Canada’s retaliatory tariffs on U.S. took effect on Tuesday, putting billions of dollars' worth of goods and the exports of dozens of states at risk in the latest chapter of the trade war between the historic allies. Trade negotiations between the U.S. and Canada broke down in late August, after which President Donald Trump imposed 50 percent tariffs on $20 billion worth of Canadian goods entering the U.S. This is in addition to the 25 percent tariffs currently impacting Canadian car and trucks, and the duties on its metals and lumber.
Prime Minister Mark Carney pledged a "dollar for dollar" response, and his government has now enacted its own duties ranging from 15 percent to 50 percent on an estimated $27.6 billion of American imports. The targeted products cover hundreds of goods across dairy, agricultural equipment and electronics. According to the Canadian Chamber of Commerce, a combined $1.3 trillion in two-way trade and $2 trillion in annual cross-border investments between the U.S. and Canada has fostered a "close economic relationship [that] fuels prosperity and security for both countries." "Just like Canadian provinces, each U.S. state has a unique relationship with Canada," it writes on a website devoted to highlighting the scale of the commercial relationship, which notes that Canada was the top export destination for 26 states in 2025.
Figures cited by the Canadian Chamber of Commerce show that states bordering or close to the border with Canada do an outsized amount of trade with the country. Illinois—whose top export to Canada last year was energy resources and raw materials—saw its combined exports and imports to the country reach $75.9 billion in 2025. Texas came in second despite its distance, thanks to the pair’s deeply integrated energy sectors and manufacturing supply chains.
Vehicles were Texas’s top export to Canada last year, accounting for $14.5 billion of the overall $69 billion in goods traded in 2025. In terms of the commonly traded goods, "energy resources and raw materials" were the top export for 15 states, followed by the "machinery and electrical" and "chemicals" categories, respectively. Lawmakers from both parties have voiced concern about the opening of a new chapter in the trade war with Canada.
Republican Susan Collins—locked in a tight contest for reelection to her Maine Senate seat—called Trump’s latest tariffs a "mistake." However, an analysis by Newsweek indicated that the economic effects would be felt more severely by Canadian consumers in the event of a tit-for-tat trade war. "The bigger economy of the U.S. allows for production of more items at scale, which makes the U.S. relatively more self-sufficient," Andrey Pavlov, a professor of finance at Simon Fraser University in British Columbia, told Newsweek in late August. However, some said that the ability to weather this period could lie in the political vulnerabilities of the respective leaders, rather than the countries’ economic strengths outright.
Polling from the Angus Reid Institute found that 76 percent of Canadians believe Canada "did the right thing by ending trade negotiations" with the U.S. in August, with 62 percent backing Carney’s subsequent counter-tariffs. "Trump commands no such backing at home," Karl Schamotta, chief market strategist at the financial services firm Corpay, wrote in response. "And the Canadian prime minister appears to be betting that November's midterms will blunt his tariff drive, opening the way to a mutually beneficial deal." Many of Carney’s duties will have a notable impact on states that are considered in play in this year’s midterms—with Wisconsin cheese exports and seafood from Maine both falling within the list of targeted products.
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