Canada announces $20 billion retaliatory tariffs on US goods as trade war escalates

Canada has answered Donald Trump's latest tariff salvo with one of its own, announcing nearly $20 billion in retaliatory duties on US goods while unveiling a multibillion-dollar package to cushion Canadian businesses and workers from the fallout.The counter-tariffs, worth C$27.6 billion ($19.94 billion), will take effect on September 8 and cover about 700 products imported from the US, with duties ranging from 15 per cent to 50 per cent. The measures deepen an increasingly bitter trade confrontation between two closely linked economies and mark another low in Canada-US relations.OTTAWA TARGETS 700 AMERICAN PRODUCTSThe Canadian measures mirror the scale of Washington's latest tariffs, which took effect Saturday after negotiations between the two countries collapsed. The new duties will hit a range of American products. Tariffs of 50 per cent will apply to goods including steel, aluminium, furniture and clothing, while cheese, appliances and some seafood will face 25 per cent duties.Electronics and tools will be subject to a 15 per cent tariff, a Canadian government official told news agency Reuters. Ottawa has deliberately kept its retaliation targeted rather than imposing tariffs on politically and economically sensitive Canadian exports such as energy or potash. Finance Minister Francois-Philippe Champagne said the government had taken a proportionate approach, drawing on its experience in the trade dispute to identify which US goods should face counter-tariffs.He said the latest US duties could "disproportionately affect" small and medium-sized Canadian businesses, prompting Ottawa to pair the tariffs with a "substantial support package" to help companies remain competitive at home. "Our dollar-for-dollar, rate-for-rate counter-tariffs as well as a multi-billion dollar support package will protect workers, farmers, families, and businesses," Champagne said. He said keeping Canadian businesses competitive would remain a priority as the trade dispute unfolds.CANADA UNVEILS SUPPORT PACKAGE FOR DOMESTIC BUSINESSESAlongside the tariffs, Ottawa announced C$7.5 billion ($ 5.42 billion) in new and expanded financial measures for businesses and workers facing disruption from the trade fight. The package includes assistance for small and medium-sized businesses, funding to help companies manage cash flow and support for workers whose jobs could be threatened by the new US duties.The Canadian government is seeking to limit the damage to industries caught between rising costs and weaker demand while giving companies greater room to absorb the shock.TIT-FOR-TAT TRADE WAR DEEPENSThe latest escalation follows the collapse of trade talks that had appeared close to a deal. Trump had claimed an agreement was within reach, but unresolved disputes over autos, steel and broader trade policies ultimately derailed negotiations. Canada withdrew its negotiating team, accusing Washington of making demands that threatened its economic sovereignty.The US then imposed 50 per cent tariffs on about $20 billion of Canadian imports from August 22, prompting Prime Minister Mark Carney to describe the move as an economic attack. "You're at war when you get attacked. We got attacked," Carney said.The dispute is part of a trade fight that began in 2025, when Trump imposed tariffs on Canadian goods while citing concerns over border security and fentanyl trafficking. Tariffs are taxes on imported goods, meaning the cost can ultimately be passed on to businesses and consumers. Although much of the trade between the two countries is covered by the Canada-United States-Mexico Agreement (CUSMA), which was designed to keep commerce flowing with low or no tariffs, Washington has increasingly sought other legal avenues to impose new duties on Canadian products.- EndsWith inputs from agenciesPublished By: Shipra ParasharPublished On: Aug 25, 2026 20:52 IST