Canada to Impose Retaliatory Tariffs on US as Trade War Escalates

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Canada will impose dollar-for-dollar tariffs on a range of U.S. goods starting September 8, Prime Minister Mark Carney announced Saturday, after last-minute trade negotiations with Washington collapsed and new 50 percent U.S. tariffs on Canadian products took effect.

The Canadian measures will target U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, electronics and some other products. Ottawa said further details would be released in the coming days.

The move follows Washington's decision to impose 50 percent tariffs on about $20 billion of Canadian exports, affecting products including wine, furniture, dairy goods, cement, clothing, fishing equipment and hockey equipment. The duties cover roughly 5 percent of Canada's exports to the United States, according to the sources.

Carney said Canada had sought a deal but rejected what he described as the U.S. administration's final demands as "uneconomic" and "unfair." He said the proposals would have reduced the benefits available to Canada and included restrictions affecting its ability to pursue new trade agreements.

"We cannot accept what they have offered, and we will not give what they have asked," Carney said.

The negotiations also ran into disputes over the treatment of Canadian-made vehicles and issues involving Canadian culture, language and sovereignty. Carney said the U.S. position on larger vehicles would have left Canadian-made models, including Ford's F-350, F-450 and F-550 trucks and General Motors' Silverado, at a competitive disadvantage.

The breakdown leaves the two longtime trading partners facing a deeper confrontation. U.S. Trade Representative Jamieson Greer said no new talks were planned and that Washington was preparing measures in response to Canada's retaliation.

For Canada, the economic stakes are significant because nearly 70 percent of its exports go to the United States. Trade experts have warned that vulnerable industries, including softwood lumber and wine, could face severe pressure, with potential job losses and business closures. Canadian business leaders have also warned that companies will need to prepare for higher costs and disruption.

Carney acknowledged that the retaliation could raise costs and reduce choices for Canadian consumers, but said the government would support industries affected by the U.S. tariffs. Ottawa plans to announce support measures next week, with Carney indicating they could remain in place for years.

The dispute is also pushing Canada to look beyond its traditional dependence on the U.S. market. Carney has pledged to strengthen trade relationships with countries in Europe and Asia and diversify Canada's economy.

The Canadian response has received backing from political figures including Ontario Premier Doug Ford, who said accepting the U.S. proposal would have been harmful to Ontario's auto, steel and manufacturing sectors. Canada's opposition leader, Pierre Poilievre, also called on Canadians to unite against what he described as attacks on Canadian jobs and businesses.

The immediate economic impact will depend on how long the tariffs remain in place and whether the two governments eventually return to negotiations. For now, however, the collapse of talks and the scheduled September 8 Canadian measures mark a further escalation in a trade relationship that has become increasingly difficult to manage.