U.S. drops objection to Canada’s French-language rules as trade talks seek new path

Canada announced sweeping counter-tariffs on $27.6 billion worth of American imports on Tuesday, matching Washington's latest duties dollar-for-dollar after trade negotiations between the two countries broke down and the United States imposed 50% tariffs on Canadian goods effective August 22.

Ottawa's Response

The retaliatory tariffs, set to take effect on September 8, will impose duties of 15%, 25% and 50% across roughly 700 categories of U.S. products, according to an official Canadian government announcement. Steel, aluminum, furniture and clothing face the highest 50% rate, while cheese, appliances and some seafood will be subject to 25% duties. Electronics and tools face the 15% tier.reuters+2

Finance Minister François-Philippe Champagne confirmed the government would match each U.S. tariff rate for rate. "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.tekedia

Alongside the tariffs, Ottawa unveiled a C$7.5 billion package of new and enhanced support for affected businesses and workers, including interest-free loans of up to C$2 million for qualifying businesses and expanded funding through regional development agencies. The package builds on nearly C$25 billion in support previously announced since the trade dispute began.canada+1

A Possible Opening

Even as the tariff escalation deepens uncertainty, signs emerged on Thursday that the two sides may find a path back to negotiations. Canadian Trade Minister Dominic LeBlanc said the United States had withdrawn its objections to Canada's French-language content rules, which had been a sticking point in earlier talks. U.S. Trade Representative Jamieson Greer said Wednesday that Washington had shown flexibility on the issue, calling it "far from a deal breaker".investing

However, LeBlanc said Canada was seeking further clarification on other U.S. positions before determining whether substantive negotiations could resume.

Economic Fallout

The dispute is already reverberating through both economies. An analysis cited by Canadian media suggests roughly 87,000 Canadian jobs could be at risk from the new U.S. tariffs. Scotiabank Bank of Nova Scotia ↘ 0.55% CEO Scott Thomson and BMO Bank of Montreal ↘ 0.78% CEO Darryl White both described the impact as "manageable" on post-earnings calls Tuesday, pointing to underlying labour market strength.hcamag

Industry Minister Mélanie Joly said the government had strategically selected certain products to increase pressure on U.S. states ahead of the November midterm elections. Canadian consumers, meanwhile, have intensified boycotts of American products, with retailers increasingly promoting "Buy Canadian" messaging.equitypandit+1

The U.S. dairy industry is watching the dispute closely. Canada is the second-largest export market for U.S. dairy, and several American dairy products are included in Ottawa's retaliatory tariff list. U.S. goods already in transit on September 8 will be exempt from the new duties.rfdtv+1