Canada Imposes Retaliatory Tariffs on US Goods Worth Billions

Canada has announced retaliatory tariffs against the United States as the trade war between the two countries escalates, affecting hundreds of products. On August 26, the Canadian government said it would impose tariffs on CA$27.6 billion (US$19.9 billion) of American goods, responding "dollar for dollar" to the new tariffs imposed by President Donald Trump. Canada also unveiled a financial support plan for businesses affected by the trade war.

According to the Canadian government, the retaliatory measures will impact more than 700 products, focusing on steel and aluminum, dairy, household appliances, farm equipment, pulp and paper, plastics, and electronics. Tariff rates will range from 15% to 50% and take effect on September 8.

The Canadian government also announced a new funding package of CA$7.5 billion (US$5.42 billion) to help small and medium-sized businesses mitigate the financial risks caused by the new tariffs.

The retaliatory measures come after President Trump imposed 50% tariffs on CA$20 billion worth of Canadian goods on August 23, just days after the two countries announced a trade deal to avoid higher tariffs. Earlier, on August 25, Trump also announced new tariffs on Canadian cars, doubling the current rate to 50% starting January 1, 2027.

In addition, Trump has made harsh comments aimed at Canada in recent days. On August 26, he said he was considering renaming Lake Ontario to "Lake America." He also referred to Prime Minister Mark Carney as "Governor Carney," repeating previous claims about annexing Canada as the "51st state." The same day, Trump asserted on social media that the U.S. has lost $60 billion to Canada each year over the past decade, while data from Statistics Canada shows Canada maintains a trade surplus with the U.S. of CA$9.9 billion (US$7.1 billion).

The U.S. tariffs are expected to affect American businesses and consumers. Cars and auto parts are exempt from the tariffs imposed on August 23, but they remain a point of contention between Washington and Ottawa. Canada is the largest market for U.S.-made cars, putting pressure on American automakers that rely on demand from Canada. U.S. households may face higher prices for 550 consumer products imported from Canada, including ice skates, toilet paper, alcoholic beverages, and paint.

Market reaction: Gold prices are trending higher after dropping nearly 1% earlier in the day, now at $4,696 per ounce. The U.S. dollar fell slightly by 0.04% to 98.96, while the Canadian dollar index rose 0.04% to 72.27. On Wall Street, the Nasdaq rose 0.5%, the Dow Jones was flat, and the S&P 500 gained 0.2%, while in Toronto, the S&P/TSX Composite Index rose 0.6%.