Ottawa announces $5.4bn support package as Trump threatens further duties on Canadian cars….
Canada has announced retaliatory tariffs of between 15 and 50 per cent on a range of goods imported from the United States, escalating the latest trade dispute between the two traditionally close allies.
The counter-tariffs, announced Tuesday, will take effect on September 8, following the implementation of US President Donald Trump’s 50 per cent tariffs on Canadian imports.
Canadian officials said the new measures were designed to match the level of US duties and would affect products across sectors including steel, dairy, electronics and consumer goods.
The affected items include fresh and frozen fish, dishwashers, washing machines and industrial products such as materials used in railway construction.
Ottawa also unveiled a $5.4 billion, or CA$7.5 billion, support package for businesses and workers expected to be affected by the trade measures.
Finance Minister Francois-Philippe Champagne described the situation as an unprecedented challenge for Canada, saying the country would respond with measures that were proportionate, targeted and strategic.
Industry Minister Melanie Joly also urged Canadians to support domestic businesses and said the government would strengthen ties with new allies and trading partners.
Under the planned measures, US steel and aluminium products already subject to a 25 per cent tariff will face duties of 50 per cent.
Other products, including household appliances, cheese and selected steel and aluminium derivatives, will attract tariffs of 25 per cent, while a smaller group of products, including electrical equipment and tools, will face a 15 per cent duty.
The affected products account for about 7.3 per cent of Canada’s imports from the United States based on 2024 trade figures.
The latest measures have raised concerns about a further round of tit-for-tat tariff increases between the two countries.
Trump on Monday threatened to double tariffs on Canadian automobiles from the current 25 per cent to 50 per cent from next year, with the increase applying to the non-US content of vehicles.
Ontario Premier Doug Ford strongly criticised the threat and warned that Canada could impose a surcharge on electricity exports to the United States.
Trump responded by threatening “far worse” consequences and again referred to Canadian Prime Minister Mark Carney as a “governor”, reviving his controversial call for Canada to become the 51st US state.
Trump also said Tuesday that he was considering renaming Lake Ontario as “Lake America”, following his earlier decision to rename the Gulf of Mexico as the Gulf of America.
The latest US tariffs do not exempt goods covered by the United States-Mexico-Canada Agreement, USMCA. Oxford Economics estimates that the measures will raise the effective US tariff rate on Canadian exports from 5.1 per cent to 6.9 per cent.
The economic research firm said plastics, electrical machinery, and wood and paper products would contribute significantly to the increase, with manufacturers in Quebec, New Brunswick and Ontario expected to be among the hardest hit.
The escalation follows the collapse of trade negotiations between Ottawa and Washington, with Canadian authorities saying US negotiators made additional demands at the last stage of talks.
Carney said the US side had sought restrictions on Canada’s trade agreements with other countries and had also made what he described as unacceptable threats involving the French language and Quebec culture.
Trump rejected the allegation, saying he would never interfere with Canadians speaking French and accusing Carney of making the claim for political gain.
The United States remains Canada’s largest trading partner, with Canadian exports to the US accounting for about 70 per cent of the country’s total exports.
Canada is also the second-largest US trading partner in goods this year, behind Mexico.
The latest tariff dispute follows US accusations that Canada had treated American alcohol, automobiles and dairy products unfairly. Trump had delayed implementation of some of the measures to allow negotiations, but the talks ultimately failed to produce an agreement.
