The move will see tariffs of up to 50% applied to US goods entering Canada, mirroring the latest American trade measures that come into effect on 22 August.
Ottawa’s announcement follows the US decision to introduce tariffs on C$27.6bn ($19.91bn) worth of Canadian exports under section 338 of the Tariff Act of 1930 to protest against “discriminatory” trade policies by Canada.
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Starting 8 September, Canada will apply counter-tariffs of 15%, 25%, or 50% on US goods that are already targeted by US Section 338 and Section 232 tariffs, matching the US rate for each product.
The escalation follows the breakdown of trade negotiations after lengthy discussions.
The Canadian government said talks stalled because the US pushed for terms it viewed as unfavourable, “asking too much” of Canada while offering little in exchange.
In response, the White House criticised Canada, arguing that the US had extended considerable access to its market, including reductions on steel, aluminium, cars, and lumber.
The statement accused Ottawa of opting for retaliation instead of negotiation, and claimed, “Canada has been ‘ripping off’ the US for decades.” It also noted that Canada is among the few, alongside China, to choose trade countermeasures rather than dialogue.
“Their continued discriminatory treatment of US commerce has burdened American workers, farmers, and businesses,” the US statement declared.
It further highlighted that the US economy far outweighs that of Canada in size and population, saying, “The United States has the clear leverage.”
Last week, Canadian Prime Minister Mark Carney sought to counter the US narrative, pointing to nearly $500bn in infrastructure projects and efforts to expand Canadian exports beyond the American market.
“Canadian economic growth is accelerating, and we are on course to have the second-fastest growth in the G7 over the next two years. Our economy is creating jobs at four times the rate of the United States,” he stated.
To mitigate the economic effects on businesses and workers affected by US tariffs, Ottawa also detailed a C$7.5bn support package.
These new and enhanced measures follow nearly C$25bn in previous assistance since the US began applying what Canada calls “unjustified” tariffs.
Tensions have also emerged at the provincial level. Ontario’s premier Doug Ford stated he would consider cutting off electricity and mineral exports to the US, in reaction to the latest round of American tariffs.
The dispute comes after the US recently imposed additional tariffs on a range of imports from more than 60 economies, including Canada.
The measures followed an investigation by the US Trade Representative into the enforcement of restrictions on goods produced with forced labour.
