The Canadian government announced that it will match "dollar for dollar" tariffs, with rates of up to 50%, as a direct response to tariffs imposed by President Donald Trump last week on Canadian imports, while the White House contended that Trump is “ending Canada’s free ride.”
The tariffs from Canada are expected to hit more than $27 billion in goods starting Sept. 8th.
The counter-tariffs include sectors Canada contends are most affected by U.S. tariffs. It includes steel, dairy, paper and appliance products. Tariffs range from 15 to 25 and 50%. Among the products that will get the full 50% tariffs are toilet paper, wood flooring and some dairy products.
Canada said it had to impose counter-tariffs to protect its workers, but it called the measures proportionate, targeted and strategic.
"Canada's counter tariffs are designed primarily to provide protection for Canadian industry impacted by U.S. tariffs and allow them to compete against U.S. products in the Canadian market. It's all about fairness. It's all about level playing field. It's all about supporting Canadian workers and Canadian businesses," said Minister of Finance and National Revenue of Canada François-Philippe Champagne.
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The Trump administration argued Canada chose “retaliation over partnership.”
“I deal with many countries, and Canada is easily the most difficult and unreasonable. They feel entitled, but they are not a State, and will be entitled no longer!” Trump wrote on Truth Social.
It remains to be seen if the U.S. reacts further. USTR Amb. Jamieson Greer told reporters Monday that “…we’re preparing options for the president.”
Earlier Tuesday, President Trump also said he is considering renaming Lake Ontario to “Lake America.”
“We'll always call it Lake Ontario. Period,” said Mélanie Joly, Canadian Industry Minister
The deepening trade rift between the countries comes after trade talks broke down, after officials just days prior touted progress resulting in a pause until Aug. 21st of U.S. Section 338 tariffs imposed on its northern neighbor. Each blamed the other.
However, Prime Minister Mark Carney suspended trade negotiations, alleging that the U.S. proposed unfair terms and “…asked too much and offered too little.”
“We were willing to drop our remaining retaliatory tariffs on strategic sectors – particularly steel, aluminum, and autos – if the United States substantially lowered theirs to levels that made it economic for Canadian companies to export to the U.S. In exchange for a fair deal, we would encourage the provinces to return U.S. alcohol to the shelves. And we would take administrative measures to protect supply management without changing the system itself, the U.S. quotas, or the tariffs that would apply,” Carney said Monday.
Greer alleged that “new demands and walk backs of other commitments by Canada have upended the careful balance reached in past days” despite an offer to reduce tariffs on steel, aluminum, autos and lumber.
Both the U.S. and Canada have integrated supply chains, with automobiles and other goods frequently crisscrossing the border for production, through Greer said US-imposed tariffs cover “about 5 percent of Canadian trade and only 0.06 percent of US overall consumption.”
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U.S. Secretary of Agriculture Brooke Rollins acknowledged concern amongst farmers over the trade situation.
“There's no doubt that it causes concern amongst our farmers and ranchers as it is a lot unknown out there. But as the group of men and women in communities that have been his most avid supporters from the moment he came down the escalator in 2015, he has our ag producers at the very top of the list,” Rollins told Scripps News. “And we've seen this with all of the trade deals. Every one of those 20 new trade deals, whether it's soybeans or cotton or beef or dairy, ag is always at the top. And that's because he has made it so. And I believe strongly that once they finish this next round of negotiations or whatever you wanna call it, that America will certainly be the better for it, and that our farmers and ranchers will benefit the most."
Former Commerce Secretary Wilbur Ross, who served during Trump’s first term, believes it’s a mistake for Canadians.
“The U.S. offered them most favored nation on the items that they're most concerned with, and they turned it down. They were looking for something beyond favored nation, and I just don't think that's in the cards,” Ross said.
What’s been seen in the trade negotiations is not unusual, but Canada’s retaliation is, according to Christopher Sands, a visiting fellow at in the Global Economy and Development program at the Brookings Institution focused on U.S.-Canada trade.
“Most of the countries that the United States has been negotiating with have not chosen to retaliate. In fact, for the longest time, it was Canada and China as the only two countries that pushed back, and clearly that annoys the Trump administration. They would rather the candidates didn't fight back. But Canadians live in the same media environment we do, so they're watching the same television. I think a lot of Canadians felt that it was important to stand up for themselves on this and to push back,” Sands said.
But Sands is hopeful there’s time for agreement.
“All the things that President Trump has said about Canada are not incorrect in regard to size, but it's about pride, and I think that's very important that Canada step forward. But that does not mean that we're going straight to nuclear armageddon trade war because the Canadians don't impose their tariffs until September 8th, and in fact, there's been discussion that the president will have new tariffs, but they may not take place take effect until if he retaliates against Canadian retaliation until January of 2027,” Sands said. “So that's the sign that negotiators are building in time to come to a reasonable agreement, and I'm still hopeful that that's possible.”
