Canada's dollar-for-dollar counter-tariffs on US goods take effect

Canada lost 41,000 jobs in August amid new US tariffs

Canada’s retaliatory tariffs on nearly C$28bn ($20bn; £15bn) of American goods took effect Tuesday, applying duties as high as 50% to products from steel to furniture to cotton T-shirts. Prime Minister Mark Carney said the counter-measures respond to duties imposed by President Donald Trump, with no movement toward resuming bilateral trade talks since they collapsed in late August.

Carney said Canada is still seeking a trade pact with the United States that is “durable” and in the best interests of both countries. “We’re ready to sit down and and strike that deal when the Americans are ready,” Carney told reporters last week. Carney described the new duties, which were applied to hundreds of US items as of midnight Tuesday, as “dollar-for-dollar” retaliation.

US Trade Representative Jamieson Greer said the ball is in Canada’s court. “We offered them the best deal, they looked at it square in the face and turned around,” Greer said in an interview with Fox News on Thursday. Greer said communication with Canadian counterparts has been sparse since the talks collapsed. In a separate interview with Canadian broadcaster CBC, Greer cautioned against retaliation and suggested the United States might respond by banning the import of some Canadian products.

The final list of targeted US goods was revised before it took effect. Fresh fish and lobster were originally included, but Canada removed those items after pushback from its seafood industry. The lobster industries in Canada and the United States are heavily interdependent, with American-caught lobster often sent north for processing before being shipped back and sold in US markets.

Trump on Monday threatened to halt all US business with Canada-based airplane maker Bombardier unless the company moved its manufacturing south of the border. Bombardier contributed more than C$7bn to Canada’s annual GDP in 2024, according to a PwC report commissioned by the company.

Canada’s counter-tariffs sit atop an existing set of US duties. The United States already imposes a 25% tax on Canadian cars and trucks, plus duties on Canadian steel, aluminum and lumber. In late August, Trump imposed new 50% tariffs on other Canadian goods including dairy, alcohol, hockey sticks and perfume. Canada had earlier placed retaliatory taxes on finished American cars and trucks that do not comply with the United States-Mexico-Canada Agreement, known as USMCA in the United States and CUSMA in Canada.

Canada’s economy entered the latest round of tariffs with mixed signals. Canadian GDP grew 3.3% in the second quarter, and Canada gained 181,000 jobs from April through July. But the country lost roughly 41,000 jobs in August, a period that coincided with the new US tariffs and the collapse of trade talks. Manufacturing saw a modest gain, which the Canadian government attributes to consumers and businesses buying more made-in-Canada products.

Economists have warned that Canada’s counter-tariffs will raise consumer prices on everyday goods including clothing, food and furniture. Polls suggest the majority of Canadians support imposing retaliatory tariffs on the United States.

The Canadian Chamber of Commerce has urged the Carney government to take a surgical approach to retaliation. “Businesses understand retaliation but don’t want to see endless escalation,” Chamber CEO and President Candace Laing said in a statement to the BBC on Friday, adding that businesses “are preparing for this trade dispute to last.”

Carney said he would diversify Canada’s trade away from the United States. July figures show the share of US-bound Canadian exports dropped to 66%, from an average of 75% before the trade war. The two countries share the world’s largest bilateral trading relationship, valued at nearly $900bn in 2025.

Trump took aim at Canada in a series of Truth Social posts over the weekend, including one that called Canada’s exchange rate with the United States “unacceptable.” Another post showed a map of North America — including Canada and Mexico — and Greenland all overlaid with the US flag.