Canada’s 15 to 50 percent tariffs on US goods take effect after midnight

Canada’s retaliatory tariffs on American goods came into force at 12:01 a.m. Eastern Time on Tuesday, closing a three-week gap between announcement and collection. The duties cover about $27.6 billion of annual US imports, the same value Washington hit on 22 August, and apply rates of 15, 25 and 50 percent across hundreds of tariff lines.

The Department of Finance Canada framed the package as a dollar-for-dollar, rate-for-rate reply to US Section 338 and Section 232 tariffs. Steel, aluminium and iron products that already faced a 25 percent Canadian surtax now face 50 percent. Furniture, clothing, some beauty products and concentrated dairy sit in the same top band. Cheese, major appliances and some seafood sit at 25 percent. Electronics and tools sit at 15 percent. Existing 25 percent duties on US-built cars stay in place.

How the list was built

Ottawa drew the product list from the same sectors Washington had already taxed: steel and aluminium, dairy, appliances, agricultural equipment, pulp and paper, plastics, cosmetics and electronics. A Canadian official told reporters in August that the 50 percent band covers steel rods, bars and sheets plus prefabricated items such as bridges, towers, scaffolding, and door and window frames. Softwood lumber, including pine, fir and spruce, is in the 25 percent band.

The legal form is a surtax, not a new statute. That matters for importers who must now classify goods against an expanded schedule and decide whether a CUSMA claim still works. The August US tariffs, imposed under a Depression-era statute, do not allow Canada the USMCA exemptions that had softened earlier rounds. Canadian counsel at Osler noted that the new surtaxes add to, and in many cases raise, older surtaxes on steel, aluminium, steel derivatives and motor vehicles.

Numbers in the public record still disagree on the headline. Finance Canada’s August statement used $27.6 billion. Several US and Reuters write-ups on Tuesday used “about $20 billion.” The gap is accounting, not policy. One figure tracks the US list of Canadian goods taxed on 22 August. The other tracks a narrower slice of what Canada actually imports. Either way the share of US exports to Canada that now faces a new Canadian duty is in the mid-single digits of last year’s total.

Why the talks failed

Negotiations between Ottawa and Washington collapsed at the end of August. Officials on each side blamed the other for last-minute demands. Prime Minister Mark Carney said last week: “We couldn’t accept what they offered. We wouldn’t give what they’d asked. As a result, the US has imposed new tariffs designed to hurt and divide us.”

Carney has been telling Canadian audiences that the country must reduce its dependence on an economy 13 times its size. Industry Minister Mélanie Joly said in August that the response also targets specific US states. The federal government announced a C$7.5 billion support package for firms and workers hit by the US duties, including interest-free loans of C$2.5 million to C$5 million from the Business Development Bank of Canada.

President Donald Trump spent part of Tuesday attacking Bombardier, a Canadian planemaker with plants on both sides of the border. The company put out a list of US sites and jobs in reply. That exchange is a reminder that the tariff war is already inside firms that treat the Detroit-Windsor corridor as one factory floor.

What crosses the river now

The Gordie Howe International Bridge between Detroit and Windsor opened to traffic earlier this year. It was built to take pressure off the Ambassador Bridge, which still carries a large share of North American merchandise trade. Trucks that roll over either span on Tuesday now face a different invoice if their cargo is steel, furniture, cheese or a washing machine.

Canada is one of the few US trading partners that chose a matching tariff rather than a negotiated climbdown. The political bet in Ottawa is that voters will accept higher prices on US goods if the alternative is absorbing another 50 percent levy with no reply. The commercial bet is that some US exporters will cut prices or shift production rather than lose the Canadian shelf. Neither bet has a 90-day test built in. The surtaxes stay until a deal is signed or one capital blinks.

For now the practical work sits with customs brokers in Windsor, Fort Erie and Vancouver. They have a new schedule, a live 50 percent line on steel, and a client list that still ships the same parts it shipped last month. The trade war is 18 months old. Tuesday is simply the first morning the new Canadian side of the ledger is being collected.