Canada Announces 'Dollar-for-Dollar' Retaliatory Tariffs on U.S. as High as 50%

Canada has announced counter-tariffs as high as 50% on a range of US goods in retaliation to the latest wave of levies on Canadian imports imposed by President Donald Trump last weekend.

The Canadian tariffs will apply to nearly USD 20 billion worth of American products, across 700 products imported from south of ​the border. 

The counter-tariffs on U.S. goods take effect on September 8.

Canada levied the 50% tariffs on steel, aluminum, furniture and clothing, set the 25% tariffs on cheese, appliances and some seafood, and placed the 15% tariffs on electronics and tools.

The Canadian tariffs will also cover some prepared foods, perfumes and toiletries, plastics, lumber, wood pulp and paper products, ​carpets and clothing.

The list of targeted products is designed to match Canadian goods hit by the US. 

It is the latest escalation after US-Canada trade talks collapsed late last week, with each side accusing the other of making last-minute demands that were unreasonable.

Canada's Minister of Finance François-Philippe Champagne said that Canada's retaliation is in response to 50% tariffs imposed by the Trump administration on a range of Canadian goods after trade talks fell apart on Friday.

"Those tariffs will have real consequences for Canadian workers, businesses and communities across our nation," he said.

Champagne characterised Canada's retaliation as "proportionate" and "strategic".

He added that Canada will also offer businesses and workers impacted by US tariffs an additional CAD 7.5bn for support programmes designed to minimise job losses and keep companies afloat. 

Supply chains which have been developed over decades are set to see increased trading costs due the latest tariff announcements made from both the US and Canada, ultimately hitting businesses of all sizes and consumers through potentially higher prices.

Polls suggest the majority of Canadians support their government in holding firm against the US.

But some questions remain on exactly why trade talks fell apart, with the opposition asking that the full text of the draft deal with the US be released.

Businesses have also expressed concerns about the impact of a prolonged trade war with Canada's largest trading partner.

Source: Reuters | BBC