Canada Announces $20 Billion Retaliatory Tariffs On US As Trade War Intensifies

Canada on Wednesday announced Canadian $29.8 billion ($20.7 billion) in retaliatory tariffs on the United States. Canadian Finance Minister Dominic LeBlanc said, “Following a dollar for dollar approach, as of 12:01 AM EDT tomorrow, there will be a 25% reciprocal tariff on an additional C$29.8 billion worth of goods imported from the US.”

LeBlanc said at a press conference that Trump’s increased tariffs on steel and aluminum imports took effect on Wednesday as prior exemptions, duty-free quotas, and product exclusions expired. “This includes steel products worth $12.6bn and aluminum products worth $3bn, as well as additional imported US goods worth $14.2bn for a total of $29.8bn. The list of additional products affected by counter-tariffs includes computers, sports equipment and cast iron products, as examples.

Tariff deadline was marked by a fracas on Tuesday after Trump threatened to double tariffs on Canadian steel and aluminum in response to Canada’s threats to increase electricity prices for US customers.The US president backed down from those plans after Ontario Premier Doug Ford agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan, and New York.

Canada is the largest foreign supplier of steel and aluminum to the United States. Meanwhile, the European Commission, the executive arm of the European Union responsible for coordinating trade matters, responded swiftly, announcing plans to impose counter-tariffs on up to 26 billion euros ($28 billion) worth of US goods—often more symbolic than economically significant—starting next month.

This escalation in the US-Canada trade war occurred as Prime Minister Justin Trudeau prepared to hand over power this week to his successor, Mark Carney, who won the leadership race of the ruling Liberals on Sunday.