Canada Imposes $19.9 Billion Counter-Tariffs on US Goods in Escalating Trade War

Canada has announced retaliatory tariffs on $19.9 billion worth of US goods, set to take effect on September 8, as trade negotiations with Washington officially collapse.

Canada has announced sweeping retaliatory tariffs against the United States, escalating the ongoing trade war between Washington and Ottawa. The new duties will target hundreds of products across multiple key industries.

On Tuesday, the Canadian government confirmed it will impose tariffs on 27.6 billion Canadian dollars ($19.9 billion) worth of US goods, matching “dollar for dollar” the new duties recently imposed by the Trump administration. In tandem, Ottawa unveiled a new financial support package to assist businesses navigating the economic fallout of the trade conflict.

The counter-tariffs will affect more than 700 products, targeting key sectors including steel and aluminum, dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics. The new tariffs will range from 15 percent to 50 percent, with implementation scheduled for September 8.

To cushion the blow for domestic businesses, the Canadian government also announced a 7.5 billion Canadian dollar ($5.42 billion) funding package designed to help small- and medium-sized enterprises mitigate the financial risks associated with the new trade barriers.

Negotiations Deteriorate

The escalation follows a series of aggressive moves by US President Donald Trump, who imposed 50 percent tariffs on Canadian goods worth $20 billion over the weekend, just days after announcing a tentative trade deal.

On Monday, Trump announced further tariffs on Canadian automobiles, doubling existing rates to 50 percent effective January 1. The president has also used increasingly confrontational rhetoric, referring to Prime Minister Mark Carney as “Governor Carney” and reviving long-standing jokes about annexing Canada as the “51st state.” Additionally, Trump proposed renaming Lake Ontario to “Lake America.”

On Tuesday, Trump claimed on Truth Social that the US has lost $60 billion annually to Canada over the past decade. However, according to Statistics Canada, Canada actually maintains a trade surplus with the US of 9.9 billion Canadian dollars ($7.1 billion). Al Jazeera reached out to the White House for clarification but did not receive a response.

US Consumers Feel the Pinch

The economic impact of the tariffs is expected to be felt directly by American businesses and consumers. While cars and auto parts were initially exempt from the weekend tariffs, they remain a major point of contention between the two nations.

As the largest purchaser of US-made vehicles, Canada’s reduced demand could place significant pressure on American automakers. Furthermore, US households are expected to face higher prices on approximately 550 consumer goods imported from Canada, including ice skates, toilet paper, certain alcoholic beverages, and paint.

According to a report by the Kiel Institute for the World Economy, an economic think tank, US importers and consumers absorb a staggering 96 percent of the tariff burden, which could drastically affect American households.

Markets React

Gold prices, traditionally viewed as a safe haven during times of economic uncertainty, trended upwards on Tuesday, recovering from an earlier 1 percent drop to sit down just 0.03 percent at $4,696 per ounce.

The US dollar remained relatively stable, dipping slightly by 0.04 percent to 98.96, while the Canadian dollar index rose correspondingly by 0.04 percent to 72.27.

On Wall Street, the Nasdaq gained 0.5 percent, the Dow Jones Industrial Average remained flat, and the S&P 500 rose by 0.2 percent. In Toronto, the S&P/TSX Composite Index was up 0.6 percent.

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