Canada is hitting back at the United States with hefty tariffs on a range of American goods worth 30 billion Canadian dollars, escalating the trade tensions between the two neighbors.
On Sunday, Canadian Finance Minister Dominic LeBlanc announced that starting February 4, Canada will impose 25% tariffs on U.S. products such as orange juice, peanut butter, wine, coffee, appliances, cosmetics, and paper products. This move comes as the first phase of Canada’s retaliation against U.S. President Donald Trump’s decision to slap matching tariffs on Canadian imports.
“We will not stand by while our workers and industries are unfairly targeted,” LeBlanc said in a statement. The Canadian tariffs are set to take effect on the same day as the U.S. tariffs on Canadian products.
But that’s just the beginning. Canada is planning a second wave of tariffs on U.S. imports valued at 125 billion Canadian dollars. This list, expected to be released in the coming days, could include passenger cars, trucks, buses, steel and aluminum products, fruits and vegetables, aerospace products, beef, pork, and dairy items. Before these tariffs kick in, there will be a 21-day public consultation period.
The escalating trade dispute follows Canadian Prime Minister Justin Trudeau’s vow to retaliate after President Trump announced he would impose 25% tariffs on most Canadian products and 10% on Canadian energy products starting February 4.
Trudeau hinted at even more measures beyond tariffs. “We’re considering additional non-tariff trade actions,” he said, which could involve restricting exports of critical minerals and energy products to the U.S., or blocking U.S. companies from bidding on Canadian government contracts.
The Canadian Chamber of Commerce has warned that a full-blown trade war could have serious economic consequences. They estimate that the tariffs and retaliation could lead to a 2.6% drop in Canada’s real GDP, costing each Canadian household an average of 1,900 Canadian dollars annually. In the U.S., they predict a 1.6% decline in GDP, with American households losing an average of $1,300 each year.
