OTTAWA-Canada plans to impose tariffs of up to 50% on roughly 700 American products in retaliation for new U.S. levies, Canadian officials said Tuesday, escalating tensions between two of the world's most closely integrated economies.
The Canadian tariffs were designed to protect domestic companies hit by a fresh set of hefty U.S. tariffs and to sting President Trump and his Republican Party as they head into a difficult midterm election in November, Canadian officials said. The new levies would go into effect Sept. 8, affecting about $20 billion worth of goods, or roughly 7% of total U.S. imports.
Analysts noted that the tariffs targeted products made in states with hotly contested congressional elections, including processed cheese from Wisconsin, seafood from Maine, and washers and dryers from Kentucky, where General Electric has a major operation.
Most of the tariffs are between 15% and 50%. U.S. steel and aluminum were already subject to a 25% tariff, but that will now double to 50%, officials said.
"We are being wise and strategic," said Industry Minister Melanie Joly at a news conference.
Canada imposed the tariffs after the U.S. slapped new import duties on $20 billion of Canadian goods over the weekend after trade talks collapsed, targeting hockey sticks, cement, paper, chemicals and a host of other products.
In a statement, the White House said that Canada "has been ripping off the U.S. for decades-and President Trump is done letting them get away with it." The statement said U.S. officials offered Canada the "most preferential market access" of any country globally, with deep cuts to tariffs on Canadian steel, aluminum, automobiles and lumber.
"Canada chose unreasonable demands, walkbacks, and flat-out rejection," the White House said.
In a Truth Social post Tuesday, Trump threatened to rename Lake Ontario, one of the Great Lakes, to Lake America. "I deal with many countries, and Canada is easily the most difficult and unreasonable," Trump said.
Canada is the U.S.'s second-largest trading partner by country, behind Mexico and ahead of China, making the escalating dispute particularly consequential for both economies.
Both the U.S. and Canada argue their counterpart demanded last-minute changes to the deal that were deemed unacceptable. The U.S. imposed the new tariff, it said, because of alleged Canadian mistreatment of U.S. automobiles, wines and spirits, and dairy products.
Eric Miller, head of Rideau Potomac Strategy Group, a Washington-based trade consulting firm, said the new tariffs affect products that Canadians can find substitutes for, whether domestically made or in the case of air conditioners and appliances, built in Mexico or China.
At the same time, the new levies put pressure on Trump by targeting "producers in states where there are hotly contested political races or are solidly Republican," Miller said.
Trade analysts pointed to the nearly 200 seafood items subject to duties as a sign of that political pressure in Maine, where Sen. Susan Collins, a Republican, faces re-election in November. Collins's office didn't immediately return a message seeking comment.
Other analysts warned the retaliatory measures carried real risks for the Canadian economy.
The tariffs could add 0.20 percentage points to Canadian inflation, which is already elevated at 3%, said Royce Mendes, an economist at Desjardins Capital Markets. At the same time, Canada's central bank is trying to manage an economy facing higher energy prices and the risk of a slowdown posed by the trade conflict.
Karl Schamotta, chief market strategist at global-payments firm Corpay, said the Canadian retaliation might backfire.
"An intensified trade war will hurt the country more than the U.S.," Schamotta said. "Countertariffs will not help. In Canada, just as in the U.S., they are effectively taxes on domestic consumption. They raise the cost of living while doing little to shift trade balances or improve overall economic welfare."
Barry Appleton, an international trade lawyer and a professor at New York Law School, said the affected U.S. products and differing tariff rates-either 15%, 25% or 50%-indicate a more precise approach than a broad dollar-for-dollar move. But the decision to target household items like cheese, cosmetics and toilet paper will have ramifications, he said.
"Canadian consumers will feel this one directly," he said, "not just Canadian manufacturers."
Joly said Canadians should buy domestically made products from grocery stores and other retail outlets. "That's what you can do, and that's how we can launch these movements of resistance given what is happening to us," she said.
Prime Minister Mark Carney said this week it became evident during negotiations that Trump was intent on destroying Canada's auto sector as well as its steel and aluminum industries. He said Canada could restart talks with Washington, but only on the condition that the U.S. comes "with the right attitude toward our industries."
He added, "An attitude at the negotiation table that Canada is a subsidiary of the United States, the Canadian industry is going to be disadvantaged relative to American industry...That's not something we're going to accept."