The U.S.-Canada trade war is escalating as Canada imposes a new 25% reciprocal tariff on an additional $29.8 billion worth of U.S. imports. This follows the $30 billion in tariffs announced last week.
The move comes a day after U.S. President Donald Trump threatened to double tariffs on Canadian steel and aluminum to 50%, responding to Ontario Premier Doug Ford’s now-suspended 25% surcharge on Ontario’s energy exports to the U.S.
Ford and U.S. Commerce Secretary Howard Lutnick are set to meet in Washington, D.C. for trade talks on Thursday.
“The US administration is once again inserting disruption and disorder into an incredibly successful trading partnership and raising the costs of everyday goods for Canadians and American households alike,” Finance Minister Dominic LeBlanc said in Ottawa on Wednesday. “We will not stand idly by while our iconic steel and aluminum industries are being unfairly targeted.”
LeBlanc announced the 25% reciprocal tariffs on an additional $29.8 billion worth of select U.S. imports will be effective at 12:01 am on Thursday. The new tariffs make up a total $155 billion in American goods Canada has pledged to tax, but only began implementing partially last week.
“This includes steel products worth $12.6 billion and aluminum products worth $3 billion as well as additional imported U.S. goods worth $14.2 billion for a total of $29.8 billion,” he said.
Additional products affected by the new counter-tariffs include computers, sports equipment and cast iron products. These tariffs are in addition to Canada’s 25% counter-tariffs on $30 billion of imports from the U.S. imposed in response to tariffs put in place on March 4.
LeBlanc warned that Canada “may impose” further tariffs if the U.S. escalates trade restrictions further.
According to World Bank data, Canada exported an estimated $439.6 billion worth of goods and services to the U.S. in 2023, accounting for 21.8 per cent of Canada’s GDP for that year. In contrast, the U.S. exported $352.76 billion in the same year, which means U.S. exports to Canada amounted to only 1.32 per cent of America’s total GDP.
While the World Bank reported total exports of goods and services in the U.S. as making up 11.01 per cent of its GDP, Canada was estimated by the same source to be more reliant on exports for its economy, with such exports comprising 33.37 per cent of its GDP.
The EU similarly slapped counter-tariffs against Trump, who applied tariffs worth USD $28 billion against the European trading bloc. The tariffs are estimated to be worth $26 billion euros, close to $40 billion in Canadian currency.
Trump has repeatedly promised to match any tariffs placed on the U.S. by any nation, making a limit to the extent of the tariffs almost non-existent.
Foreign Affairs Minister Melanie Joly promised to work with her “European colleagues” to coordinate a response and “pressure to end” the tariffs against the EU and Canada.
“This is much more than about our economy. It is about the future of our country. Canadian sovereignty and identity are non-negotiable,” Joly said. “Canadians have had enough, and we are a strong country. We’ll defend our sovereignty, we’ll defend our jobs and will defend our way of living, and we will do so all together every single day and one day at a time.”
LeBlanc signalled that Canada would be open to “review” the USMCA trade deal signed by Trump early, which would otherwise be scheduled to take place in 2026. He said Canada was open to starting the review of the trade agreements early to find a deal that “benefits all of North America.”
Trump has announced carve-outs for tariffs on items that fall under the USMCA trade deal for both Canada and Mexico.
LeBlanc also said all talks with the U.S. by the Canadian government, one of which is scheduled on Thursday, will revolve around getting exemptions to tariffs such as those exempted by the USMCA trade deal and ultimately removing the tariffs against the Canadian economy altogether.