Canada has unveiled sweeping retaliatory tariffs of up to 50 per cent on roughly C$27.6bn (about US$20bn) worth of American goods, matching President Donald Trump’s levies “dollar for dollar, rate for rate” after trade talks between the two countries collapsed last week.
Announcing the countermeasures, which cover hundreds of product categories from steel and aluminium to dairy, appliances, seafood and electronics, Canadian Finance Minister François-Philippe Champagne insisted Ottawa’s response was “proportionate, targeted and strategic”, telling reporters: “Canada must respond, and today we are, in a proportionate, targeted, and strategic way.” The tariffs, ranging from 15 to 50 per cent, are due to take effect on September 8.
Champagne said the measures were 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”, adding: “It’s all about fairness. It's all about level playing field.”
“We got attacked”
The retaliatory package follows the collapse of negotiations late last Friday night, just hours before Washington’s own deadline for imposing 50 per cent tariffs on Canadian goods lapsed. Speaking after that deadline passed, Prime Minister Mark Carney branded the US tariffs “a miscalculation”, accusing Washington of tabling terms that were “uneconomic, unfair, and undermined the net benefits for Canada”. Asked by reporters whether Canada was effectively going to war with its closest ally, Carney responded: “Because we were attacked.” He has since said Canada will not accept an “attitude at the negotiation table that Canada is a subsidiary of the United States.”
President Trump, for his part, lashed out on Truth Social, writing: “Canada wants the benefits of being a State, without being one!!! They have also charged our great farmers, for many years, massive amounts of Tariffs. No more!!!” He later escalated further, telling Canadian leaders to "fall in line" or face consequences he described as "far WORSE" than the tariffs already imposed, and claimed Canada had been “ripping off” the US for decades, calling it “easily the most difficult and unreasonable” country he deals with.
US Trade Representative Jamieson Greer went further, telling CNBC three days later that it was Canada, not Washington, that had wrecked the deal. “They wanted more,” Greer said, arguing the dispute could be traced back to Canada's earlier restrictions on American alcohol, dairy and autos.
How the talks unravelled
The collapse capped nearly two weeks of what officials on both sides had described as intensive, often optimistic negotiations – a marked reversal from earlier in the week, when Trump had briefly paused the tariffs and declared on social media that the two countries “have a DEAL!”
According to Canada’s Prime Minister's Office, negotiators had been pushing for the removal of Section 338 tariffs altogether, alongside a lower rate on steel and aluminium imposed under Section 232 of the US Trade Act. Bloomberg had reported mid-week that American negotiators had agreed in principle to cut tariffs on cars and metals from 25 to 15 per cent.
On the table, according to Greer’s own account, was a package that would have delivered significant tariff reductions on steel, aluminium, autos and lumber; closer supply-chain coordination on aerospace; joint action against unfair trade practices and forced-labour imports; cooperation on critical minerals; and the formal launch of long-awaited USMCA renegotiation talks. Carney insisted the offer still fell short, saying it “called into question the reliability of any deal”.
The relationship had already been fraying for months. Talks were briefly derailed entirely in October 2025 after the Trump administration accused Ontario of running a misleading advert quoting former President Ronald Reagan on the dangers of tariffs, prompting Washington to briefly “terminate” negotiations altogether. Carney has since acknowledged that Canada is having to rethink its economic reliance on the US, telling Canadians that the government understood that America “is altering all its trade relationships”.
What happens next
Canada has since confirmed the details of its retaliation: 50 per cent counter-tariffs on steel, aluminium, furniture, clothing and apparel; 25 per cent on dairy, appliances, cheese and fish; and 15 per cent on other goods including rubber and machinery parts, covering more than 700 categories in total.
The economic fallout is likely to be felt on both sides of the border. US tariffs now touch everyday Canadian exports including wine, furniture, cement, fishing rods and hockey equipment, while Canada’s counter-measures will raise costs for American exporters of steel, dairy and farm machinery. Carney has warned that retaliation “will raise costs and reduce choice for Canadians”, and Ottawa has earmarked C$25bn to help workers and businesses absorb the shock. Analysts at Deloitte have separately projected Canadian economic growth slowing to around 1.5 per cent in 2026.
With no new talks scheduled and both governments dug in, the immediate outlook is for a prolonged period of elevated tariffs on both sides of the 49th parallel – and a Canadian economy increasingly focused, in Carney’s words, on “diversifying” away from its dependence on the United States.
