US-Canada tariffs: Canada braces for prolonged trade war as counter-tariffs on US take effect

Canada’s retaliatory tariffs on a range of US goods came into effect on Tuesday, with no sign of a trade deal on the horizon.

The counter-tariffs will apply to nearly C$28bn ($20bn; £15bn) worth of American products, from steel to furniture to cotton T-shirts, and will be as high as 50%.

Fresh fish and lobster were also on the list, but Canada later omitted them after pushback from its seafood industry – a sign of the tricky balance it has to strike as it retaliates against its largest trading partner.

Both US and Canadian officials have said they would like to strike a deal, but no movement has been made to resume talks after they collapsed in late August.

Speaking to reporters last week, Prime Minister Mark Carney said that Canada is still in search of a deal with the US that is “durable” and in the best interests of both countries.

“We’re ready to sit down and and strike that deal when the Americans are ready,” Carney said.

US trade representative Jamieson Greer, meanwhile, said on Thursday that the ball is in Canada’s court.

“We offered them the best deal, they looked at it square in the face and turned around,” Greer said in an interview with Fox News, adding that there has been sparse communication with the Canadians since talks collapsed.

In a separate interview with Canadian broadcaster CBC, Greer cautioned against retaliation and suggested the US might hit back by banning the import of some Canadian products.

President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south.

The company is one of the largest in the country, contributing over C$7bn to Canada’s annual GDP in 2024, according to a report commissioned by Bombarier by public accounting firm PwC.