Canada unveils counter tariffs of 15% to 50% on US goods

Canada's government has unveiled counter tariffs of 15% to 50% on U.S. goods in response to escalating trade tensions. Prime Minister Mark Carney announced the measures, effective September 8, following President Donald Trump's imposition of 50% duties on Canadian products earlier this week. These retaliatory duties will target industries such as steel, dairy, and electronics. Canada also announced a US$5.4 billion aid package to support impacted firms and workers, emphasizing unity in their response to the challenge.

The U.S. tariffs, which affected about US$20 billion in Canadian goods (5.5% of exports), have strained bilateral relations. In retaliation, Canada will impose duties on U.S. steel and aluminium products (50%), appliances and dairy products (25%), and certain steel and aluminium derivatives (15%). Overall, these measures impact around 7.3% of Canada's imports from the U.S.

However, analysts warn of escalating tit-for-tat measures. Trump has pledged to double tariffs on Canadian autos to 50% from the current 25% for non-U.S. content. Ontario Premier Doug Ford has threatened a surcharge on electricity exports to U.S. states in response. Trump has also threatened to rename Lake Ontario as "Lake America" and has criticized Carney as a "governor."

The U.S. is Canada's largest trading partner, with Canadian exports to the U.S. accounting for 70% of total exports. Canada is the second-largest U.S. trading partner in goods, behind Mexico. While Canadians largely support Carney's decision to walk away from talks, some fear potential economic repercussions.