The United States imposed 50% tariffs on scores of Canadian imports on Saturday, hours after trade negotiations in Washington collapsed the previous day. The new levies target roughly $20 billion in goods, about 5% of Canada’s annual exports to its southern neighbour.
Prime Minister Mark Carney responded within hours, pledging that Canada would enact “dollar for dollar” retaliatory tariffs beginning September 8. He said he had walked away from a “bad deal” and accused Washington of starting a trade war.
The affected products span a long list published by the White House. They include hockey sticks, wine, cement, honey, seeds and other agricultural products, along with select makeup, perfumes, clothing, jewelry, furniture, cameras and fabric. Some of the goods had previously been protected under the US-Mexico-Canada Agreement.
Canada sends the vast majority of its goods exports to the United States, 72% last year, leaving its economy heavily exposed to shifts in cross-border trade policy. No further talks between the two governments are scheduled.
“Nearly all industries and professions are likely to see downstream effects from this spiraling trade dispute,” said Augustine Lo of the law firm Dorsey & Whitney, who advises clients on international trade. Higher import costs typically pass through to households as higher prices.
The breakdown extends a dispute that began early in President Donald Trump’s second term. He first threatened 25% tariffs on Canadian goods on his first day in office, then formalised them in February by declaring a national emergency over immigration and drug trafficking. A 30-day pause followed before the levies took effect in March.
Tensions grew after Trump repeatedly suggested Canada could become the “51st state” and threatened steep penalties if Ottawa pursued a trade arrangement with China. Trump also vowed to end negotiations over a television advertisement funded by the Ontario government that opposed his levies. The province later paused the campaign.
Carney has moved to reduce Canada’s reliance on the US market, outlining plans this month to double non-US exports over the next decade. Canadian officials describe the fresh American measures as a miscalculation and say the retaliatory package will match the scope of the US tariffs.
Canada’s dollar-for-dollar measures are scheduled to take effect September 8.