Canada hits back with 50% counter-tariffs on US goods

"We chose to stand up for Canadians", says Finance Minister Champagne as Canada announces upto 50% counter-tariffs on US goods

Ottawa, August 26

The Canadian government said it had suspended trade negotiations with the United States after Washington proposed new terms that were "not in Canada's best interest," effectively "asking too much of Canada, and offering too little in return."

"When the United States asked too much and offered too little, we chose to stand up for Canadians," Francois-Philippe Champagne, Canada's Minister of Finance and National Revenue, said in the release.

Champagne said Canada's response would include counter-tariffs as well as financial support for workers and businesses affected by the trade conflict.

"Our dollar-for-dollar, rate-for-rate counter-tariffs as well as a multi-billion dollar support package will protect workers, farmers, families, and businesses," he said.

Effective September 8, Canada will impose counter-tariffs of 15, 25 and 50 per cent on products targeted by US Section 338 and Section 232 tariffs, with the rate for each product matching the corresponding US rate.

The counter-tariffs will cover USD 27.6 billion in imports from the US and focus on sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.

Canada also announced a USD 7.5 billion package of new and enhanced measures to support workers and businesses affected by US tariffs, building on nearly USD 25 billion in support provided since the implementation of what the Canadian government called "unjustified" US tariffs.

The package includes an additional USD 1.5 billion through the Regional Tariff Response Initiative, a new USD 500 million liquidity stream under the Business Development Bank of Canada's Pivot to Grow programme and USD 2 billion through the new Canada Strong Diversification Fund.

The government will also introduce USD 3.5 billion in Rapid Response Supports for Workers and Employers, including extended and additional Employment Insurance temporary flexibilities, workplace training and enhancements to JobBank.gc.ca. A new Worker Retention and Retraining Program will also help employers retain their workforce.

The release said goods subject to 50 per cent counter-tariffs will include steel and aluminium products that were previously subject to a 25 per cent counter-tariff, as well as furniture and clothing and apparel.

Existing Canadian counter-tariffs against the US, including those on autos, will remain in place, while Canada's tariff remission framework will continue to be available to assess requests for exceptional relief, as per the press release.

The Department of Finance Canada said the primary objective of the counter-tariffs is to protect Canadian workers, producers and manufacturers "harmed" by US tariffs by putting them on a better competitive footing against US products in the Canadian market.

The escalation follows the United States imposing 50 per cent tariffs on roughly USD 20 billion worth of Canadian imports after the trade talks failed, with the measures affecting around five per cent of Canada's exports to the United States.

Trump on Monday further escalated the trade dispute after he announced that tariffs on Canadian cars, trucks, automotive parts and steel imports would be raised to 50 per cent from January 2027.

"Canada has been ripping off the United States of America for years," Trump said in a post on Truth Social, accusing Ottawa of imposing high tariffs on US farmers and agricultural products.

"On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%. Build in the U.S. and there are ZERO TARIFFS. Canada will be treated like a State no longer!" he said.

Trump also accused Canada of being among the most difficult countries for Washington to deal with on trade and argued that Ottawa was more dependent on the US market than the other way around.

"They feel entitled, and yet, WE DON'T NEED CANADA, THEY NEED US!" Trump said, adding that Canada conducts the overwhelming majority of its business with the United States.

— ANI