The trade war between the US and Canada has escalated again! Canada announced “equal countermeasures” of about 20 billion US dollars of US goods will be subject to tariffs of up to 50%

The Zhitong Finance App learned that the Canadian government announced the imposition of a new round of large-scale retaliatory tariffs on US goods in response to the new tariffs imposed by US President Trump on Canadian goods last weekend. Canadian Prime Minister Carney has adopted an “equal countermeasure” strategy. The new measures will cover about 20 billion US dollars of imported goods from the US, and also launch a 7.5 billion Canadian dollar corporate aid plan to support Canadian companies affected by the US-Canada trade war.

According to the measures announced by the Canadian government, Canada will double to 50% the existing countermeasure tariffs on US steel and aluminum products. At the same time, furniture, clothing and apparel products, video game consoles, smart phones, and other electronic products made in the US will also be subject to a new 50% tariff.

The new round of countermeasures officially came into effect on September 8.

The annual import value of US goods covered by Canada's countermeasure tariffs this time is about 20 billion US dollars, which is roughly equivalent to the scale of trade involved in the Trump administration's imposition of tariffs on Canadian goods last Saturday. This amount is equivalent to about 6% of Canada's total imports from the US last year.

In addition to some products facing high tariffs of 50%, Canada will also implement countermeasures at different tax rates on other US goods. Among them, US goods, including household appliances, cheese, fish, seafood, and some products derived from steel and aluminum, will be subject to 25% tariffs; a range of American-made machinery, industrial tools, and agricultural equipment will face 15% tariffs.

Canadian government officials said that the main purpose of this measure is not to increase government revenue through tariffs, but rather to help Canadian companies affected by US tariffs maintain domestic market share by increasing the import costs of competitive US products.

This large-scale countermeasure also means a marked shift in the Carney administration's attitude towards Trump's trade policy. A year ago, in order to improve the relationship between the US and Canada and push the two sides back to the negotiation table, Carney abolished the retaliatory tariffs imposed by Canada on a large number of US goods. Since then, Canada has also made concessions in various fields, including digital policy, hoping to finally reach a new trade agreement with the US.

However, trade negotiations between the two countries broke down last Friday.

Carney said on Monday that he has become increasingly aware that US officials are trying to disrupt Canada's key industries such as steel, aluminum, and automobile manufacturing. The Canadian government said in a press release announcing countermeasures that the US proposed new conditions during the negotiations. These requirements are not in Canada's best interest; in fact, they “require Canada to pay too much and give too little in return.”

This has also prompted the Canadian government to shift from its previous strategy of focusing on negotiations and concessions to more direct tariff countermeasures.

In addition to imposing retaliatory tariffs on US goods, the Canadian government also announced the launch of a 7.5 billion Canadian dollar (about 5.4 billion US dollars) business support plan to mitigate the impact of the trade war on domestic enterprises and the job market.

Part of the funding will be used to expand existing business aid programs launched last year. New support measures include providing liquidity support to small and medium-sized enterprises affected by trade shocks, providing capital for businesses affected by US tariffs, speeding up their investment and transformation projects, and extending and increasing the flexibility of employment insurance plans for affected industries.

These policies are designed to help Canadian businesses maintain cash flow, investment, and employment in the face of rising export costs and reduced orders due to US tariffs.

Before Canada's countermeasures were introduced this time, the US and Canada were close to reaching a new trade agreement, but negotiations finally broke down last Friday, after which the Trump administration quickly introduced a new round of tariff measures.

Today, Canada has chosen to implement countermeasures based on roughly the same trade amount, which means that trade frictions between the two sides have further escalated and begun to spread from traditional trade disputes such as steel, aluminum, and automobiles to a wider range of products such as consumer electronics, clothing, furniture, food, and industrial equipment.

Overall, Canada's current retaliatory tariffs of about 20 billion US dollars are basically in line with the scale of the new US tariffs, while providing a buffer for the domestic industry through the 7.5 billion Canadian dollar corporate aid program.

With the new tariff plan coming into effect on September 8, the trade dispute between the US and Canada is shifting from the negotiation phase, which had continued for several weeks, to direct tariff confrontation. Whether the two sides can return to the negotiation table in the future and whether tariff measures are further expanded will be important factors affecting the Canadian manufacturing industry, cross-border supply chain, and North American trade prospects.