Canada announces retaliatory tariffs on $20 billion worth of US goods and a business support package

On Tuesday, the Canadian federal government announced retaliatory tariffs on more than 700 US goods worth 27.6 billion Canadian dollars (about $20 billion US), along with a C$7.5 billion support package for domestic businesses and workers.

When two closest allies and largest trading partners cannot agree, the cost of conflict is measured not only in dollars but also in jobs, closed factories and lost trust. Canada, which for decades relied on the US market, is now forced to defend its interests with mirror measures. Retaliatory tariffs are not just an economic response but a statement that Ottawa is ready to pay for its sovereignty. However, the key question is not who will strike first, but whether this trade war can end differently from its predecessors, leaving behind not only protectionist barriers but a new reality for the North American economy.

Canadian officials said the retaliatory measures match the total value of Canadian goods subject to the latest 50% US tariffs, ensuring a "dollar for dollar, rate for rate" effect. The retaliatory tariffs are officially set to take effect on 8 September. Finance Minister François Philippe Champagne said the reciprocal tariffs, together with the multi billion dollar support package, would protect workers, farmers, families and businesses.

According to the list published by the Finance Ministry, the new targeted retaliatory tariffs are focused on sectors such as steel, dairy, household appliances, agricultural equipment, pulp and paper, and electronics, with rates set at three levels: 15%, 25% and 50%. In some sectors, such as steel and aluminium, existing countervailing duties will be raised from 25% to 50% to match US rates. Other existing countervailing duties, including those on US cars, will also remain in place, the ministry said. A 25% tariff will be imposed on dairy products such as cheese, fish, seafood and some steel and aluminium derivatives.

In addition to the tariffs, the federal government announced a C$7.5 billion support package, primarily aimed at small and medium sized enterprises. Ottawa promised to help companies avoid layoffs, enable more workers to upgrade their skills and increase flexibility in accessing unemployment benefits.

The trade conflict between Canada and the US escalated after Washington imposed 50% tariffs on Canadian goods in response to the failure of talks on renewing the CUSMA agreement. Canada, which is the largest export market for many US states, responded with measures affecting a wide range of goods — from steel to dairy products. The C$7.5 billion support package is designed to cushion the blow for Canadian producers, especially those most dependent on exports to the US. Experts warn that a protracted trade war could lead to higher prices for consumers on both sides of the border and slower economic growth.

As CCTV+ reports, Canada's retaliatory tariffs and the accompanying support package demonstrate Ottawa's determination to defend its economic interests, but also highlight the vulnerability of the Canadian economy to trade wars. In the coming weeks, the two sides will continue negotiations, but given the tough rhetoric, a compromise appears elusive. Canadian businesses are bracing for new conditions, and consumers for possible price increases.