Key facts
- Canada will impose retaliatory tariffs on U.S. goods starting September 8.
- Trade talks between Canada and the U.S. collapsed due to last-minute U.S. demands.
- The U.S. previously imposed tariffs on Canadian goods.
- Canadian retaliatory tariffs will target U.S. exports such as steel, dairy, appliances, agricultural equipment, pulp and paper.
- Canada is providing C$7.5 billion in new funding for affected domestic companies.
Canada is preparing to impose retaliatory tariffs on U.S. imports as high as 50%, escalating a trade war after talks between the two North American economies collapsed. Canadian officials outlined the response, which will target approximately 700 products ranging from steel, dairy, appliances, agricultural equipment, pulp and paper to cosmetics and outdoor equipment, with the countermeasures set to impact C$27.6 billion worth of U.S. imports starting September 8.
Canadian Prime Minister Mark Carney stated that last-minute changes to proposed terms by the U.S. were "unfair, uneconomic, and called into question the reliability of any deal." The U.S. had previously imposed tariffs on Canadian goods, and President Donald Trump announced he was giving "serious consideration" to changing the name of Lake Ontario to "Lake America." Trump's frustration with Ontario stems from his feud with the province's premier, Doug Ford.
Both American and Canadian officials accused each other of making last-minute requests that ultimately killed the deal. U.S. officials claimed Canada "sneaked in asks for lower tariffs on heavy trucks." Prime Minister Mark Carney pointed to a power struggle between U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick for changing the terms of a deal that went from agreeable to no longer recognizable in 72 hours.
Canada is also introducing C$7.5 billion in new funding for domestic support programs to cushion the blow of the new tariffs for small and medium-sized Canadian companies. Businesses on both sides of the border had urged for a resolution, with the Canadian Chamber of Commerce warning that the tariffs would be detrimental to North American competitiveness. The breakdown in talks marks a significant escalation in trade tensions between the two closely integrated economies, with Canada sending roughly 70% of its exports to the U.S.