Canada activates 27.6 billion dollar tariff package against US goods

Retaliatory tariffs on a broad range of American products entered into force on Tuesday, marking a significant escalation in the ongoing trade dispute between Washington and Ottawa. The new duties apply to hundreds of goods with a combined value of 27.6 billion Canadian dollars. The measures follow the collapse of trade negotiations last month, which had previously offered a potential resolution to the growing rift between the two longstanding allies.

The imposed rates vary between 15 per cent and 50 per cent, affecting sectors including dairy, agricultural equipment, paper, household appliances and electronics. Tariffs on steel, aluminium and iron products from the United States have doubled to 50 per cent. The highest rates have been applied to furniture, motorbikes, clothing and certain beauty products. The Canadian government described the action as a direct response to recent American levies on Canadian wine, hockey sticks and other key exports.

These countermeasures were triggered after the United States imposed 50 per cent tariffs on approximately 20 billion dollars worth of Canadian goods on 22 August. Those American duties were enacted under a rarely cited Depression-era law, hours after both sides failed to finalise a trade agreement. Officials in both countries have exchanged accusations of making untenable last-minute changes to a deal that was reportedly close to completion. Canada’s Department of Finance stated that the new tariffs are designed to protect domestic workers, producers and manufacturers by enabling them to compete more effectively against US products in the local market.

Existing Canadian counter-tariffs, including a 25 per cent duty on the politically sensitive automotive sector, remain in place. Tensions were further heightened on Monday when President Donald Trump called for a boycott of Canadian aircraft manufacturer Bombardier. In a post on Truth Social, the President demanded that the company build in the United States if it wished to access the American market. Bombardier responded by highlighting its employment of workers in more than 20 US states and its use of American components. The move also drew criticism from Republican senators in states where the company operates, including Kansas, where officials cited the significant local workforce supported by the firm.

According to the US Trade Representative’s office, the United States exported 333.6 billion dollars worth of goods to Canada in 2025, while importing 381.9 billion dollars from its northern neighbour. The two nations share trade in numerous sectors, including energy, vehicles, heavy machinery, aircraft, pharmaceuticals and food products. Economists note that while the affected goods represent a small portion of overall trade, small and medium-sized businesses in the impacted sectors face severe challenges. Ottawa announced a 7.5 billion Canadian dollar support package for businesses and workers last month, extending a previous 25 billion Canadian dollar measure introduced in response to the global tariff offensive that began in April 2025.