This Wednesday, Canada announced a series of trade sanctions aimed at the United States in response to the Trump Administration's decision to impose a 25% tariff on imported steel and aluminum. Starting Thursday, Canada will enforce a 25% tariff on U.S. goods valued at 29.8 billion Canadian dollars (approximately 20.7 billion U.S. dollars).
The announcement was made by Finance Minister Dominic LeBlanc, Foreign Affairs Minister Mélanie Joly, and Industry Minister Francois-Philippe Champagne. These retaliatory measures will impact 12.6 billion Canadian dollars worth of U.S. steel imports, along with another 14.2 billion Canadian dollars in products such as tools, computers, sporting equipment, and iron stamping products.
These new tariffs add to those already imposed by Canada earlier in March, which targeted 30 billion Canadian dollars in U.S. goods, including alcoholic beverages, orange juice, and home appliances. In total, Canada is levying a 25% tariff on nearly 60 billion Canadian dollars worth of imports from the U.S.
Minister LeBlanc stressed that the Canadian government might impose additional tariffs if the Trump Administration does not reconsider its stance. "We will continue to work tirelessly to persuade Washington to withdraw these unjustified tariffs," he stated.
Meanwhile, Foreign Affairs Minister Mélanie Joly emphasized that this issue would be a priority at the G7 ministers’ summit in Charlevoix. "In all my meetings, I will address this matter to coordinate a response with our European partners and put pressure on the U.S. This conflict is not just economic; it also affects Canada's sovereignty," Joly declared.
Tensions escalated as President Donald Trump announced an increase in tariffs on Canadian steel and aluminum to 50%, following Ontario's decision to raise the price of electricity exported to the U.S. by 25%. Although Canada has since retracted that measure, Trump persists with his tariffs to push Canada towards becoming the 51st state of the U.S.
Trump also demanded that Canada remove a 200% tariff on U.S. milk exceeding an annual import quota. He warned that if his demands are not met by April 2, he would impose high tariffs on Canadian automobiles, which could "permanently destroy Canada's automotive industry."
Canada, having exported vehicles worth 35 billion U.S. dollars to the U.S. in 2023, could face severe economic repercussions if these new tariffs are implemented.
In a surprising turn, Trump revived his proposal that Canada "should become the 51st state of the U.S." He argued that "the U.S. subsidizes Canada's security with 200 billion dollars annually in defense," and that annexation would solve trade issues. "This would eliminate all tariffs and reduce taxes for Canadians. It would be a win-win solution," claimed the president, who even suggested keeping the Canadian national anthem as a gesture of respect.
Former Prime Minister Justin Trudeau vehemently rejected this suggestion. "You cannot take over our country," he declared on social media.
FAQs on Canada-U.S. Trade Dispute
Why did Canada impose tariffs on U.S. goods?
Canada imposed tariffs as a retaliatory measure against the U.S. decision to levy a 25% tariff on Canadian steel and aluminum imports.
What goods are affected by Canada's tariffs?
Canada's tariffs impact U.S. steel imports, as well as other goods such as tools, computers, sporting equipment, and iron stamping products.
How might the tariffs affect Canada's economy?
If the U.S. imposes additional tariffs, particularly on automobiles, Canada's economy could face severe consequences, given its significant exports to the U.S. market.