Canada will impose new retaliatory tariffs on about US$20 billion worth of U.S. goods after trade negotiations between Ottawa and Washington broke down, marking a fresh escalation in the dispute between the two major trading partners.
The Canadian government said the measures will take effect on September 8 and cover C$27.6 billion in U.S. imports, equivalent to roughly US$20 billion. Tariff rates of 15%, 25% and 50% will be applied depending on the product, matching corresponding U.S. duties rate for rate.
The measures target products across several sectors, including steel, aluminum, dairy products, appliances, agricultural equipment, pulp and paper, electronics, furniture and clothing.
American steel and aluminum products that were previously subject to a 25% Canadian tariff will face a 50% duty, while products including appliances, cheese, fish and seafood will be subject to 25% tariffs.
The Canadian response follows Washington's decision to impose 50% tariffs on C$27.6 billion of Canadian goods, effective August 22, after the two governments failed to reach a new trade agreement.
Canadian Finance Minister François-Philippe Champagne said Ottawa's measures were designed to match the latest U.S. tariffs while protecting Canadian businesses and workers affected by the trade dispute.
Canada suspended negotiations after saying new terms proposed by the United States did not offer an acceptable agreement. U.S. officials have disputed Canada's account of how the talks broke down, with both sides blaming the other for last-minute changes.
Alongside the tariffs, Ottawa announced a C$7.5 billion support package for Canadian workers and businesses affected by U.S. trade measures.
The programme includes C$1.5 billion in additional funding through the Regional Tariff Response Initiative, C$500 million in new liquidity support for businesses and C$2 billion for projects aimed at helping tariff-affected companies diversify and adapt. Another C$3.5 billion will support workers and employers affected by the trade disruption.
The latest measures deepen tensions between the United States and Canada, whose economies are closely linked through cross-border supply chains in industries including automobiles, metals, agriculture and manufacturing.
Canadian Prime Minister Mark Carney has acknowledged that retaliatory measures could increase costs and reduce consumer choice, while arguing that Canada needs to defend industries facing higher U.S. tariffs.
The dispute comes as Ottawa seeks to reduce its economic dependence on the United States and strengthen trade relationships with other international markets.
Several existing Canadian counter-tariffs, including measures covering automobiles, steel and aluminum, will remain in effect alongside the new duties.
The renewed tariff confrontation also raises concerns for businesses on both sides of the border, with companies facing higher import costs and greater uncertainty over future trading conditions.
Despite the latest escalation, Canadian officials have indicated that Ottawa remains open to reaching a negotiated agreement with Washington.
For now, the September 8 implementation date puts additional pressure on both governments to determine whether negotiations can resume before another round of tariffs begins affecting cross-border trade.
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