Canada Announces Retaliatory Tariffs on $27.6B of U.S. Goods

After three days of talks in Washington collapsed and U.S. Section 338 tariffs took effect on August 22, Ottawa responded on August 25 with a sweeping counter-tariff package targeting C$27.6 billion ($19.9 billion USD) of U.S. imports — matching the American measures dollar-for-dollar, rate-for-rate. The counter-tariffs take effect September 8, 2026 at 12:01 a.m.

The Canadian list covers 874 product classifications at rates of 15%, 25%, and 50%. Targeted U.S. goods include steel and aluminum (facing a new 50% Canadian duty, up from 25%), farm equipment, home appliances, pulp and paper, electronics, and dairy products. Finance Minister Chrystia Freeland described the response as "measured, proportionate, and laser-focused" on goods produced in U.S. congressional districts whose representatives supported the tariffs.

Alongside the counter-tariffs, Ottawa announced a C$7.5 billion worker and business support package: C$3.5 billion for expanded Employment Insurance access and retraining, C$1.5 billion in liquidity support for small and medium-sized businesses, and top-ups for the agricultural and automotive sectors. The package builds on nearly C$25 billion in trade-related supports rolled out since February 2025.

Business reaction was mixed. The Canadian Federation of Independent Business warned that counter-tariffs risk accelerating domestic inflation. BNN Bloomberg described the approach as "economic chemotherapy" — potentially necessary but with serious side effects for Canadian importers. Economists at BMO and Oxford Economics estimated the combined tariff escalation will shave 0.3–0.5 percentage points from Canadian GDP in the second half of 2026.