US-Canada trade war intensifies: Ottawa introduces new tariffs

Canada is imposing new retaliatory tariffs on US goods totalling C$27.6 billion following a tariff hike by the United States. Starting September 8, rates will be 15%, 25%, and 50% and will affect, in particular, steel, dairy products, household appliances, agricultural equipment, and electronics.

The Canadian Ministry of Finance announced this on August 25. Ottawa stated it would respond to the new US restrictions on a 'dollar-for-dollar, rate-for-rate' basis.

The decision came in response to the US imposing 50% tariffs on Canadian goods worth C$27.6 billion starting August 22.

Canadian authorities explained that in recent months they had been engaged in intensive negotiations with Washington on a new trade agreement. However, Ottawa considered the terms proposed by the American side unfavourable and suspended the negotiations.

Which US goods will be subject to tariffs

The new Canadian tariffs will come into force at 00:01 on September 8. Depending on the product category, the rate will be 15%, 25%, or 50% and will match the rate imposed by the US on similar Canadian products.

The restrictions will apply to US goods from sectors most affected by Washington's trade measures. The government listed steel, dairy products, household appliances, agricultural equipment, pulp and paper products, and electronics.

In particular, a 50% tariff will be imposed on some steel and aluminium products that were previously subject to a 25% rate, as well as furniture, clothing, and other goods.

A 25% rate is provided, among other things, for household appliances, dairy products, including cheese, fish and seafood, as well as some derivatives of steel and aluminium.

The tariffs will apply only to goods of US origin. Products already in transit to Canada at the time the restrictions take effect will not be subject to the new measures.

Previously imposed Canadian retaliatory tariffs, including those on US automobiles, will also remain in effect.

Businesses and workers to receive C$7.5 billion

At the same time, the Canadian government announced an additional support package for companies and workers affected by the trade conflict with the US, amounting to C$7.5 billion.

Of this amount, C$1.5 billion will be additionally directed to regional assistance programs for small and medium-sized businesses. Another C$500 million is earmarked to support company liquidity through the Business Development Bank of Canada.

The government will allocate C$2 billion through a new diversification fund for enterprises implementing investment projects and seeking to adapt to changing trade conditions.

Another C$3.5 billion is designated for rapid support programs for workers and employers affected by the US tariffs.

The government notes that the new package supplements nearly C$25 billion in support measures that Canada has already launched since the beginning of the current tariff dispute with the US.

Ottawa states that the retaliatory measures should help Canadian manufacturers compete with US goods in the domestic market and offset the impact of the restrictions on the most affected sectors.

Based on materials: Ministry of Finance of Canada, Government of Canada