Canada has announced the imposition of 25% tariffs on C$155 billion (approximately $107 billion USD) worth of U.S. goods in retaliation for U.S. President Donald Trump’s latest trade restrictions. Prime Minister Justin Trudeau made the announcement on Tuesday, condemning the U.S. tariffs as baseless, unjustified, and harmful to both economies. He stated that Canada had no choice but to respond forcefully to protect its industries and workers, vowing to take further action if necessary. The Canadian government also intends to challenge the U.S. tariffs through the World Trade Organization (WTO) and the U.S.-Mexico-Canada Agreement (USMCA).
Trudeau emphasized that Canada’s countermeasures will be implemented in two phases. The first phase, which has already taken effect, places a 25% tariff on C$30 billion worth of U.S. goods, including a wide range of consumer products such as orange juice, peanut butter, wine, coffee, and household appliances. The second phase, set to begin in 21 days, will see an additional 25% tariff imposed on C$125 billion worth of U.S. imports. This round will target key sectors, including automobiles, steel, and aluminum. Trudeau warned that if the U.S. fails to withdraw its tariffs, Canada is prepared to extend its countermeasures further, potentially introducing new non-tariff barriers in consultation with provincial and territorial leaders.
The escalation follows President Trump’s decision to impose 25% tariffs on imports from Canada and Mexico earlier the same day. Trump justified the move as part of his broader economic strategy to protect American manufacturing jobs, curb illegal immigration, and address concerns about the trade deficit. In addition to targeting Canada and Mexico, the U.S. administration also introduced a separate 10% tariff on Chinese goods, further fueling trade tensions with Beijing.
Trudeau was quick to denounce Trump’s decision, labeling it “reckless” and a serious threat to the long-standing trade relationship between the two nations. He argued that these tariffs would not only hurt Canadian businesses but also lead to higher costs for American consumers and manufacturers. The prime minister further stressed that Canada had made multiple attempts to resolve trade disputes through diplomatic channels, but Washington had refused to engage in meaningful negotiations.
The trade dispute has already had a significant impact on financial markets. The Dow Jones Industrial Average plummeted nearly 800 points on Tuesday, erasing all gains made since the U.S. election. The S&P 500 and Nasdaq also suffered steep losses, each dropping by around 2%. Analysts warn that the ongoing tit-for-tat tariffs could lead to prolonged economic uncertainty, supply chain disruptions, and price hikes on essential goods. Major American corporations with global supply chains, such as General Motors, Tesla, and Walmart, have expressed concerns about the long-term consequences of these tariffs.
Beyond Canada, other affected nations are preparing their own countermeasures. China has already announced retaliatory tariffs on U.S. agricultural products and placed several American companies on export control lists. Mexico is expected to introduce its own set of tariffs in the coming days, further escalating the trade standoff. European allies have also voiced concerns over the broader implications of Trump’s aggressive trade policies, warning that they could destabilize global markets.
Trudeau reaffirmed that Canada will not back down in the face of what he described as unfair U.S. trade actions. “Our message is clear: we will defend Canadian workers and businesses at any cost,” he said. “If the U.S. continues down this path, we will have no choice but to escalate our response.” He also urged American lawmakers and business leaders to push back against the tariffs, arguing that they were ultimately counterproductive and would hurt both countries in the long run.
The trade war between the U.S. and Canada has now reached one of its most intense phases, with both sides showing no signs of backing down. As tensions continue to mount, businesses and consumers in both nations are bracing for potential economic fallout. Many experts believe that unless the two governments return to the negotiating table, the situation could spiral into a prolonged economic conflict with lasting consequences for North American trade.
