Canada's retaliatory tariffs on $27.6 billion of U.S. goods took effect Tuesday, the latest escalation in a trade dispute that has already doubled duties on steel and aluminum to 50 percent and left small businesses bracing for impact.
The tariff schedule
The new duties range from 15 percent to 50 percent across hundreds of products including dairy, agricultural equipment, paper, household appliances and electronics. Furniture, motorbikes, clothing and some beauty products face the highest rate. Steel, aluminum and iron products saw their existing counter-tariffs doubled to 50 percent, while a 25 percent levy on the politically sensitive autos sector remains in place. Ottawa describes the package as a "dollar for dollar" response to U.S. Section 338 tariffs on Canadian goods.
Trade flows in context
The United States exported $333.6 billion worth of goods to Canada last year and imported $381.9 billion, with energy, vehicles, heavy machinery, aircraft, pharmaceuticals and food flowing both ways. Economists note the targeted goods represent a relatively small share of total trade, but small- to medium-sized businesses and producers in the most-exposed sectors face a severe blow.
Political temperature
Trade talks collapsed at the end of August with each side blaming the other for the failure to reach compromise. On Monday, U.S. President Donald Trump called for a boycott of Bombardier on Truth Social, writing "NO MORE SELLING BOMBARDIER IN THE UNITED STATES!" The Canadian government last month announced a $7.5 billion support package for affected businesses and workers, extending the $25 billion deployed after the U.S. global tariff offensive began in April 2025.
What to watch
The effective date for the new tariffs is immediate. The next pressure point will be whether the support measures reach small producers fast enough to offset margin compression, and whether the autos tariff, still at 25 percent, becomes the next flashpoint if Washington escalates further.