Canada's retaliatory tariffs take effect
By: Promit Mukjerjee
Reuters
OTTAWA - Canada's retaliatory tariffs on U.S. goods took effect just after midnight on September 8 [2026] as :rime Minister Mark Carney increased economic pressure on his country's biggest trading partner after negotiations collapsed last month, [08/2026] intensifying an 18-month-old trade war.
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The counter-tariffs cover $20 billion of U.S> goods, with duties raging from 15% to 50% across products from steel and furniture to clothing and electronics.
..... The dollar-for-dollar retaliation marks an escalation in the dispute between the neighboring countries, and U.
S. and Canadian officials have traded blame of scuttling a deal that seemed close to fruition two weeks ago. The rising tension cerate uncertainly about the broader United States-Mexico-Canada free trade agreement, which is up for annual reviews after President Donald Trump declined to extend it for another decade.
..... "What we are worried about is an escalator spiral," said Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and a member of Carney's advisory committee on bilateral U.S. economic relations.
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"But at the same time, we totally understand hat the prime minister needs to find areas of leverage," Harvey said.
..... Trump's tariff's implemented in august [2026] hit sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment, covering $20 billion - about 5% - of Canadian exports to the United States.
..... According to Canadian and U.S. government data, Canada has shipped almost 68% of total exports to the United States this year, [2026] out of which roughly 80% moved duty-free due to exemptions under the USMCA pact.
..... The new tariffs, imposed under a Depression-era U.S. law, do not allow Ottawa to exercise USMCA exemptions.
..... Concern about the USMCA's future have fueled uncertainty about investment and growth, as Canada wages a trade war against an economy 13 times its size.
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Polls show Carney has broad support from Canadians, but it could disappear within months as the consequences of the trade war sink in, according to political analysts.
..... Just 20% of Americans approved of Trump's tariffs on Canadian goods, a Reuters/Ipsos poll found.
..... Carney said his government was ready to sign a trade deal that benefits both countries. Trump threatened in August [2026] to raise U.S. tariffs on all cars, trucks and automotive parts from Canada a 50% starting January 1, [2027] and signed an executive order renaming Lake Ontario as Lake America. A government source said there are currently no talks between the two sides among ministers or government officials.
..... "The Canadian government needs to keep channels open to the United States and not go overboard in terms of rhetoric and reacting to the rhetoric from the America side, while waiting for the American decision-making process to come back to economics," Harvey said.