Canada Announces Retaliatory Tariffs on US Steel, Dairy as Trade War With Washington Escalates

OTTAWA — Canadian Prime Minister Mark Carney announced Saturday that Canada will impose retaliatory tariffs on the United States, matching Washington’s newly imposed 50% levy on $20 billion worth of Canadian goods dollar for dollar, after days of intense trade negotiations between the two longtime allies collapsed late Friday.

Speaking to reporters in Ottawa, Carney said the new Canadian tariffs will target U.S. steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics, along with certain other products previously targeted by U.S. tariffs against Canada. The measures are set to take effect Sept. 8. “Canada will match Washington’s new tariffs dollar for dollar in order to protect Canadian workers, farmers, families, and businesses,” Carney said.

The breakdown in talks came after the Trump administration imposed new 50% tariffs covering roughly $20 billion in Canadian goods, or approximately 5.5% of Canada’s total exports to the United States, affecting sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment. President Donald Trump responded to Carney’s retaliation announcement in a post on Truth Social, writing, “Canada wants the benefits of being a State, without being one!!!” Trump also claimed Canada has charged U.S. farmers “massive amounts” of tariffs for years, adding, “No more!!!”

Carney said the negotiations broke down after the United States proposed conditions his government found unacceptable, despite what he described as positive momentum in earlier talks. “In recent days, the United States proposed new terms that were uneconomic, unfair and undermined the net benefits for Canada, and called into question the reliability of any deal,” Carney said, adding that the U.S. demands included restrictions on Canada’s ability to pursue new trade agreements with other countries. “We cannot accept what they’ve offered, and we will not give what they’ve asked,” he said. Carney further alleged that U.S. negotiators made unacceptable threats concerning the French language and Quebec culture, referring to Canada’s French-speaking eastern province.

Carney said his government would release further details of its retaliatory response in the coming days, and separately indicated Canada would announce support measures next week for industries directly affected by the new U.S. tariffs, support he said could remain in place for years.

The economic consequences of the escalating trade dispute are expected to be significant for Canada, which relies on the United States for nearly 70% of its total exports. Al Jazeera’s David Mercer, reporting from Calgary, described the anticipated fallout. “Costs are going to go up, prices are going to go up, unemployment is going to go up as well,” Mercer said, adding that some small and medium-sized Canadian businesses have been warned they may be forced to declare bankruptcy as a result of the tariffs. At the same time, Mercer noted, Carney has sought to frame the trade war as an opportunity for Canada to diversify its economic relationships. “He’s been around the world, he’s been talking to countries in Asia, in Europe, shoring up new trade relationships, wanting to diversify Canada’s economy and Canada’s trade relationships with other countries around the world just to get away from that dependency that Canada has traditionally had on the United States,” Mercer said.

Public opinion in Canada appears to broadly support Carney’s harder line. A poll conducted by Leger last week found that 56% of Canadians favored a tougher approach toward the United States in trade talks and opposed making further concessions.

Ontario Premier Doug Ford, one of the most vocal Canadian critics of the U.S. tariffs, voiced support for Carney’s decision to retaliate. “I’m glad he didn’t sign that deal because it was a bad deal. It was a bad deal for Ontario. It was a bad deal for the auto sector, the steel sector, and manufacturing sector,” Ford told reporters Saturday.

Reaction among ordinary Canadians reflected a mix of defiance and concern. Stuart Edwards, a resident of Port Colborne, Ontario, said the trade war would “hurt everybody” and called the situation “just sad.” He placed blame squarely on Washington. “We have a bully in Washington, and he’s just hitting us all with the big stick all the time,” Edwards said. “And we’re not going to put up with it; Canada isn’t. We’ll fight back.” Pamela Coulis, from Fort Erie, Ontario, expressed worry about the practical financial impact of rising prices. “I think probably the gas will go up even more, and all products, from food to, I don’t know, wood, everything else,” she said.

Diamond Isinger, a former special adviser to ex-Canadian Prime Minister Justin Trudeau, argued that retaliation, despite its costs, represented Canada’s only viable path forward. “It’s going to cause pain and challenge for Canadians and Americans alike — in terms of the actions that, unfortunately, the US has taken as well as Canada’s retaliation. But ultimately this was the way forward; this was the only realistic next step,” Isinger said. She argued that the Trump administration tends to respond most effectively to firm resistance. “Because the US administration responds best, of all the responses that they could have, to all the actions that a government like Canada could take, to strength,” Isinger said. “So, we could not simply accept 50 percent tariffs going forward. We had to move forward with our own retaliatory package.”

U.S. Trade Representative Jamieson Greer indicated Saturday that no further talks with Canada are currently planned. “We’re moving forward with measures that respond to Canadian retaliation,” Greer told Fox News, adding, “They’ve always had the best deal, and they still would have an even better deal, but they didn’t want that.”

The escalating dispute has also drawn criticism from Democratic lawmakers and governors in U.S. border states, including Minnesota, New York and Washington, who have blamed Trump for triggering economic disruption that will raise costs for American businesses and consumers. New York Gov. Kathy Hochul criticized the administration’s approach in a post on the social platform X. “Needlessly picking fights with our allies and raising prices here at home. That’s Trump’s economic policy in a nutshell,” Hochul wrote.

The Business Roundtable, a group representing roughly 200 chief executives of major U.S. corporations, also warned that the new tariffs risk raising costs for American businesses and families, and urged both governments to resume negotiations. As of Saturday, no new talks between the United States and Canada had been scheduled, leaving both economies bracing for the mutual tariffs set to take effect Sept. 8.