Canada strikes back with $155b in tariffs against ‘unjustified’ US trade measures

In a firm response to “unjustified and unreasonable” US tariffs on Canadian goods, Canada announced on Saturday 25 per cent tariffs on $155 billion worth of goods. The move, unveiled by Finance Minister Dominic LeBlanc and Foreign Affairs Minister Mélanie Joly, underscores the growing trade tensions between the two nations.

“These countermeasures have one goal: to protect and defend Canada’s interests, consumers, workers, and businesses.” The Government of Canada statement read.

First Phase: Immediate Tariffs on US Goods

Starting February 4, 2025, when the US tariffs take effect, Canada will impose 25 per cent tariffs on $30 billion worth of American goods. The targeted products include:

• Food & beverages: Orange juice, peanut butter, coffee, wine, spirits, beer
• Consumer goods: Apparel, footwear, cosmetics, appliances
• Transport & industrial goods: Motorcycles, pulp, and paper

A full list of affected goods will be released soon, the statement noted.

Additional $125 Billion in Tariffs

According to Minister LeBlanc, the government intends to impose tariffs on an additional list of imported US goods worth $125 billion. A full list of these goods will be made available for a 21-day public comment period prior to implementation. The list is expected to include:

• Automotive sector: Passenger vehicles, trucks, and electric vehicles
• Industrial & agricultural sector: Steel and aluminum products, beef, pork, dairy, certain fruits and vegetables.
• Aerospace & transport: Buses, recreational vehicles, and boats

In addition to this initial response, Ministers LeBlanc and Joly reiterated that all options remain on the table as the Canadian government considers additional measures, including non-tariff options, should the United States persist with its unjustified tariffs on Canada.

Canada Pushes back Against US Claims

The US administration’s justification for its tariffs—reportedly linked to concerns about fentanyl and border security—has been dismissed by Canadian officials. Less than 1 per cent of illegal fentanyl and border crossings into the US originate from Canada, making these tariffs an unwarranted attack on Canadian businesses and workers, the government asserts.

“We will not stand idly by when our nation is being needlessly and unfairly targeted.”

Economic Consequences on Both Sides of the Border

The Canadian government warns that these tariffs will have severe repercussions for the US economy, potentially disrupting:

• American auto production
• Oil refineries
• Prices for gas, groceries, and consumer goods

Mitigation Measures for Canadian Businesses

To shield Canadian businesses and workers from the fallout, the government is introducing a remission process for businesses requesting exceptional relief from the tariffs. More details on this framework will be announced in the coming days.

Additionally, Canada is working with provincial governments, industry leaders, and labour groups to ensure a coordinated national response and ongoing engagement with US policymakers to resolve the dispute.

Minister LeBlanc emphasised that Canada’s actions are measured but resolute, stating:

“These U.S. tariffs are plainly unjustified. They are detrimental to both American and Canadian families and businesses.”

“Working with provincial, territorial and industry partners, our singular focus is to get them removed as quickly as possible. Until then, our response will be balanced and resolute.”

Minister Mélanie Joly reinforced Canada’s commitment to standing up for its economy:

“Canada will not stand by as the US, our closest and most important trading partner, applies harmful and unjustified tariffs against us.”

“With these countermeasures, we are defending Canada’s interests and are doing what is best for Canadians and our economy.”

Quick facts

According to the Government of Canada website:

Canada is the largest buyer of US goods, purchasing more than China, Japan, France, and the UK combined. The Canada-US trade relationship supports millions of jobs, with over $2.5 billion in goods and services crossing the border daily. Canada is the top export market for 36 US states and a key trading partner for 46 states, with 43 states exporting over $1 billion annually.

Despite current tensions, Canada remains the only major US trade partner with whom the US has a manufacturing trade surplus ($33 billion in 2023). The new Canadian tariffs will not apply to US goods already in transit when the countermeasures take effect.

To mitigate economic impacts, Canada has support programmes for affected businesses and workers, including financial assistance and employment insurance. Additionally, the government will continue to monitor the economic impact and introduce further measures if needed.

Canada has also launched a $1.3 billion Border Plan on December 17, 2024 focused on enhancing security, combatting fentanyl trade, strengthening law enforcement, and improving border efficiency.

Attribution: Amwal Al Ghad English