Canada Sets Tariffs of Up to 50% on C$27.6 Billion of U.S. Goods

OTTAWA, CANADA — Canada will impose new counter-tariffs from September 8 while committing C$7.5 billion to businesses and workers exposed to the escalating trade dispute.

Canada will levy tariffs of 15%, 25% and 50% on U.S.-origin products covering C$27.6 billion in annual imports, escalating its response to new American duties after trade negotiations between the two countries broke down.

The countermeasures will take effect at 12:01 a.m. on September 8 and target more than 700 tariff items across sectors including steel, dairy, appliances, agricultural equipment, pulp and paper and electronics, according to Canada’s Department of Finance.

Ottawa also announced C$7.5 billion in new and expanded support for Canadian workers and businesses affected by the dispute. The package adds to nearly C$25 billion in assistance the Canadian government says it has introduced since earlier U.S. tariff measures took effect.

The measures deepen a trade confrontation between two economies whose manufacturing, energy and agricultural supply chains are closely integrated. They follow a U.S. decision to impose additional tariffs of 50% on selected Canadian imports under Section 338 of the Tariff Act of 1930.

Canada says its response will match U.S. tariffs

The Canadian government said its new measures are designed to match the latest U.S. tariffs “dollar for dollar” and “rate for rate.”

Goods subject to the Canadian countermeasures will be assigned rates corresponding to U.S. duties on the equivalent products. Among goods facing 25% Canadian tariffs are appliances, cheese and other dairy products, fish and seafood, and certain derivatives of steel and aluminum.

The complete tariff schedule also covers products in areas ranging from industrial materials to electronics. The measures apply only to goods originating in the United States under the applicable country-of-origin rules. U.S. goods already in transit to Canada when the tariffs take effect will not be subject to the new duties.

Existing Canadian counter-tariffs on other U.S. products, including automobiles, will remain in force. Ottawa also said its tariff-remission framework will continue to consider requests for exceptional relief, potentially limiting damage where Canadian companies cannot readily substitute affected U.S. inputs.

C$7.5 billion package targets companies and workers

The support package combines financing for businesses with assistance aimed at workers and employers.

Ottawa will add C$1.5 billion to its Regional Tariff Response Initiative for small and medium-sized companies and establish a C$500 million liquidity stream through the Business Development Bank of Canada’s Pivot to Grow program. Eligibility for BDC tariff programs will also be broadened by reducing the minimum revenue requirement to C$1 million.

A further C$2 billion will go to the Canada Strong Diversification Fund for tariff-affected businesses with projects ready for investment, while C$3.5 billion will fund what the government calls Rapid Response Supports for Workers and Employers. Together, those measures account for the announced C$7.5 billion package.

The structure of the assistance shows that Ottawa is preparing not only for immediate tariff costs but also for pressure on investment, employment and corporate cash flow if the dispute persists.

Washington cites Section 338 and alleged discrimination

The United States has framed its action differently.

U.S. Trade Representative Jamieson Greer said President Donald Trump invoked Section 338 in response to what Washington describes as discriminatory Canadian treatment of American exports, citing alcohol, dairy and automobiles. Section 338 authorizes the president, under specified circumstances, to impose additional duties of up to 50% in response to discriminatory treatment of U.S. commerce.

Those are the U.S. administration’s stated grounds for the tariffs, not independently established findings about the fairness of Canadian trade policy.

The U.S. action announced in July targeted nearly US$20 billion in Canadian imports and was scheduled to take effect after a 30-day interval. Canada says the resulting U.S. measures cover C$27.6 billion of Canadian goods and became effective August 22.

Ottawa, meanwhile, says it suspended negotiations after Washington proposed terms that Canada considered contrary to its economic and national interests. That characterization is the Canadian government’s account of the failed negotiations.

Independent reporting by Reuters and the Associated Press confirms the August 25 retaliation announcement and the broad scale of the tariff and support measures.

September 8 becomes the next immediate deadline

For businesses, the next concrete milestone is September 8.

Importers will have to determine whether U.S.-origin goods fall within the Canadian tariff schedule and at what rate, while companies dependent on cross-border inputs will have to assess whether alternative suppliers or tariff-remission provisions can reduce their exposure.

The broader economic impact will depend in part on how long the tariffs remain in place, whether businesses pass additional costs to customers, and whether Canada and the United States return to negotiations.

For now, Ottawa has moved from promising retaliation to publishing the products, rates and implementation date of its next round of countermeasures. Unless policy changes before then, the new Canadian tariffs are scheduled to take effect at 12:01 a.m. on September 8.