What tariffs will really cost Canadians and Americans

A series of new tariffs imposed by Canada in response to the escalating trade war between the US and Canada have drawn attention to their potential impact on both nations. Prime Minister Mark Carney announced retaliatory import taxes on various US goods, including vehicles, construction materials, and even household items. Should Trump's proposed 50% tariff hike on Canadian vehicles from January 2027 materialize, it would further burden the automotive industry, which already faces challenges from previous tariff increases.

Although Carney declined to match Trump's 50% threat, a 25% import tax on certain US vehicles has been in place since last year. Canada has also matched US rates on steel, aluminum, and lumber wood at 50%. The imposition of tariffs on construction materials may force builders to pass the increased costs onto consumers, potentially driving up housing prices.

The US imported $23 billion worth of wood products from Canada in 2024, with nearly half originating from Canada. However, tariffs on household items such as carpets, washing machines, furniture, fridges, and even kitchenware are unlikely to result in higher prices for consumers, as Canadians may opt for domestic alternatives instead.

While tariffs on wooden furniture may increase construction costs, the direct impact on households could be job losses in the forest industry, which employs nearly 200,000 people in Canada.