Canada formally imposes retaliatory tariffs on U.S. goods as trade war escalates

Canada has put tariffs of 15% to 50% on $20 billion worth of U.S. goods, opening a new front in the trade fight between the two North American neighbors.

The retaliatory measures took effect on Sept. 8 and cover products ranging from steel and furniture to clothing and electronics. They answer tariffs imposed by U.S. President Donald Trump last month on Canadian wine, dairy products, cement, clothing, fishing rods and hockey equipment. Those goods also represent about $20 billion, or 5% of Canada’s total exports to the United States.

The two governments have repeatedly blamed each other for derailing a trade agreement that appeared close to signature two weeks ago. The dispute has also cast uncertainty over the United States-Mexico-Canada Agreement, which is approaching its scheduled annual review after Trump refused to extend it for another decade.

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What we are most concerned about is an endless cycle of escalation.

“What we are most concerned about is an endless cycle of escalation,” said Michael Harvey, chief executive of the Canadian Agricultural and Food Trade Alliance and a member of Prime Minister Mark Carney’s advisory committee on bilateral economic relations with the United States. “At the same time, we fully understand that the prime minister needs to seek negotiating leverage.”

The uncertainty is already affecting Canadian investment and growth as the country faces an economy 13 times larger. Polls show Carney still enjoys broad public support, but analysts warn that confidence could fall quickly if the trade war’s effects reach deeper into daily life. A Reuters/Ipsos poll found that only 20% of Americans support Trump’s tariffs on Canadian goods.

Carney said last week that his government remained ready to sign a mutually beneficial agreement. Trump, meanwhile, threatened last month to raise tariffs to 50% on all cars, trucks and parts imported from Canada starting Jan. 1, and signed an executive order renaming Lake Ontario “Lake America.” A government source said no talks have yet resumed between ministers or officials from the two countries.

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At the same time, we fully understand that the prime minister needs to seek negotiating leverage.