Ottawa’s retaliatory measures will take effect on September 8 – this deadline was previously indicated by Prime Minister Mark Carney, after the 50% tariffs on Canadian products imposed by US President Donald Trump came into effect on Saturday.
Detailing Ottawa’s retaliatory actions, officials said on Tuesday that Canadian tariffs will match the levels set by the US. This will affect industries such as steel, dairy products, and electronics.
The Canadian government also announced a $5.4 billion USD (7.5 billion CAD, 4.6 billion EUR) aid package for affected companies and workers.
“This is an unprecedented challenge that Canada must overcome. However, Canada will handle this situation,” said Canadian Finance Minister François-Philippe Champagne.
“I believe that this morning Canadians can see that we are united. Our response is united,” he added.
Escalation of retaliatory measures?
With trade talks collapsing at the last moment, the large tariffs imposed by the US affected about $20 billion USD worth of Canadian goods – about 5.5% of the country’s exports to the United States.
Under Canada’s planned retaliatory measures, US steel and aluminum products, which previously had a 25% tariff, will soon face a 50% tariff.
The list of goods subject to 25% tariffs includes household appliances, dairy products, as well as certain steel and aluminum products.
A small category of goods, including electrical equipment and tools, will be subject to a 15% tariff.
These goods make up about 7.3% of Canada’s imports from the United States.
However, analysts warn of an escalation in retaliatory actions.
Already on Monday, D. Trump additionally promised to double the tariffs on Canadian cars next year – from the current 25% to 50% for non-US-made parts.
Ontario Premier Doug Ford criticized D. Trump’s threat regarding cars, stating that he can “kiss my ass,” and threatened to impose an additional electricity export tax.
In an earlier stage of the dispute, Ontario imposed a temporary additional 25% tax on electricity exports to three US states.
D. Trump strongly attacked D. Ford, warning of “much worse” consequences. He also called M. Carney a “governor,” again repeating his provocative idea that Canada should become the 51st US state.
On Tuesday, D. Trump stated that he is considering renaming Lake Ontario to “America Lake,” as he did last year with the Gulf of Mexico, which he believes should now be called the “America Gulf.”
According to Oxford Economics, due to the latest D. Trump tariffs – which did not include exemptions for products covered by the US-Mexico-Canada Agreement (USMCA) – the effective US tariff rate on Canadian exports increases from 5.1% to 6.9%.
This increase is mostly driven by tariffs on plastics, electrical equipment, wood, and paper products.
“Manufacturers in Quebec, New Brunswick, and Ontario provinces will be the most affected,” predicts Oxford Economics.
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