Canada's C$27.6 billion retaliatory tariffs on U.S. goods take effect

Canada’s retaliatory tariffs on C$27.6 billion, or about US$19.9 billion, of U.S. goods took effect just after midnight Tuesday, the latest escalation in a trade dispute between two of North America’s closest economic partners after Washington imposed new tariffs on Canadian products.

Canada’s Department of Finance said selected U.S. goods now face surtaxes of 15%, 25% and 50%, effective 12:01 a.m. ET on Sept. 8. The measures target a defined list of imports rather than all goods from the United States, including steel and aluminum, dairy products, appliances, agricultural equipment, pulp and paper, plastics, and electronics.

Finance Canada said the countermeasures respond to U.S. tariffs on Canadian goods, including 50% duties imposed under Section 338 of the U.S. Tariff Act of 1930, a rarely used tariff authority in modern times, along with applicable Section 232 tariffs. The White House announced the U.S. action on July 20, and after a brief delay it took effect Aug. 22, covering Canadian goods including alcoholic beverages, dairy and motor-vehicle-related products. In a July 20 statement, the Office of the U.S. Trade Representative said President Donald Trump had used Section 338 authority to impose additional 50% tariffs on Canada “to offset Canada’s discriminatory treatment of U.S. exports.”

Ottawa announced its response on Aug. 25 and said it would match the U.S. action “dollar for dollar, rate for rate.” Finance Minister François-Philippe Champagne said in the department’s release: “When the United States asked too much and offered too little, we chose to stand up for Canadians. Our dollar-for-dollar, rate for rate counter-tariffs as well as a multi-billion dollar support package will protect workers, farmers, families, and businesses as we build a stronger, more resilient, and more diversified Canadian economy.”

At the same time, the Canadian government unveiled a C$7.5 billion support package for workers and businesses affected by the dispute. Finance Canada said the package includes new and expanded programs such as a regional tariff response initiative, a Business Development Bank of Canada liquidity stream, a diversification fund and worker support measures, aimed at helping companies manage cash flow and adapt to disrupted trade.

The Canadian surtaxes apply only to goods that qualify as U.S.-origin under CUSMA marking rules, according to Finance Canada, and goods already in transit to Canada on Sept. 8 are exempt. The latest move underscores that Canada’s response is targeted at specific U.S. sectors rather than a blanket tariff on all American imports, even as the dispute deepens.