Canada’s retaliatory tariffs on a range of US goods came into effect on Tuesday, with no sign of a trade deal on the horizon. The counter-tariffs will apply to nearly C$28bn ($20bn; £15bn) worth of American products, from steel to furniture to cotton T-shirts, and will be as high as 50%.
Fresh fish and lobster were also on the list, but Canada later omitted them after pushback from its seafood industry – a sign of the tricky balance it has to strike as it retaliates against its largest trading partner.
Prior to this time, BBC reported that both US and Canadian officials have said they would like to strike a deal, but no movement has been made to resume talks after they collapsed in late August. Speaking to their reporters last week, Prime Minister Mark Carney said that Canada is still in search of a deal with the US that is “durable” and in the best interests of both countries.
“We’re ready to sit down and and strike that deal when the Americans are ready,” Carney said.
US trade representative Jamieson Greer, meanwhile, said the previous Thursday that the ball is in Canada’s court. “We offered them the best deal, they looked at it square in the face and turned around,” Greer said in an interview with Fox News, adding that there has been sparse communication with the Canadians since talks collapsed.
President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moves its manufacturing south. The company is one of the largest in the country, contributing over C$7bn to Canada’s annual GDP in 2024, according to a report commissioned by Bombardier by public accounting firm PwC.
The US currently has in place a 25% tax on Canadian cars and trucks, as well as taxes on Canadian steel, aluminium and lumber. In late August, President Donald Trump imposed new 50% tariffs on other goods like dairy, alcohol, hockey sticks and perfume. Canada’s counter-tariffs, which were described by Carney as “dollar-for-dollar”, will from Tuesday be applied to hundreds of items coming in from the US. These are in addition to existing retaliatory taxes Canada had placed on finished American cars and trucks that are non-compliant with a free trade agreement between Canada, the US and Mexico, known as the USMCA in the US and CUSMA in Canada.
BBC wrote that lobster industry in both Canada and the US are heavily dependent on the other, with American-caught lobster often sent to north to be processed before it is shipped back to the US and sold. Ahead of the latest tariffs, Canada’s economy had shown signs of resilience. Its GDP grew 3.3% in the second quarter and it gained 181,000 jobs from April to July. However, about 41,000 jobs were lost in August, a period that coincided with the new US tariffs on Canada and the collapse in trade talks.
Prime Minister Carney has vowed to diversify Canada’s trade away from the US.
Author
Paul Olayioye
