Canada’s retaliatory tariffs on $20B in US goods take effect

Canada's retaliatory tariffs on roughly C$27.6 billion ($20 billion) worth of American goods took effect at 12:01 a.m. ET on Tuesday, escalating an 18-month trade war between the two countries with no negotiations scheduled to resolve the dispute.bbc+1

The duties of 15%, 25%, and 50% apply to hundreds of U.S. products, including steel, aluminum, dairy, furniture, clothing, electronics, and agricultural equipment. Ottawa said the measures match the latest U.S. tariffs "dollar for dollar" and "rate for rate," responding to the 50% duties President Donald Trump imposed on Canadian goods on August 22 after trade talks collapsed.finance.yahoo+1

What's Targeted

American milk, perfume, video game consoles, golf clubs, fishing rods, and aluminum face the steepest 50% rate. Cheese, carpets, and appliances such as stoves and air conditioners are subject to 25% tariffs, while forklifts and industrial molds face 15% duties. Canada removed some seafood products from the initial list after pushback from its lobster industry.cbsnews+2

Economists say the tariffs could hit manufacturers in Midwestern states like Michigan and Indiana particularly hard, as well as dairy producers in Wisconsin and Vermont. The targeted goods amount to nearly 6% of annual U.S. exports to Canada, according to the Associated Press.finance.yahoo+1

Trump Threatens Bombardier

On Monday, Trump threatened to block sales by Canadian aircraft maker Bombardier in the United States. "NO MORE SELLING BOMBARDIER IN THE UNITED STATES!" he wrote on Truth Social, demanding the company move manufacturing south. Bombardier responded that it supports "tens of thousands of jobs across the United States" and spends more than $2.5 billion annually with approximately 2,800 American suppliers across 47 states.san+3

Treasury Secretary Scott Bessent dismissed the idea of a trade war with Canada, telling CNBC, "How are we going to be at war with Canada?" U.S. Trade Representative Jamieson Greer blamed Canada for the breakdown, telling CBC News there are currently no "open channels" between the two sides.rte+1

No End in Sight

Prime Minister Mark Carney suspended trade talks on August 21, saying U.S. negotiators had introduced last-minute restrictions on Canada's ability to make trade agreements with other countries. He said last week that discussions could resume "when the Americans stop doing memes, stop throwing shade, stop trying to be tough" and start being serious.bbc+2

Trump has threatened to raise tariffs on Canadian-made cars and auto parts to 50% starting in January. Canada's economy showed some resilience before the latest escalation, with GDP growing 3.3% in the second quarter, but the country lost about 41,000 jobs in August as the trade dispute intensified. Ottawa has announced a C$7.5 billion aid package to support affected businesses and workers.finance.yahoo+3