Canada braces for prolonged trade war as counter-tariffs on US goods take effect

Canada’s counter-tariffs on a broad range of US goods took effect Tuesday, with no clear sign that the two countries are close to ending a trade dispute that has already disrupted their relationship.

The duties cover nearly C$28 billion, or about $20 billion, worth of American products. They range from steel and furniture to cotton T-shirts, and reach as high as 50%. Fresh fish and lobster initially appeared on the list, but Canada later removed them after pushback from its seafood industry. The change showed the difficult balance Ottawa faces as it retaliates against its largest trading partner.

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durable

Officials in both countries say they want a deal, but talks have not resumed since collapsing in late August. Canadian Prime Minister Mark Carney said Canada remains focused on reaching an agreement that is “durable” and serves both countries’ interests. “We’re ready to sit down and strike that deal when the Americans are ready,” he told reporters last week.

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We're ready to sit down and strike that deal when the Americans are ready

US Trade Representative Jamieson Greer said the responsibility now lies with Canada. “We offered them the best deal, they looked at it square in the face and turned around,” he told Fox News, adding that communication with Canadian officials had been limited since the talks ended. In a separate CBC interview, Greer warned against retaliation and suggested Washington could ban imports of some Canadian products.

President Donald Trump has also threatened to halt US business with Canadian aircraft maker Bombardier unless it moves manufacturing to the United States. Bombardier contributed more than C$7 billion to Canada’s annual GDP in 2024, according to a PwC report commissioned by the company. Trump has criticized Canada in other Truth Social posts, including one calling the Canadian exchange rate “unacceptable”.

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We offered them the best deal, they looked at it square in the face and turned around

The new measures add to US tariffs of 25% on Canadian cars and trucks, as well as duties on Canadian steel, aluminium and lumber. Washington also imposed new 50% tariffs in late August on products including dairy, alcohol, hockey sticks and perfume. Canada’s “dollar-for-dollar” counter-tariffs apply to hundreds of US items and sit alongside existing Canadian taxes on finished American vehicles that do not comply with the USMCA, known as CUSMA in Canada. The United States and Canada have the world’s largest bilateral trading relationship, valued at nearly $900 billion in 2025.

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unacceptable