Canada's retaliatory tariffs on a range of US goods came into effect on Tuesday, with no sign of a trade deal on the horizon. The counter-tariffs will apply to nearly C$28bn ($20bn; £15bn) worth of American products, from steel to furniture to cotton T-shirts, and will be as high as 50%. Fresh fish and lobster were also on the list, but Canada later omitted them after pushback from its seafood industry - a sign of the tricky balance it has to strike as it retaliates against its largest trading partner.
Both US and Canadian officials have said they would like to strike a deal, but no movement has been made to resume talks after they collapsed in late August. Speaking to reporters last week, Prime Minister Mark Carney said that Canada is still in search of a deal with the US that is "durable" and in the best interests of both countries. "We're ready to sit down and and strike that deal when the Americans are ready," Carney said.
US trade representative Jamieson Greer, meanwhile, said on Thursday that the ball is in Canada's court. "We offered them the best deal, they looked at it square in the face and turned around," Greer said in an interview with Fox News, adding that there has been sparse communication with the Canadians since talks collapsed. In a separate interview with Canadian broadcaster CBC, Greer cautioned against retaliation and suggested the US might hit back by banning the import of some Canadian products.
President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south. The company is one of the largest in the country, contributing over C$7bn to Canada's annual GDP in 2024, according to a report commissioned by Bombarier by public accounting firm PwC. What tariffs will really cost Canadians and Americans Trump took aim at Canada in a series of other Truth Social posts over the weekend, including one that called Canada's exchange rate with the US "unacceptable".
Another post showed a map of North America - including Canada and Mexico - and Greenland all overlaid with the US flag. Canada and the US have the world's largest bilateral trading relationship valued at nearly $900bn in 2025. With new US tariffs and Canadian counter-tariffs are now in effect, businesses on both side are scrambling to deal with what comes next.
The US currently has in place a 25% tax on Canadian cars and trucks, as well as taxes on Canadian steel, aluminium and lumber. In late August, President Donald Trump imposed new 50% tariffs on other goods like dairy, alcohol, hockey sticks and perfume. Canada's counter-tariffs, which were described by Carney as "dollar-for-dollar", will be applied to hundreds of items coming in from the US as of midnight on Tuesday.
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