Canada Implements Counter-Tariffs on US Goods Amid Ongoing Trade Tensions

Canada's retaliatory tariffs on a range of US goods came into effect on September 8, 2026, with no indication of a trade deal forthcoming. The counter-tariffs will apply to nearly C$28 billion (approximately $20 billion) worth of American products, including steel, furniture, and cotton T-shirts, with tariffs reaching as high as 50%. Fresh fish and lobster were initially included but were removed from the list following concerns from the Canadian seafood industry. Both US and Canadian officials have expressed a desire to negotiate a deal, but no progress has been made since talks collapsed in late August. Prime Minister Mark Carney stated that Canada is seeking a durable agreement that benefits both nations, emphasizing readiness to negotiate when the US is prepared. US Trade Representative Jamieson Greer indicated that the US has made its best offer, which Canada declined, and warned of potential US retaliation against Canadian products. President Donald Trump threatened to halt business with Canadian airplane manufacturer Bombardier unless it relocated production to the US. Bombardier contributes over C$7 billion to Canada's GDP, according to a report by PwC. The ongoing trade conflict has led to increased tariffs on both sides, with the US imposing a 25% tax on Canadian cars and trucks, as well as tariffs on steel, aluminum, and lumber. In August, Trump introduced new 50% tariffs on various goods, including dairy and alcohol. Canada's counter-tariffs are described by Carney as 'dollar-for-dollar' and will affect hundreds of items from the US, in addition to existing taxes on non-compliant American cars and trucks under the USMCA/CUSMA agreement. Polls indicate that a majority of Canadians support retaliatory tariffs against the US, although economists warn that these measures could increase prices on everyday items. The Canadian Chamber of Commerce has advised a careful approach to retaliation, expressing concern over the potential for escalating trade disputes. The fisheries industry successfully lobbied for the removal of seafood items from the tariffs to protect its economic interests. Despite the trade tensions, Canada's economy had shown resilience prior to the tariffs, with a GDP growth of 3.3% in the second quarter and 181,000 jobs added from April to July. However, approximately 41,000 jobs were lost in August, coinciding with the new US tariffs and the breakdown of trade negotiations. Manufacturing saw a slight increase, attributed to a rise in domestic consumption. Carney has committed to diversifying Canada's trade relationships, as evidenced by a decrease in the share of Canadian exports going to the US, dropping from an average of 75% to 66% in July.