Canada slaps $20B in retaliatory tariffs on US goods amid trade tensions

Canada’s federal government will impose 25% tariffs on C$29.8 billion (around $20 billion) worth of US goods in response to steel and aluminum tariffs announced today by President Donald Trump’s administration.

The US has applied 25% tariffs on steel and aluminum imports from all countries, including Canada, as part of Trump’s broader effort to reshape global trade.

As Prime Minister Justin Trudeau prepares to transition power to his successor, Mark Carney, tensions in the ongoing economic dispute continue to rise.

Canada’s retaliatory tariffs will take effect at 12:01 p.m. ET on Thursday.

These duties come in addition to the 25% levies Canada imposed on $30 billion in U.S. goods earlier this month.

The latest tariffs will target $12.6 billion in steel and $3 billion in aluminum products, with additional countermeasures on goods such as computers, sports equipment, and cast iron.

US tariffs take effect

The increase in tariffs on imports of steel and aluminium by President Trump took effect Wednesday.

Trump’s threat of tariffs aligns with, what seems to be, his wider strategy of rewriting global trade rules to benefit US corporations at the expense of others, escalating the trade war.

Trump outlined the decision through his Truth Social platform and explained the tariffs were needed to protect American businesses.

Earlier this week, Trump also called on Canada to eliminate what he described as an “Anti-American Farmer Tariff” of 250% to 390% on various US dairy products, labelling it “outrageous.”

Transition of power in Canada

The US-Canada trade war intensifies as Prime Minister Justin Trudeau prepares to hand over power to his successor, Mark Carney, following his victory in the ruling Liberal Party’s leadership race on Sunday.

Carney, who is set to be sworn in later this week, stated on Monday that he could not engage in direct talks with President Donald Trump until he officially assumed office.

Meanwhile, Trump reignited tensions on social media, stating that he wanted Canada “to become our cherished Fifty-First State.”

Speaking at a steel plant in Ontario, Carney reaffirmed his willingness to negotiate with Trump but emphasized that any discussions must respect Canada’s sovereignty.

“I’m ready to sit down with President Trump at the appropriate time, in a framework that respects Canadian sovereignty and fosters a more comprehensive approach to trade,” he said.

Carney also highlighted the significance of renewing economic ties between the two nations.

“We are all going to be better off when the greatest economic and security partnership in the world is renewed and relaunched,” he said. “We have a new government, but the same commitment.”

The broader economic impact

Global financial markets have experienced heightened volatility amid President Donald Trump’s return to the White House, with economists warning of a potential U.S. recession.

In an interview on Fox News’ “Sunday Morning Futures,” Trump avoided directly addressing the risk of a downturn, stating, “I hate to predict things like that. There is a period of transition because what we’re doing is very big.”

Despite growing concerns, Commerce Secretary Howard Lutnick dismissed fears of a recession.

Speaking on NBC’s “Meet the Press,” he assured Americans that a downturn is unlikely, emphasizing Trump’s reciprocal tariff strategy as a measure to level global trade dynamics.

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