Canada Announces Retaliatory Tariffs Against US in Growing Trade War

Canada has announced retaliatory tariffs against the US, in a move that marks the beginning of a trade war between the neighbouring countries.

Prime Minister Justin Trudeau set out “far-reaching” tariffs of 25 per cent, affecting CD$155 billion worth of American goods ranging from beer and wine, to household appliances and sporting goods.

The move matches US President Donald Trump 25 per cent levy on Canadian and Mexican imports to the US — and an additional 10per cent on China — over his concerns about illegal immigration and drug trafficking.

Trudeau said he would “not back down in standing up for Canadians”, but warned of real consequences for people on both sides of the border.

“We don’t want to be here, we didn’t ask for this,” he said at a news conference late on Saturday.

The Canadian prime minister added that tariffs on 30bn-worth US goods would come into force on Tuesday and another 125bn in 21 days to give Canadian firms time to adjust.

Trudeau’s response targets items including American beer, wine, bourbon, fruits and fruit juices, vegetables, perfumes, clothing and shoes, as well as household appliances, sporting goods and furniture.

Lumber and plastics will also face levies and non-tariff measures are also being considered are related to critical minerals and procurement.

Economists have warned the introduction of the import taxes by the US, and the response from Canada, as well as Mexico and China, could lead to prices rising on a wide range of products for consumers.

A tariff is a domestic tax levied on goods as they enter a country, proportional to the value of the import.

The prospect of higher tariffs being introduced on imports to the US has been concerning many world leaders because it will make it more expensive for companies to sell goods in the world’s largest economy.

Christopher Sands, director of the Wilson Center’s Canada Institute, told the BBC that tit-for-tat tariffs between the US and Canada were “mutually assured destruction” and they would impact people’s lives very quickly.

He said there would be no adjustment time as US Treasury Secretary Scott Bessent had recently proposed: “Just a massive hit that’s going to make a lot of people’s lives a lot tougher, very quickly.”

But the taxes are a central part of Trump’s economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue – and in this case, pushing for policy action.