Canada’s retaliatory tariffs on $20 billion worth of American imports have come into effect, escalating a trade fight that has been marked by intensifying tensions between US President Donald Trump and Canadian Prime Minister Mark Carney.
The new tariffs took effect at 12:01 a.m. ET today, ranging from 15% to 50% and targeting a range of American products, including steel, dairy products, appliances, agricultural equipment, pulp and paper, and electronics.
The Canadian government said that the countermeasures were introduced in response to Washington’s decision to impose a 50% tariff on $20 billion worth of Canadian goods from August 22. “Canada’s counter-measures do not apply to US goods that are in transit to Canada on the day on which they come into force,” the government said.
Canadian Minister of Industry, Mélanie Joly said that Ottawa had deliberately designed the measures to exert political pressure on the Trump administration and encourage Washington to reconsider its trade policies. The tariffs target industries that have been particularly affected by US duties, adding to the economic pressure between the two North American neighbours.
Ottawa has, however, exempted American seafood from the 25% duties, sparing producers in key US states including Alaska and Maine from potentially significant costs.
The latest measures follow a series of escalating trade restrictions imposed by Washington. Trump last month announced a new 50% tariff on Canadian cars and raw materials and accused Canada of “ripping off” the United States “for years.” Earlier US tariffs have affected a range of Canadian exports, including hockey sticks and cement, with the measures covering approximately 5.5% of Canada’s exports to the United States.
The latest escalation comes after trade negotiations between the two countries broke down on August 21 following several days of meetings in Washington. Carney said that the terms presented by the Trump administration were ultimately unacceptable. He also accused US negotiators of introducing restrictions on Canadian trade agreements with other countries at the last minute.
Since the collapse of the negotiations, tensions have increasingly spilled beyond trade into broader diplomatic relations. Last week, Carney called on the Trump administration to “start being serious” about resolving the dispute as Ottawa and Washington remain divided over tariffs and other trade-related measures.
Trump and senior US officials have repeatedly criticised Canada and its leadership, while the US President has also made a series of symbolic gestures that have irritated Canadians. Among them was an executive order renaming Lake Ontario as “Lake America,” a move that has been rejected by Canadians.
The worsening relationship between the two countries has raised concerns about the economic consequences of prolonged trade restrictions, given the extensive commercial ties between Canada and the United States.
Trump Threatens To Block Bombardier Sales
The trade dispute escalated further on Monday when Trump threatened to prevent Canadian aircraft manufacturer Bombardier Aviation from selling aircraft in the United States unless the company moves manufacturing to the US. “No more selling Bombardier in the United States!” Trump wrote in capital letters on his Truth Social platform.
Trump did not specify what measures he would use to block the company’s sales, but said Bombardier would have to manufacture its aircraft in the United States if it wanted continued access to the American market. “If they want our Market, they must build here, and stop treating America like a ‘piggybank,’” Trump said.
The threat could have significant implications for Bombardier, whose aircraft are widely used by US airlines.Thousands of Bombardier aircraft currently operate in domestic airline fleets across the United States, making the American market an important one for the Quebec-based manufacturer.
Bombardier responded by highlighting its existing contribution to the US economy and its extensive American operations. In a statement issued on Monday, the company said that it had created “tens of thousands of jobs across the United States,” with direct employment in more than 20 states, including Kansas, Texas, Arizona and California.
The company also said it spends more than $2.5 billion annually with suppliers and maintains a supply chain involving approximately 2,800 American companies across 47 states.
Bombardier’s response underscores the complex economic relationship between the two countries, with Canadian companies maintaining significant operations and supply chains in the United States while American businesses depend heavily on the Canadian market.
Trump’s threat against Bombardier therefore adds another dimension to the escalating trade dispute, as Washington and Ottawa continue to exchange tariffs and increasingly pointed political statements. With negotiations currently stalled, the latest measure suggests that the trade confrontation between the two countries is likely to remain a major point of tension in their relationship.
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