Canada has fired back at the United States with fresh tariffs on American goods. The new taxes took effect on Tuesday.
The measures target almost C$28bn worth of US products. They cover items such as steel, furniture and cotton T-shirts. Some products will face tariffs as high as 50%.
Fresh fish and lobster were initially included. However, Canada removed them after strong opposition from its seafood industry. The move shows how difficult the trade fight has become for Canada.Trade Talks Remain Frozen
Both countries say they still want a trade deal. However, there is currently no clear path back to negotiations.
Talks collapsed in late August after months of tension. Canadian Prime Minister Mark Carney said his country remains ready for a lasting agreement.
“We’re ready to sit down and strike that deal when the Americans are ready,” Carney said.
US Trade Representative Jamieson Greer sees things differently. He said Canada rejected what Washington considered its best offer.
“We offered them the best deal, they looked at it square in the face and turned around,” Greer told Fox News.
Greer also warned that the US could respond with more measures. He suggested some Canadian products could face import bans.
Trump Turns Up the Pressure
US President Donald Trump has also increased pressure on Canada. On Monday, he threatened to stop US business with Canadian aircraft maker Bombardier.
Trump wants the company to move some manufacturing operations to the United States. Bombardier is a major part of Canada’s economy.
The company contributed more than C$7bn to Canada’s GDP in 2024. That figure comes from a PwC report commissioned by Bombardier.
Meanwhile, Trump has criticised Canada’s currency exchange rate. He also shared a map showing Canada, Mexico and Greenland under the US flag.
The latest moves have unsettled businesses on both sides of the border. Canada and the US had nearly $900bn in bilateral trade in 2025.
Canadians Could Feel the Impact
The trade war could soon hit ordinary consumers. Economists warn that tariffs may increase prices for clothing, food and furniture.
The Canadian Chamber of Commerce has urged Ottawa to avoid endless escalation. Its CEO, Candace Laing, said businesses understand retaliation but want a targeted approach.
Canada’s economy had shown some strength before the latest tensions. GDP grew 3.3% in the second quarter.
However, the country lost about 41,000 jobs in August. That came as new US tariffs took effect and trade talks collapsed.
Carney now wants Canada to reduce its dependence on the US. In July, US-bound exports fell to 66%. Before the trade war, they averaged about 75%.
For now, businesses are preparing for a longer fight. Consumers may also have to brace for higher prices.
