Canada imposes retaliatory tariffs up to 50% on US goods worth $27.6 billion

Canada has imposed retaliatory tariffs of up to 50% on C$27.6 billion ($19.9 billion) of U.S. goods starting September 8, 2026, matching Donald Trump's levies dollar-for-dollar. The counter-tariffs target over 700 products, including steel, aluminum, dairy, and consumer goods. To mitigate domestic damage, Finance Minister François-Philippe Champagne announced a C$7.5 billion support package for workers and businesses. The escalation follows the collapse of trade talks, which broke down over last-minute demands, including U.S. objections to Quebec's French-language streaming and labeling laws.

Canadian retaliatory tariffs

• ▪The U.S. states most affected by Canada's retaliatory tariffs by import value are Ohio, Illinois, Pennsylvania, California, and Michigan.
• ▪Canada will raise tariffs on U.S. steel and aluminum products to 50%, doubling the previous rate of 25%.
• ▪Canada's retaliatory tariffs will target more than 700 American products, including steel, aluminum, dairy, seafood, appliances, agricultural equipment, pulp, paper, clothing, and smartphones.
• ▪Canada announced on August 25, 2026, that it will impose retaliatory tariffs of 15%, 25%, and 50% on C$27.6 billion ($19.9 billion) worth of American imports starting September 8, 2026.

US-Canada trade negotiations breakdown

• ▪Trade negotiations between the United States and Canada collapsed on August 21, 2026, after both sides accused each other of introducing unacceptable last-minute demands.
• ▪U.S. President Donald Trump stated on August 25, 2026, that his administration is considering renaming Lake Ontario to 'Lake America' because the U.S. does not expect to do much business with Ontario.
• ▪Canadian Prime Minister Mark Carney stated that U.S. negotiators raised French-language labeling rules and the discoverability of French-language content on streaming platforms as trade irritants.
• ▪U.S. President Donald Trump denied attempting to weaken Canadian French-language rules, calling the accusation a lie fabricated by Prime Minister Mark Carney to gain political support in Quebec.

Canadian worker support package

• ▪Canada announced a C$7.5 billion ($5.4 billion) financial support package on August 25, 2026, to assist Canadian workers and businesses affected by the escalating trade war with the United States.
• ▪The Canadian government's support package allocates C$3.5 billion for worker supports, including extending temporary enhancements to Employment Insurance and funding a new Workforce Retention and Retraining Program.

Canadian business support package

• ▪The Canadian government added a C$2 billion stream called the Canada Strong Diversification Fund to its Strategic Response Fund to support shovel-ready business projects.
• ▪Dan Kelly, president of the Canadian Federation of Independent Business, criticized the support package as a complicated patchwork of programs that would be difficult for small businesses to navigate.
• ▪The Canadian government's support package allocates C$1.5 billion to regional development agencies for liquidity support and C$500 million for a Business Development Bank of Canada loan stream.

US-Canada trade war timeline

• ▪U.S. President Donald Trump signed proclamations on July 20, 2026, invoking Section 338 of the Tariff Act of 1930 to impose 50% tariffs on $20 billion of Canadian goods, which took effect on August 22, 2026.
• ▪U.S. President Donald Trump announced on August 24, 2026, that the United States will raise tariffs on all Canadian cars, trucks, automotive parts, and steel to 50% starting January 1, 2027.
• ▪U.S. President Donald Trump initiated the current trade dispute on February 1, 2025, by announcing tariffs on Canadian goods, prompting a C$155 billion retaliatory tariff package from Canada.