Canada Announces Counter-Tariffs Against U.S., Marking Start of Prolonged Trade Standoff

Canada’s retaliatory tariffs came into effect on Tuesday, targeting close to C$28 billion (~$20 bn) of American goods.

The 50%‑maximum levy applies to a wide range of products, from steel and furniture to cotton t‑shirts. Fresh fish and lobster were initially listed but were withdrawn after pressure from Canada’s seafood sector, illustrating the delicate balance of punishing a trade partner while protecting domestic industries.

Talks between the two countries broke down in late August, and neither side has yet presented a new framework. Prime Minister Mark Carney has pledged a “durable” deal that serves both nations and indicated Canada is ready to negotiate whenever the U.S. is.

U.S. trade representative Jamieson Greer said the U.S. had offered a comprehensive proposal but Canadians “turned around.” He warned the U.S. might retaliate further, possibly banning imports of certain Canadian products.

In keep‑alike sanctions, President Donald Trump threatened to halt business with Canada‑based aircraft manufacturer Bombardier unless the company moves manufacturing south. Bombardier contributes over C$7 bn to Canada’s 2024 GDP.

The new tariffs come on top of existing Canadian duties on non‑USMCA compliant Canadian vehicles. They are in addition to U.S. tariffs on Canadian cars, steel, aluminium, lumber, dairy, alcohol, hockey sticks, and perfume.

Polls suggest most Canadians support the counter‑tariffs, but economists warn they could raise everyday prices. The Canadian Chamber of Commerce calls for a measured approach to retaliation and notes businesses expect the dispute to persist.

Industry pushback led Canada to omit dozens of seafood items to avoid unintended domestic harm. The lobster trade, heavily interdependent between the two countries, exemplifies the sector’s vulnerability to tariff shifts.

Canada’s economy has shown resilience: GDP grew 3.3% in Q2, and employment rose 181,000 jobs from April to July, although 41,000 jobs vanished in August amid the new U.S. tariffs.

Manufacturing benefits spiked, reflecting a tilt toward “made‑in‑Canada” products. Prime Minister Carney has pledged to reduce Canada’s trade reliance on the U.S., noting U.S.‑bound exports fell from 75% to 66% of total exports.