Canada Begins Retaliatory Tariffs on $20 Billion of U.S. Goods

Canada has begun imposing retaliatory tariffs on roughly 28 billion Canadian dollars ($20 billion) of U.S. goods, sharply escalating a trade fight between two long-standing allies.

The tariffs took effect at 12:01 a.m. on Aug. 8 local time and cover about 700 imported products. The rates are 50% for milk, perfume, video game consoles, golf clubs, fishing rods, jackets and T-shirts, as well as steel and aluminum. Some cheese, carpets, stoves, air conditioners and other appliances face 25% tariffs. Forklifts and industrial molds are subject to 15% duties. Some U.S. seafood products initially targeted at 25% were removed from the final list after opposition from the U.S. lobster industry.

The move responds to U.S. tariffs imposed from July 22 on hundreds of Canadian products worth about $20 billion. Prime Minister Mark Carney’s government has promoted a “dollar-for-dollar” approach, matching the scale of U.S. duties.

Exporters in Midwestern states such as Michigan and Ohio are expected to feel particular pressure because of their trade with Canada. Manufacturers in Michigan and Indiana, along with dairy producers in Wisconsin and Vermont, could also be affected.

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If you want the U.S. market, you have to produce here.

President Donald Trump has continued the pressure. He has warned that tariffs on Canadian cars and auto parts will rise to 50% next January and has threatened to halt trade with countries that run a trade deficit with the United States. On Truth Social on Aug. 7, he singled out Canadian aircraft maker Bombardier and said the company should produce in the United States if it wants access to the American market. Reuters reported that about half of the roughly 5,100 Bombardier aircraft operating worldwide are in the United States.

Trump has also pressed Canada through an executive order renaming the U.S. designation for Lake Ontario as “Lake America” and by raising what he called an imbalance between the Canadian and U.S. dollars. The two countries came close to a trade agreement last month, but talks collapsed over differences about last-minute demands, with each side blaming the other.

The immediate macroeconomic shock may be limited because the targeted goods account for only part of trade worth more than $700 billion last year. Bank of Canada Governor Tiff Macklem said the tariffs would raise costs for some companies, but noted that they applied to “a relatively narrow range” despite their high rates. The confrontation comes as the Trump administration considers additional tariffs on specific goods from other countries over alleged overproduction, with an announcement possible as early as this week.

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The tariffs are very high but apply to a relatively narrow range.