exports to its neighbour representing 70 per cent of its overall total.
Canada is the second biggest U.S. trading partner in goods this year, behind Mexico.
Polling released Sunday by the Angus Reid Institute showed Canadian broadly support Carney’s move to walk away from talks, but some fear economic repercussions.
The White House had alleged “discriminatory treatment” by Canada against U.S. alcohol, automobile and dairy products in rolling out new tariffs.
Trump delayed their implementation, but both sides failed to reach an agreement after hours of talks.
Beyond tariffs, Washington and Ottawa also have to agree on revisions to the CUSMA, which Trump declined to renew in its current form.
