World

Canada Implements Retaliatory Tariffs on US Goods Amid Stalled Trade Talks

By Today News Hours Editorial Desk

Canada's counter-tariffs on a wide range of American products took effect Tuesday, with no indication that a broader trade agreement with the United States is imminent. The retaliatory measures apply to nearly C$28 billion ($20 billion; £15 billion) worth of US goods, including steel, furniture and cotton T-shirts, with tariff rates reaching as high as 50%. Fresh fish and lobster were initially included but were later removed from the list after objections from Canada's seafood industry, reflecting the delicate balance Ottawa must maintain while retaliating against its largest trading partner.

Both Canadian and US officials have expressed a willingness to reach a deal, but talks have not resumed since they broke down in late August. Prime Minister Mark Carney told reporters last week that Canada continues to seek an agreement that is "durable" and beneficial to both countries. "We're ready to sit down and strike that deal when the Americans are ready," he said.

US Trade Representative Jamieson Greer said Thursday that responsibility for reviving negotiations lies with Canada. "We offered them the best deal, they looked at it square in the face and turned around," Greer told Fox News, noting minimal communication with Canadian counterparts since the talks collapsed. In a separate interview with Canada's CBC, Greer warned against further retaliation and suggested the US could respond by banning imports of certain Canadian products.

President Donald Trump added to tensions Monday by threatening to halt all US business with Canadian aircraft manufacturer Bombardier unless the company relocated its manufacturing to the United States. Bombardier is one of Canada's largest companies, contributing more than C$7 billion to the country's GDP in 2024, according to a PwC report commissioned by the firm.

Over the weekend, Trump made additional critical remarks about Canada on his Truth Social platform, calling the Canada-US exchange rate "unacceptable" and sharing a map depicting Canada, Mexico and Greenland overlaid with the American flag.

Canada and the US share the world's largest bilateral trading relationship, valued at nearly $900 billion in 2025. With new US tariffs and Canadian countermeasures now in force, businesses on both sides are adjusting to the changing landscape. The US currently imposes a 25% tariff on Canadian cars and trucks, along with tariffs on Canadian steel, aluminum and lumber. In late August, Trump introduced additional 50% tariffs on goods such as dairy products, alcohol, hockey sticks and perfume.

Canada's new tariffs, described by Carney as "dollar-for-dollar," apply to hundreds of US products and supplement existing retaliatory taxes on American-made vehicles that do not comply with the Canada-United States-Mexico Agreement (known as USMCA in the US and CUSMA in Canada).

Surveys indicate that most Canadians support the government's retaliatory approach, though economists caution that the new tariffs will raise consumer prices for everyday items including clothing, food and furniture. The Canadian Chamber of Commerce has urged the government to pursue a targeted rather than broad approach to retaliation. "Businesses understand retaliation but don't want to see endless escalation," said Chamber President and CEO Candace Laing, adding that companies are preparing for the dispute to continue for some time.

Concerns from the fisheries sector prompted Canada to revise its tariff list, removing dozens of seafood products to avoid harming its own economy. The lobster industries in both countries are closely intertwined, with American-caught lobster frequently processed in Canada before being shipped back to the US for sale.

Prior to the latest round of tariffs, Canada's economy had shown resilience, with GDP growing 3.3% in the second quarter and 181,000 jobs added between April and July. However, approximately 41,000 jobs were lost in August, coinciding with the introduction of new US tariffs and the breakdown of trade negotiations. The manufacturing sector saw a modest increase, which the government attributes to greater consumer and business demand for Canadian-made products.

Carney has pledged to diversify Canada's trade relationships away from reliance on the US. Figures from July show that the share of Canadian exports headed to the US fell to 66%, down from a pre-trade war average of 75%.