Canada's retaliatory tariffs on a range of US goods took effect on September 8, 2026, with no indication of a trade agreement being reached. 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 after feedback from the seafood industry, highlighting the challenges Canada faces in retaliating against its largest trading partner.
Both US and Canadian officials have expressed a desire to negotiate a deal, but discussions have not resumed since talks collapsed in late August. Prime Minister Mark Carney stated that Canada seeks a durable agreement that benefits both nations, saying, "We're ready to sit down and strike that deal when the Americans are ready."
US Trade Representative Jamieson Greer remarked that the US had offered Canada a favorable deal, which Canada declined. He noted that communication has been limited since the breakdown of talks. In a separate interview, Greer warned against retaliation, suggesting that the US might respond by banning imports of certain Canadian products.
President Donald Trump recently threatened to stop all US business with Bombardier, a major Canadian airplane manufacturer contributing over C$7 billion to Canada's GDP in 2024, according to a report by PwC.
The ongoing trade dispute has led to heightened tensions, with Trump criticizing Canada's exchange rate and making other remarks on social media. The bilateral trading relationship between Canada and the US is valued at nearly $900 billion as of 2025.
With the new tariffs now in effect, businesses on both sides are adjusting to the changes. The US has imposed a 25% tax on Canadian cars and trucks, along with tariffs on steel, aluminum, and lumber. In August, Trump introduced new 50% tariffs on various goods, including dairy and alcohol.
Canada's counter-tariffs, described by Carney as "dollar-for-dollar," will affect hundreds of items from the US and add to existing tariffs on non-compliant American vehicles under the USMCA/CUSMA agreement. Polls indicate that most Canadians support retaliatory tariffs, although economists warn that these measures could increase prices for consumers on everyday goods.
The Canadian Chamber of Commerce has advised the government to adopt a measured approach to retaliation, emphasizing that businesses are preparing for a prolonged trade dispute. The fisheries industry successfully lobbied for the removal of several seafood items from the counter-tariffs to mitigate negative impacts on the economy.
Despite the trade tensions, Canada's economy showed resilience prior to the tariffs, with a GDP growth of 3.3% in the second quarter and the addition of 181,000 jobs from April to July. However, approximately 41,000 jobs were lost in August, coinciding with the new US tariffs and the collapse of trade negotiations. Manufacturing saw a slight increase, attributed to rising demand for Canadian-made products. Carney has committed to diversifying Canada's trade relationships, with recent data indicating a decrease in the share of Canadian exports going to the US, dropping from an average of 75% to 66% in July.