Canada Responds to U.S. Tariffs On Tuesday, Canadian Prime Minister Mark Carney announced a 50 % tariff on $20 billion of U.S. goods, a direct response to President Donald Trump’s Section 338 measures that target Canadian products. The new Canadian tariffs cover a range of items, from steel and motorcycles to cosmetics and cheese, and will take effect at 12:01 a.m. New York time.
Carney said the decision was not his first choice, but it was necessary to protect Canadian workers, companies and communities. "We can’t let American goods into Canada tariff‑free while they charge our companies to export," he told viewers in a video posted to social media.
Impact on the Canadian Economy Bloomberg Economics estimates that the U.S. tariffs could virtually halt imports of the affected goods, putting roughly 0.8 % of Canada’s gross domestic product at risk in the short term. Economists Maeva Cousin and Rana Sajedi project a smaller long‑term hit of about 0.2 % relative to the 2024 baseline.
The tariffs are expected to hit Ontario, Quebec and British Columbia hardest, as these provinces have already retaliated by pulling American alcohol from government‑run liquor stores. Sapporo Breweries Ltd. has already announced a shift of some production to the U.S. to avoid the 50 % U.S. beer tariff.
Future Outlook Carney reiterated that Canada will fast‑track major infrastructure projects and expand free‑trade relationships. "Over the next six months, Canada will double its tariff‑free access to 3 billion consumers," he said.
The trade standoff continues to simmer between two long‑time allies that exchanged nearly $900 billion of trade last year. While Carney warns against further escalation, the current trajectory suggests that both sides may continue to impose retaliatory measures unless a new agreement is reached.