Canada has imposed new retaliatory tariffs on a broad range of US goods after trade negotiations with Washington collapsed, further straining relations between the two long-standing allies.
The new duties, which took effect on Tuesday, range from 15% to 50% and cover about $27.6 billion worth of US products, including dairy, agricultural equipment, paper, household appliances and electronics.
Canada has also doubled its tariffs on US steel, aluminium and iron products to 50%, while furniture and clothing face the highest tariff rate.
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Ottawa described the measures as a “dollar for dollar” response to US tariffs imposed on Canadian goods under Section 338. Canada’s Department of Finance said the measures were intended to protect Canadian workers, producers and manufacturers and help them compete with US products in the domestic market.
The latest tariffs are in addition to existing Canadian counter-tariffs, including a 25% duty on US automotive products.
Trade negotiations between the two countries broke down at the end of August, with officials from both sides blaming each other for the failure to reach an agreement and publicly disagreeing over the issues that prevented a deal.
The dispute escalated further on Monday when US President Donald Trump called for a boycott of Canadian aircraft manufacturer Bombardier, declaring on Truth Social: “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”
The intensifying trade tensions come as the US and Canada remain deeply interconnected economically. The US exported $333.6 billion worth of goods to Canada and imported $381.9 billion from its northern neighbour.
The two countries share extensive trade across sectors including energy, vehicles, heavy machinery, aircraft, pharmaceuticals, gems and jewellery, furniture, clothing, food and beverages.
Economists have warned that although the newly targeted goods account for a relatively small share of overall bilateral trade, the tariffs could deliver a significant blow to small and medium-sized businesses and companies operating in the most affected sectors.
In response to the economic impact of the trade dispute, Ottawa announced a $7.5 billion support package for businesses and workers last month.
The package builds on an existing $25 billion in support introduced in response to the US global tariff offensive that began in April 2025.