Canada Announces Retaliatory Tariffs on US: Duties Up to 50%

Canada will impose tariffs of up to 50% on nearly C$28bn worth of American goods from 8 September

Ottawa: Canada has launched retaliatory tariffs on a broad array of goods imported from the United States in response to the recent increase in tariffs placed on Canadian goods by US President Donald Trump. The Canadian government says the tariffs will be applied to goods worth nearly C$28bn ($20bn; £15bn). The list includes steel, furniture, tuna, cotton shirts and other goods. The tariffs will come into force on September 8. It was stated that the list was created as a reflection of the Canadian goods impacted by the recent US tariffs. This comes as a new step in the rising trade war between two North American neighbors whose talks failed late last week. Canada's Finance Minister, François-Philippe Champagne, said that the tariffs are Canada's response to the 50% tariffs implemented by the Trump government on Canadian goods after their negotiations broke down on Friday. The Canadian response was called "proportionate" and "strategic". The finance minister warned that the US tariffs would affect Canadian workers, businesses and communities. As well as this, the Canadian government allocated an additional C$7.5bn to compensate for the effects of the US tariffs. The money will be used to reduce job losses in the country and to provide financial assistance to the affected businesses.

Trade War Raises Economic Concerns

These actions will add extra pressure to the business sector in both countries. There is a close relationship between the US and Canada, with deeply integrated supply chains in manufacturing, agriculture, energy, and many other industries built up over decades of partnership. Higher tariff rates could mean an increase in trade costs and prices for consumers and businesses. Firms that use import of goods and raw materials may face even higher costs due to this conflict. This move was made despite the fact that the US and Canada are each other’s most important trading partners. There is already concern from the Canadian business community about potential disruption of supply chains due to the trade conflict.

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Political Pressure Grows

Although the poll shows that many Canadians are in favor of the government's stand of being firm against the US, there are still some issues regarding the reason why the current negotiations did not succeed. The conservative party of Canada is demanding for the complete text of the draft agreement with the US in order to have an idea why the negotiation process broke down. As the new tariffs in Canada will start on 8 September, firms from both sides of the border are ready to incur additional expenses from the ongoing tariff dispute between the two countries.