Canada announced counter-tariffs of between 15 per cent and 50 per cent on US goods on Tuesday, intensifying the trade war between the historically close allies.
Ottawa’s retaliation will take effect on 8 September, a timeframe previously outlined by Prime Minister Mark Carney after US President Donald Trump’s 50 per cent tariffs on Canadian products came into force on Saturday, reports AFP.
Officials said Canada’s tariffs would match US levels, affecting industries including steel, dairy and electronics.
The Canadian government also announced a $5.4 billion (CA$7.5 billion) aid package for affected companies 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.
The steep US tariffs affect about $20 billion worth of Canadian goods, or around 5.5 per cent of Canada’s exports to the United States, after trade negotiations collapsed at the last minute.
Under Canada’s planned response, US steel and aluminium products previously subject to a 25 per cent duty will face tariffs of 50 per cent.
Goods facing 25 per cent tariffs will include appliances, dairy products such as cheese, and certain steel and aluminium derivative products.
A smaller category, including electrical equipment and tools, will face a 15 per cent duty.
Overall, the affected goods account for about 7.3 per cent of Canada’s imports from the United States.
However, analysts have warned of further tit-for-tat escalation.
Trump pledged on Monday to double tariffs on Canadian cars from next year, raising them to as much as 50 per cent from the current 25 per cent for non-US content.
Ontario Premier Doug Ford criticised Trump’s auto tariff threat, saying he could “kiss my ass” and threatening a surcharge on electricity exports.
During an earlier phase of the dispute, Ontario imposed a temporary 25 per cent surcharge on electricity exports to three US states.
Trump lashed out at Ford, warning of “far worse” consequences. He also referred to Carney as a “governor”, renewing his push for Canada to become the 51st US state.
Adding to the tensions, Trump said Tuesday that he was considering renaming Lake Ontario as “Lake America”, following his move last year to rename the Gulf of Mexico the “Gulf of America”.
Trump’s latest tariffs do not exempt products covered by the US-Mexico-Canada free trade agreement (USMCA). Oxford Economics estimates they will raise the effective US tariff rate on Canadian exports to 6.9 per cent from 5.1 per cent.
Tariffs on plastics, electrical machinery, and wood and paper products account for most of 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 US negotiators had sought restrictions on Canadian trade agreements with other countries at the last minute.
He also said US officials had made unacceptable “threats” to the French language and “Quebec culture”, referring to the eastern Canadian province’s French-speaking population.
Trump rejected the claim on 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 southern neighbour accounting for 70 per cent of its total exports.
Canada is the second-largest US trading partner in goods this year, behind Mexico.
Polling released on Sunday by the Angus Reid Institute showed that Canadians broadly support Carney’s decision to walk away from the talks, although some fear the economic consequences.
The White House had accused Canada of “discriminatory treatment” against US alcohol, automobile and dairy products as it introduced new tariffs.
Trump delayed their implementation, but the two sides failed to reach an agreement after hours of negotiations.
Beyond tariffs, Washington and Ottawa must also agree on revisions to the USMCA, which Trump declined to renew in its current form.
