Canada’s counter-tariffs on $27.6 billion of U.S. goods take effect

Canada’s retaliatory tariffs on American goods came into force just after midnight Eastern Time on Tuesday, 8 September. The duties cover about CA$27.6 billion, or US$19.9 billion, of imports from the United States. Rates sit at 15, 25 and 50 percent. Ottawa designed the list to match, dollar for dollar and rate for rate, the 50 percent U.S. tariffs that hit Canadian goods on 22 August after three days of talks failed.

Prime Minister Mark Carney set the tone last week. “We couldn’t accept what they offered. We wouldn’t give what they’d asked. As a result, the U.S. has imposed new tariffs designed to hurt and divide us,” he said. Finance Minister François-Philippe Champagne had already said Canada would match the new U.S. tariffs on the same value of American goods.

The Canadian list draws from products Washington targeted under Section 338 of the Tariff Act of 1930 and Section 232 of the Trade Expansion Act of 1962. Sectors include steel and aluminium, dairy, appliances, agricultural equipment, pulp and paper, electronics, furniture, clothing, cosmetics, plastics, lumber and sporting goods. Government documents put the count at hundreds of tariff lines. One legal briefing counted 648 items. Another government readout spoke of about 700 products. A later compilation listed 874 lines: 21 at 15 percent, 449 at 25 percent and 404 at 50 percent.

The 50 percent band covers steel and aluminium products that had sat at 25 percent, plus furniture and clothing. The 25 percent band covers appliances, fresh cheese and curd, and some steel and aluminium derivatives. The 15 percent band covers selected electronics and tools. Dairy is treated more tightly than in earlier rounds. Powdered milk and whey, and some cheeses including those inside tariff-rate quota access, now face 50 percent. Milk and cream also sit in the 50 percent group. Softwood, including pine, fir and spruce, faces 25 percent. Fish and seafood items were removed from an earlier draft on 26 August.

Washington’s August package hit about US$20 billion of Canadian exports. The U.S. list ran from wine, furniture, dairy and cement to clothing, fishing rods and hockey equipment. Hockey sticks sat on that list. The collapse of talks also puts new strain on the future of the United States-Mexico-Canada Agreement.

Ottawa packaged the tariffs with support. Reuters reported a C$7.5 billion programme for firms and workers. The Business Development Bank of Canada is to offer interest-free loans of C$2.5 million to C$5 million. Industry Minister Mélanie Joly said the response also targets specific U.S. states. Officials have said they do not plan to rewrite the product list before it takes effect.

CUSMA-originating goods keep an exemption in some existing surtax schedules. The new September 8 measures sit on top of earlier steel, aluminium, steel-derivative and motor-vehicle surtaxes. The motor-vehicle surtax stays at 25 percent. Most U.S. steel and aluminium lines rise to 50 percent.

Importers will feel the change first at the border. A U.S. cheese shipment that cleared last week at a lower rate now pays 25 or 50 percent. A Canadian fabricator that buys American steel sheet pays 50 percent instead of 25. Retail prices on appliances and furniture will move if firms pass the duty through. The political test is whether the list brings U.S. officials back to the table or invites another American round. Carney has said the aim is to make Canada harder to squeeze. The first invoices dated 8 September will show how costly that stance is.