Canada Launches Retaliatory Tariffs Against U.S.

OTTAWA — In a significant escalation of trade tensions, Canada has announced retaliatory tariffs on U.S. goods totaling $29.8 billion, following U.S. President Donald Trump’s imposition of a 25% tariff on Canadian steel and aluminum. Canadian Finance Minister Dominic LeBlanc made the announcement on March 12, 2025, asserting that these measures are essential for protecting national interests.

The new tariffs, which will take effect in the coming days, will impact a wide array of U.S. products, marking the latest round in an ongoing trade standoff between the two countries. LeBlanc described Trump’s decision to impose tariffs on March 11 as “unreasonable and unacceptable,” prompting Canada to mirror Washington’s actions to mitigate the economic repercussions, especially given that daily trade turnover between the U.S. and Canada exceeds $3.6 billion.

LeBlanc warned that American consumers would also feel the effects of the tariffs, as the increased costs of imports are likely to be passed on to them. This move is part of a broader Canadian strategy to respond to Trump’s trade policies. Prime Minister Justin Trudeau had previously outlined plans to impose tariffs on up to $155 billion in U.S. exports in two phases: the first phase, affecting $30 billion, has been in place since February, while the second phase targeting $125 billion was set to commence later. However, following the escalation regarding metal tariffs, Ottawa expedited its response.

According to CBC News, the list of targeted items includes orange juice, peanut butter, whiskey, steel, and appliances, all of which are expected to negatively impact American manufacturers. The conflict intensified when Trump linked his tariffs to the need to combat the influx of fentanyl from Canada, despite U.S. Customs Service data indicating that less than 1% of the drug originates from Canada, with Mexico being the main source. Trudeau dismissed these allegations as “far-fetched” and accused the U.S. of attempting to exert economic pressure.

In response to Trump’s threat to double metal tariffs to 50% on March 11, Canada swiftly implemented new measures, and there were even discussions in Ontario about raising electricity export prices to the U.S., although this idea was later abandoned following negotiations.

The trade war has already caused fluctuations in financial markets, with the Canadian dollar and Mexican peso declining and U.S. stocks falling amid fears of rising inflation, according to Reuters. Economists project that the tariffs could reduce Canada’s GDP by 0.3% in the long term if the dispute remains unresolved. Meanwhile, Trump has indicated a willingness to escalate measures further, including auto tariffs, if Canada does not retract its countermeasures, casting uncertainty on the future of the U.S.-Mexico-Canada Agreement (USMCA).