Canada Announces Dollar-for-Dollar Retaliatory Tariffs Against US

Canada has announced it is countering Washingtons’ tariffs by imposing dollar-for-dollar counter-tariffs on more than 700 American goods amounting to CA$27.6 billion (US$19.9 billion).

The new tariffs announced by Canadian Finance Minister François-Philippe Champagne during an Aug. 25 press conference will come into force on Sept. 8, increasing costs for imported American items ranging from seafood to furniture.

Champagne also promised CA$7.5 billion in federal support for businesses affected by the tariffs.

“We will support our workers, our businesses, and our industry with whatever it takes for as long as it takes,” he said. 

The announcement comes after trade talks between Ottawa and Washington collapsed on Aug. 21, with Washington imposing 50 percent tariffs on CA$27.6 billion (US$20 billion) Canadian exports to the United States beginning on Aug. 22. The U.S. tariffs, affecting approximately 5 percent of Canadian exports to the United States, apply to a range of products including alcohol, dairy, honey, and hockey sticks.

Champagne said counter-tariffs will be introduced on a sliding scale of 15, 25, and 50 percent, with the highest levies applied to specific dairy products, cosmetics, and select lumber products.

American teel and aluminum products, which were formerly subject to a retaliatory tariff of 25 percent, will now rise to 50 percent as well.

The government has published an extensive list of items that will be affected by counter-tariffs.

Champagne said the “vast majority” of the products affected by the retaliatory could be substituted with a Canadian product.

‘Political Pressure’

Canadian Industry Minister Mélanie Joly, meanwhile, called on Canadians to purchase products made in Canada as the trade conflict intensifies.

“When you choose a Canadian product, you’re not only putting pressure on the U.S. right now, you’re protecting jobs,” Joly said during the press conference. “That’s what you can do, and that’s how we can launch this movement of resistance to what is happening.”

The minister said buying Canadian goods should be easy because the government has asked retailers to make sure customers can clearly identify which products are made domestically.

Joly said Canada is also targeting products “that will target states in the U.S.”

“We’re being wise and strategic to put political pressure” on the United States, she said.

Help Package

Ottawa is rolling out a CA$7.5 billion relief package for workers and businesses affected by the trade war, with a specific focus on small and medium-sized enterprises, Joly said. 

The funding will include $1.5 billion via the Regional Tariff Response Initiative, disbursed through regional development agencies for non-repayable cash and liquidity grants and $500 million will be directed through the Business Development Bank of Canada (BDC) for immediate cash-flow and working capital loans.

“Small businesses through the regional development agencies will have access to $3 million of non-repayable loans, so basically grants for $3 million and up to $2 million of interest-free loans,” Jolie said.

Another $2 billion is earmarked for the new Canada Strong Diversification Fund that accelerates “shovel-ready” capital maintenance projects so factories can retool and find new global markets.

The government also launched a $3.5 billion in rapid response funding and Employment Insurance (EI) extensions to help workers access income support “when they need it,” she added.

This is a developing story, updates will follow.