Canada's Retaliatory Tariffs on U.S. Goods Take Effect

Canada's retaliatory tariffs on American goods formally took effect at 12:01 a.m. Tuesday, covering nearly C$28 billion (about $20 billion) worth of products ranging from steel to furniture to cotton T-shirts, according to the BBC. CNBC valued the full retaliatory package at $27.6 billion and reported that duties on U.S. steel and aluminum products doubled to 50%.

The move came hours after President Donald Trump threatened Monday to halt all U.S. business with Bombardier, the Canada-based airplane maker, unless the company moved its manufacturing to the United States. Bombardier is one of Canada's largest companies, contributing more than C$7 billion to the country's annual GDP in 2024, according to a report the company commissioned from accounting firm PwC.

Ottawa adjusted its list before the duties took effect, dropping fresh fish and lobster after pushback from Canada's seafood industry -- a sign of the balance the government must strike as it retaliates against its largest trading partner. Trump also targeted Canada in a series of Truth Social posts over the weekend, calling the countries' exchange rate "unacceptable" and sharing a map showing Canada, Mexico and Greenland overlaid with the U.S. flag. NPR reported the new duties are likely to affect exporters and consumers on both sides of the border.

The context

The tariffs land amid a broader rupture between Washington and Ottawa. Trade talks between the two countries collapsed in late August, and no movement has been made to resume them, according to the BBC. Officials on both sides have said they want an agreement. Prime Minister Mark Carney told reporters last week that Canada is seeking a deal that is durable and in both countries' interests, saying Canada is ready to negotiate when the Americans are. U.S. trade representative Jamieson Greer, speaking to Fox News on Thursday, said the U.S. had offered Canada its best deal and Canada turned it down, adding that communication has been sparse since talks broke off. In a separate CBC interview, Greer cautioned against retaliation and suggested the U.S. could respond by banning imports of some Canadian products. Canada and the U.S. maintain the world's largest bilateral trading relationship, valued at nearly $900 billion in 2025.

Why it matters

The duties strike directly at the largest bilateral trading relationship in the world, and the effects reach exporters, manufacturers and consumers in both countries. With U.S. tariffs and Canadian counter-tariffs now both in effect, businesses on each side of the border are scrambling to adjust, the BBC reported. The escalation now extends into aerospace: Trump's threat against Bombardier puts pressure on a company that accounts for billions in Canadian economic output. Canadian officials are bracing for a prolonged trade war rather than a quick resolution.

What’s next

No trade deal is on the horizon, and talks have not resumed since collapsing in late August. Both governments say they want an agreement, but each is waiting on the other -- Carney says Canada is ready to negotiate, while Greer says the ball is in Canada's court. Watch for whether the U.S. follows through on Greer's suggestion of banning some Canadian imports, and whether Trump acts on his Bombardier threat.