Canada has introduced new retaliatory tariffs on US imports, escalating its trade dispute with its largest trading partner after negotiations between the two countries broke down last month.
The countermeasures came into force shortly after midnight on Tuesday and cover about $20 billion worth of US products.
The tariffs range from 15% to 50% and affect a wide range of goods, including steel, furniture, clothing and electronic products.
Prime Minister Mark Carney’s government has described the measures as a response to US trade restrictions, as tensions between the neighbouring countries continue to mount.
The latest action has raised concerns about a further escalation of the 18-month-old trade dispute and the possible impact on the wider United States-Mexico-Canada Agreement (USMCA).
Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and a member of Carney’s advisory committee on bilateral economic relations, warned that the dispute could develop into an “escalatory spiral”.
He, however, acknowledged the need for Ottawa to maintain pressure on Washington while seeking leverage in future negotiations.
The latest Canadian tariffs follow US duties introduced last month on a range of Canadian exports, including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment.
Those US measures covered about $20 billion, representing roughly 5% of Canada’s exports to the United States.
Canada sends nearly 68% of its total exports to the US, although around 80% of those shipments have moved duty-free this year under exemptions provided by the USMCA.
However, the latest US tariffs were imposed under a separate law and do not provide access to the agreement’s exemptions, increasing uncertainty for Canadian businesses.
The trade tensions have also raised concerns about investment and economic growth in Canada, whose economy is significantly smaller than that of the United States.
Carney has maintained that Ottawa remains prepared to reach an agreement that benefits both countries, but a Canadian government source said there are currently no formal talks between officials on either side.
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Meanwhile, US President Donald Trump has threatened to increase tariffs on Canadian cars, trucks and automotive parts to 50% from January 1.
The prolonged dispute has also placed pressure on the future of the USMCA, which is subject to annual reviews after Trump declined to extend the agreement for another decade.
Harvey urged the Canadian Government to keep communication channels open with Washington and avoid excessive rhetoric while waiting for the US administration to reassess the economic consequences of the trade measures.
