Canada hits US with $20bn in retaliatory tariffs as trade war escalates

Canada hit back on Tuesday with retaliatory tariffs on about $20bn worth of US annual imports and rolled out aid for businesses and workers, matching Washington’s latest duties dollar-for-dollar.

The counter-tariffs on US goods take effect on September 8 and impose duties of 15%, 25% and 50% across about 700 products imported from south of the border, a government statement said.

US President Donald Trump’s new 50% tariffs on $20bn of Canadian imports took effect on Saturday after talks between the two countries collapsed.

The new tit-for-tat tariffs mark a new low in relations between the longtime allies, and Trump earlier on Tuesday threatened to rename Lake Ontario , which straddles both countries, “Lake America”.

“Our dollar-for-dollar, rate for rate counter-tariffs as well as a multibillion-dollar support package will protect workers, farmers, families, and businesses,” Canada’s finance minister François-Philippe Champagne said.

The White House and the US trade representative did not immediately respond to a request for comment.

Canada levied the 50% tariffs on steel, aluminium, furniture and clothing, set the 25% tariffs on cheese, appliances and some seafood, and placed the 15% tariffs on electronics and tools, a Canadian government official told reporters.

Trump’s new tariffs are relatively narrow, affecting roughly 5% of Canada’s exports to the US. But trade analysts say they could have severe, concentrated effects on some sectors that are already struggling like wood products, particularly kitchen cabinet makers.

Canada’s retaliatory tariffs, calculated using 2024 trade figures, cover goods accounting for nearly 4.5% of Canada’s imports from the US.

Industry minister Melanie Joly said the counter-tariffs were primarily aimed at protecting Canadian businesses but were also aimed at applying political pressure before Americans vote in the November 3 midterm elections.

“We need to make sure that the competitors don’t have access to the Canadian market in a better way than their own ... products, and that’s why the retailers need to show that from Canada,” she said.

“Second, we’re also targeting products that will target states in the US and so we’re being wise and strategic to put political pressure, and that’s why we think it’s the right thing to do right now.”

The Canadian tariffs will also cover some prepared foods, perfumes and toiletries, plastics, lumber, wood pulp and paper products, carpets and clothing.

The list also targets industrial goods including iron and steel, aluminium, hand tools and other metal products, machinery and electrical equipment, as well as rail engines, motorcycles, furniture and gaming equipment, government documents showed.