The measures cover hundreds of items, from steel and furniture to cotton T-shirts, with rates reaching as high as 50%. Ottawa initially included fresh fish and lobster on the list but removed dozens of seafood items after pushback from the fisheries industry, a sign of the trade-off Ottawa faces as it retaliates against its largest trading partner.
Both sides say they want a deal but have made no progress since formal talks collapsed in late August. Prime Minister Mark Carney framed Ottawa's approach as seeking a durable pact and said Canada is ready to sit down when the Americans are ready. US Trade Representative Jamieson Greer told Fox News the ball is in Canada’s court, adding, "We offered them the best deal, they looked at it square in the face and turned around." Greer has also warned the United States could respond by banning some Canadian imports.
President Donald Trump has threatened to halt all US business with Canada-based airplane maker Bombardier unless it moved manufacturing to the United States. A report commissioned by Bombardier and produced by PwC put the company's contribution to Canada’s annual GDP in 2024 at over C$7bn.
The new Canadian tariffs are described by the government as dollar-for-dollar responses to US measures. Washington already imposes a 25% tax on Canadian cars and trucks and duties on Canadian steel, aluminium and lumber. In late August the US added 50% tariffs on a range of other Canadian goods including dairy, alcohol, hockey sticks and perfume.
Polls suggest a majority of Canadians back Ottawa’s retaliatory measures, but economists warn the counter-tariffs will push up prices on everyday items such as clothing, food and furniture. The Canadian Chamber of Commerce urged a targeted approach. "Businesses understand retaliation but don't want to see endless escalation," said CEO and President Candace Laing, adding that companies "are preparing for this trade dispute to last."
Canada entered the dispute from a position of economic resilience: GDP rose 3.3% in the second quarter and the economy added 181,000 jobs from April to July. However, roughly 41,000 jobs were lost in August, a period that coincided with the imposition of new US tariffs and the collapse of talks. The government credits a modest manufacturing gain to increased purchases of made-in-Canada products. July figures show the share of Canadian exports headed to the US fell to 66% from a pre-dispute average of 75%, reinforcing Prime Minister Carney’s stated aim to diversify trade away from the United States.
With no negotiation scheduled, businesses on both sides are scrambling to adapt to higher costs and the risk of further retaliation, leaving the next move to political leaders in Ottawa and Washington.
