Canada has brought retaliatory tariffs into force on nearly C$28bn (US$20bn; £15bn) worth of American goods, escalating a trade dispute that has left negotiations between the two countries stalled.
The new measures apply to hundreds of US imports, including steel, furniture and cotton T-shirts, with some tariff rates reaching 50%. The duties were described by Prime Minister Mark Carney as a dollar-for-dollar response to US tariffs imposed on Canadian products.
Canada initially included fresh fish and lobster among the affected imports, but later removed dozens of seafood products following objections from the domestic fisheries sector. The change reflected close commercial links between the two countries’ seafood industries, with some US-caught lobster sent to Canada for processing before returning to the American market.
Negotiations remain at an impasse
Canadian and US officials have said they want an agreement, but there has been no move to restart discussions since talks collapsed in late August. Carney said Canada remained prepared to pursue a durable deal serving both countries’ interests when the United States was ready to negotiate.
US Trade Representative Jamieson Greer said Canada had rejected what he called the best deal offered by Washington. He also warned against retaliation and suggested the United States could respond by prohibiting imports of certain Canadian goods.
US President Donald Trump has threatened to end US business with Canada-based aircraft manufacturer Bombardier unless it shifts manufacturing to the United States. He also criticised Canada’s exchange rate in social media posts.
Pressure on businesses and consumers
The United States currently imposes a 25% tariff on Canadian cars and trucks, as well as duties on steel, aluminium and lumber. In late August, Trump added 50% tariffs on products including dairy, alcohol, hockey sticks and perfume.
Canada’s latest duties come in addition to retaliatory tariffs already placed on finished US cars and trucks that do not comply with the Canada-US-Mexico free trade agreement, known as CUSMA in Canada and USMCA in the United States.
Economists have warned that the counter-tariffs could lift consumer prices for products such as clothing, food and furniture. The Canadian Chamber of Commerce said businesses understood the case for retaliation but did not want continued escalation, while also preparing for a prolonged dispute.
Canada and the United States have the world’s largest bilateral trading relationship, valued at almost US$900bn in 2025. Canada’s economy grew by 3.3% in the second quarter and added 181,000 jobs between April and July, according to the report. However, 41,000 jobs were lost in August, when new US tariffs took effect and trade talks collapsed.
The Canadian government has pointed to a modest manufacturing gain linked to increased purchases of Canadian-made products. Carney has also pledged to diversify trade beyond the US; in July, the share of Canadian exports headed to the United States fell to 66%, from a pre-trade-war average of 75%.
Source: BBC News
