TLDR
- Canada launched tariffs up to 50% on nearly C$28bn worth of US goods including cheese, honey, aluminum foil, steel, and furniture
- The move is a dollar-for-dollar retaliation against Trump’s August 50% tariffs on Canadian dairy, alcohol, and hockey sticks
- Trade talks collapsed in late August with no new talks scheduled
- Trump threatened to block Bombardier from the US market unless it moves manufacturing south
- Canada lost around 41,000 jobs in August as the trade war intensified
Canada’s retaliatory tariffs on US goods took effect Tuesday at midnight, covering nearly C$28bn ($20bn) worth of American products. Items hit include cheese at 25%, honey at 50%, aluminum foil at 50%, steel, furniture, and cotton clothing.
BREAKING: Canada has officially imposed new tariffs of up to 50% on hundreds of products from the US in response to President Trump's tariffs.
New tariffs include US steel, at 50%, and a range of consumer goods, motorcycles, cosmetics, cheese, and more.
— The Kobeissi Letter (@KobeissiLetter) September 8, 2026
The tariffs are Canada’s response to Trump’s 50% levies imposed in August on Canadian dairy, alcohol, perfume, and hockey sticks. Those August tariffs were themselves a response to earlier Canadian retaliatory measures on US cars and trucks.
The cycle of retaliation has been building for months. Trade talks between the two countries collapsed in late August, and neither side has made moves to restart them.
Canadian Prime Minister Mark Carney said Canada is ready to reach a deal that is “durable” and fair for both countries. But US Trade Representative Jamieson Greer said the ball is now in Canada’s court after the US offered what he described as the best available deal.
Canada and the US share the world’s largest bilateral trading relationship, valued at nearly $900bn in 2025. That relationship is now under serious strain.
Bombardier Threat and Economic Fallout
Trump escalated tensions further on Monday, threatening on Truth Social to ban Canadian plane maker Bombardier from the US market unless it moves its manufacturing to the United States.
Bombardier contributes over C$7bn to Canada’s GDP each year, making it one of the country’s largest companies. A US ban could have wide consequences for the Canadian economy.
Canada made one adjustment before the tariffs kicked in. Seafood items including fresh fish and lobster were removed from the list after pushback from Canada’s fishing industry. Lobster in particular is deeply tied between the two countries, with American-caught lobster often processed in Canada before being sold back in the US.
Economists are warning the new tariffs will push up prices for Canadians on everyday goods like food, clothing, and furniture.
The Canadian Chamber of Commerce has urged the government to be careful about escalation. Its president Candace Laing said businesses understand retaliation but do not want to see it go on without end.
Canada’s economy had been holding up before the latest round. GDP grew 3.3% in the second quarter and 181,000 jobs were added between April and July.
But August told a different story. Around 41,000 jobs were lost that month, a period that overlapped with the new US tariffs and the breakdown in trade talks.
Canada has also been shifting its trade away from the US. In July, the share of Canadian exports headed to the US dropped to 66%, down from an average of 75% before the trade war began.
Trump’s weekend Truth Social posts included a map showing Canada, Mexico, and Greenland all overlaid with the US flag, and a separate post calling Canada’s exchange rate with the US “unacceptable.”
Carney previously criticized the US for “doing memes” and “throwing shade,” and has made diversifying Canada’s trade relationships a key policy goal.
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