Canada Announces Dollar-for-Dollar Retaliatory Tariffs Against US

Canada has announced it is countering Washingtons’ tariffs by imposing dollar-for-dollar counter-tariffs on more than 700 American goods amounting to CA$27.6 billion (US$19.9 billion).The new tariffs announced by Canadian Finance Minister François-Philippe Champagne during an Aug. 25 press conference will come into force on Sept. 8, increasing costs for imported American items ranging from seafood to furniture.Champagne also promised CA$7.5 billion in federal support for businesses affected by the tariffs.“We will support our workers, our businesses, and our industry with whatever it takes for as long as it takes,” he said.The announcement comes after trade talks between Ottawa and Washington collapsed on Aug. 21, with Washington imposing 50 percent tariffs on US$20 billion Canadian exports to the United States beginning on Aug. 22. The U.S. tariffs, affecting approximately 5 percent of Canadian exports to the United States, apply to a range of products including alcohol, dairy, honey, and hockey sticks.Champagne said counter-tariffs will be introduced on a sliding scale of 15, 25, and 50 percent, with the highest levies applied to specific dairy products, cosmetics, and select lumber products.American steel and aluminum products, which were formerly subject to a retaliatory tariff of 25 percent, will now rise to 50 percent as well. Canadian steel and aluminum are currently subject to 50 percent sectoral tariffs by the United States.Ottawa has published an extensive list of items that will be affected by counter-tariffs.Champagne said the “vast majority” of the products affected by the retaliatory tariffs could be substituted with a Canadian product.Canada had announced its intention to introduce counter-tariffs on Aug. 22. U.S. President Donald Trump said on Aug. 24 that his country will be imposing new 50 percent tariffs on Canadian cars, trucks, and auto parts beginning in 2027. Canadian autos are currently subject to 25 percent U.S. tariffs.‘Political Pressure’Canadian Industry Minister Mélanie Joly said the items Canada is targeting with the counter-tariffs are strategic, meant to put political pressure on Washington.“We’re also targeting products that will target states in the U.S., and so we’re being wise and strategic to put political pressure,” she said during the press conference.She also encouraged Canadians to purchase products made in Canada as the trade conflict intensifies.“When you choose a Canadian product, you’re not only putting pressure on the U.S. right now, you’re protecting jobs,” Joly said. “That’s what you can do, and that’s how we can launch this movement of resistance to what is happening.”Washington said the implementation of the new 50 percent tariffs on Aug. 22 were in response to Canada’s dairy supply management system, provincial bans on U.S. alcohol, and tariffs on U.S. autos.Ottawa has said it will protect the supply management system while defending the auto tariffs as a response to U.S. tariffs on Canadian autos, which Canada says violate the North American free-trade agreement. Ahead of the collapse of the trade talks, premiers had agreed to remove their bans on U.S. alcohol sales after being asked to do so by Prime Minister Mark Carney.After trade talks failed on Aug. 21, Carney said it was due to last-minute changes by Washington to omit medium- and heavy-duty Canadian trucks from tariff relief, U.S. objections to Canada’s French-language protection laws, and the White House wanting restrictions on Canada engaging in other international trade deals.Washington disputes this, saying it was Ottawa that backed away from commitments at the last moment, while rejecting Carney’s characterization of Washington’s position on French-language laws, calling it a “political” move.“Under President Trump, Canada has had the lowest tariffs for its exports to the U.S. market,” the Office of U.S. Trade Representative Jamieson Greer said.Help PackageOttawa is rolling out a CA$7.5 billion relief package for workers and businesses affected by the trade war, with a specific focus on small- and medium-sized enterprises, Joly said.The funding will include $1.5 billion via the Regional Tariff Response Initiative, disbursed through regional development agencies for non-repayable cash and liquidity grants and $500 million will be directed through the Business Development Bank of Canada (BDC) for immediate cash-flow and working capital loans.Jolie said another $2 billion is earmarked for the new Canada Strong Diversification Fund that accelerates “shovel-ready” capital maintenance projects so factories can retool and find new global markets and $3.5 billion has been set aside for rapid response funding and Employment Insurance (EI) extensions to help affected workers access income support.Eligible employers will also be able to obtain up to $1,000 for every employee to help cover the costs of training and administration in the execution of EI work-sharing and retention programs.“We’ll win by strengthening our economy here, by making what we need, and by facilitating buy Canadian, hire Canadian, and build Canadian,” Joly said.