Canada's Retaliatory Tariffs on US Goods Take Effect

Canada's retaliatory tariffs on American goods are now in effect. The duties took hold just after midnight ET Tuesday — 12:01 a.m., under an executive action known as an order in council — answering the 50% tariffs Washington imposed on Canada last month, CTV News and The Associated Press reported.

Ottawa calls it a match, "dollar for dollar" and "rate for rate."

What's taxed, and how hard

The tariffs hit hundreds of American products at rates of 15%, 25% or 50%, according to the AP. Canadian duties on U.S. steel, aluminum and iron products doubled to 50%, and furniture and clothing were also hit with the top rate, CNBC reported. The covered list includes dairy and cheese, agricultural and farm equipment, paper, household appliances, electronics, cosmetics, metal parts and wood products.

Estimates of the total differ. The AP puts the value at about $20 billion in U.S. goods — roughly 6% of the $333.6 billion the United States exported to Canada last year. CNBC reports the duties cover $27.6 billion worth of U.S. products. Canada's Department of Finance said the measures would let Canadian workers, producers and manufacturers better compete against U.S. products at home, per CNBC.

Existing Canadian counter-tariffs stay in place, including 25% on autos.

Provinces are moving too. Saskatchewan's retaliatory tax on American liquor kicks in for retailers Tuesday, CTV News reported. Eight of Canada's 10 provinces continue to restrict or ban sales of U.S. alcohol, and the Distilled Spirits Council says U.S. spirits exports to Canada fell more than 70% year over year after those restrictions took effect, according to the AP.

Who gets hit in the US

The pain is concentrated, not national. RBC Economics said the measures were unlikely to dent U.S. growth overall but could hit some businesses hard. Economists told CNBC that while the affected goods are a relatively small slice of overall trade, small and mid-sized firms in the most exposed sectors face a severe blow.

Geographically, the exposure lands on the manufacturing belt. The measures will hit U.S. exporters particularly hard in states such as Michigan and Ohio, which host contested races in November's midterm elections, the Japan Times reported. Cleveland.com wrote Tuesday that Ohio has billions riding on what happens next.

How it got here

Trade talks between the two countries collapsed Aug. 21, the AP reported, with each side blaming the other. Since then the Trump administration has stacked on tariffs and threats.

On Monday, President Donald Trump posted on Truth Social: "NO MORE SELLING BOMBARDIER IN THE UNITED STATES! Their products aren't good enough! If they want our Market, they must build here, and stop treating America like a 'piggybank.'" The AP characterized the post as a threat to ban sales of aircraft from the Canadian manufacturer unless it builds planes in the U.S.; no such ban has been enacted.

Flavio Volpe, president of the Canadian manufacturing trade group APMA, responded on X that Bombardier uses U.S.-made GE and Honeywell jet engines and employs about 3,000 U.S. workers.

U.S. Trade Representative Jamieson Greer has threatened that Washington could ban some Canadian goods outright. Trump has also threatened 50% tariffs on Canadian vehicles, auto parts and steel next year if Canada does not "fall in line" — an escalation the AP notes could hammer plants and raise vehicle prices across North America, because parts and finished cars cross the border repeatedly during production.

What Ottawa says next

Prime Minister Mark Carney says U.S. demands could hollow out key Canadian industries, and that talks can resume when the Americans "stop doing memes, stop throwing shade, stop trying to be tough." Ottawa announced a $7.5 billion support package for businesses and workers last month, on top of an existing $25 billion program, CNBC reported.

Canada starts at a disadvantage — the U.S. economy is roughly 13 times larger and Canada sends more than 70% of its exports south — but its economy grew at a 3.2% annualized rate in the second quarter, against 1.5% in the United States, according to the AP.

Industry Minister Mélanie Joly's line: "I'm convinced that we will be able to show the world that Canada will win this trade war."

Reporting: CTV News, CNBC, The Associated Press via The Boston Globe, BBC News, Japan Times, Cleveland.com, Washington Examiner.