Canada Activates Sweeping Counter-Tariffs on US Goods

Canada’s retaliatory tariffs took effect Tuesday, covering nearly C$28bn ($20bn) of US products and reaching rates as high as 50%.[5] The measures target goods ranging from steel and furniture to clothing, although Canada removed fresh fish, lobster and dozens of other seafood products following industry pushback.[5] Why it matters: Economists warn that the counter-tariffs will raise Canadian consumer prices for everyday goods, while businesses are preparing for a prolonged dispute with the country’s largest trading partner.[5] Key insights: The United States already applies a 25% tariff to Canadian cars and trucks, taxes Canadian steel, aluminium and lumber, and introduced 50% tariffs on additional goods in late August.[5] | Canada’s latest measures are in addition to retaliatory taxes on finished US vehicles that do not comply with the Canada-US-Mexico free-trade agreement.[5] | Canada’s GDP grew 3.3% in the second quarter and employment increased by 181,000 from April through July, but the economy lost about 41,000 jobs in August as US tariffs took effect and trade talks collapsed.[5] | The share of Canadian exports going to the United States fell to 66% in July from an average of 75% before the trade war.[5] Cheatsheet facts: What changed: Canada imposed tariffs of up to 50% on nearly C$28bn of US goods, while exempting seafood products after domestic opposition.[5] | Why now: The measures are a dollar-for-dollar response to US tariffs, with no trade agreement on the horizon.[5] | Watch next: Monitor consumer prices, employment and the US share of Canadian exports for evidence of the dispute’s domestic and trade effects.[5]