Canada's retaliatory tariffs worth $27.6 billion take effect as trade rift with U.S. deepens

Canada's retaliatory tariffs on a swathe of U.S. goods took effect on Tuesday after trade talks collapsed last month, as relations between Washington and Ottawa continue to sour.

The duties range from 15% to 50% across hundreds of U.S. products worth a total $27.6 billion, including dairy, agricultural equipment, paper, household appliances and electronics. Canadian tariffs on U.S. steel, aluminum and iron products doubled to 50%, while furniture, motorbikes, clothing and some beauty products were among the goods hit with the highest rate.

Canada called the move a "dollar for dollar" response to U.S. levies on its own goods, which have been targeted by Section 338 tariffs. Its Department of Finance said it would protect Canadian workers, producers and manufacturers by allowing them to better compete with U.S. products sold in the domestic market.

Existing Canadian counter-tariffs against the U.S., including 25% on the politically sensitive autos sector, remain in place.

Trade talks between the longstanding allies fell apart at the end of August, with officials on each side blaming one another for the failure to reach a deal and publicly disagreeing over which areas they could not find compromise.

The U.S. exported $333.6 billion worth of goods to Canada, and imported $381.9 billion from its northern neighbor. The pair share trade in many of the same sectors, including energy, vehicles, heavy machinery, aircraft, pharmaceuticals, gems and jewelry, furniture, clothing and a host of foods and drinks.

Economists say that while the impacted goods are a relatively small portion of overall trade, small- to medium-sized businesses and those in the most-impacted sectors face a severe blow.

Ottawa announced a $7.5 billion support package for businesses and workers last month, extending an existing $25 billion it provided in response to the U.S. global tariff offensive, which began in April 2025.

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