Canada slaps retaliatory tariffs on US goods worth US$20 billion as trade war intensifies

TIT-FOR-TAT?

Trump’s latest tariffs hit about US$20 billion in Canadian goods – or 5.5 per cent of its exports to the United States – after trade negotiations collapsed at the eleventh hour.

Under Canada’s planned response, US steel and aluminium products previously subject to a 25 per cent duty will soon face 50 per cent tariffs.

Goods facing 25 per cent tariffs include appliances, dairy products like cheese, as well as certain steel and aluminium derivative products.

A small category will see a 15 per cent duty, including electric equipment and tools.

These form about 7.3 per cent of Canada’s imports from the United States at 2024 levels.

But analysts warn of tit-for-tat escalation.

Already on Monday, Trump pledged to double tariffs on Canadian autos starting in 2027, up to 50 per cent from the current 25 per cent for non-US content.

Ontario Premier Doug Ford criticised Trump’s threat, saying he could “kiss my ass” and threatening an electricity export surcharge.

Trump lashed out at Ford and also referred to Carney as a “governor”, re-upping his inflammatory push for Canada to become the 51st US state.

Highlighting the animosity, Trump said Tuesday he was considering renaming Lake Ontario as “Lake America”.

The fresh US tariffs do not exempt products under the US-Mexico-Canada free trade agreement. They raise the US effective tariff rate on Canadian exports to 6.9 per cent from 5.1 per cent, Oxford Economics estimates.

Tariffs on plastics, electrical machinery, and wood and paper products contribute most to the increase.

“Manufacturers in Quebec, New Brunswick, and Ontario will be affected the most,” Oxford Economics said.