Trump's new tariffs on Canada spark fresh trade war

Donald Trump announced on Monday that the United States will impose 50 percent duties on a broad list of Canadian imports, covering roughly $20 billion of goods. The move follows the collapse of trade talks at the last minute and took effect over the weekend. In response, Mark Carney, Canada’s prime minister, said Ottawa will introduce matching tariffs "dollar for dollar" starting 8 September.

Scope of the new US duties

The tariffs, applied under Section 338 of the 1930 Tariff Act, target about 5 percent of Canada’s annual exports to the United States. Items range from hockey sticks and wine to cement, honey, seeds and a selection of cosmetics, jewellery and furniture. Some of the products were previously protected by the USMCA, making the new levies a notable shift in the trade pact’s enforcement.

Canada's counter‑measures

Within hours of the US announcement, Canada pledged to mirror the tariffs, focusing on American steel, dairy, appliances, agricultural equipment, pulp and paper and electronics.

"We will match the levies dollar for dollar," Carney said at a press conference on Parliament Hill in Ottawa.

Provincial leaders echoed the federal stance. Doug Ford, premier of Ontario, told reporters that "everything is on the table" and warned the province could restrict electricity and critical minerals if the dispute deepens.

Looking ahead

President Trump has hinted at further actions, including a possible increase in tariffs on Canadian automobiles, trucks and parts to 50 percent from 1 January 2027. The United States already imposes a 25 percent duty on Canadian cars and a 50 percent sectoral tariff on most steel imports. Both sides face the risk of legal challenges, as the use of Section 338 has never been tested in court.

Analysts say the escalating tariffs could push up prices for North‑American consumers and create uncertainty for businesses that rely on cross‑border supply chains. The dispute also puts political pressure on both governments ahead of upcoming elections, with trade policy likely to feature prominently in campaign narratives.

For now, the two neighbours remain locked in a tit‑for‑tat cycle, and the next few months will determine whether negotiations can resume or the trade war will widen further.