Canada has imposed retaliatory tariffs on US goods worth nearly C$28bn ($20bn; £15bn) as of Tuesday, in response to the ongoing trade tensions between the two countries. The counter-tariffs, which range from 15% to 50%, affect hundreds of American products, including steel, furniture, and clothing. Despite both sides expressing a desire for a deal, US Trade Representative Jamieson Greer suggests that Canada is responsible for the stalled negotiations, while Canadian Prime Minister Mark Carney has stated that any agreement must be "durable" and in both countries' interests. The tariffs are part of the largest bilateral trading relationship in the world, valued at nearly $900bn in 2025.
Written by the local model on 2026-09-08,
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same event (that is the story summary below).
Story summary
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The Republican Party is holding a midterm convention in Dallas, Texas, which will feature keynote addresses by President Donald Trump and Vice President Pence. This type of event is typically reserved for presidential election years, but Republicans hope it will energize their base ahead of the midterms. The convention will focus on key issues such as border security, economic growth, and American values.
Meanwhile, tensions between the US and Canada are escalating over trade. The Canadian government has announced that it will impose retaliatory tariffs on US goods worth $27.6 billion, in response to the latest round of tariffs imposed by President Trump's administration. This move is expected to have significant economic consequences for both countries, including higher prices for consumers and potential disruptions to supply chains.
In related news, the Canadian government is considering using energy exports as leverage in the trade dispute with the US. However, experts warn that this approach could backfire and harm Canada's domestic oil industry. Some are also questioning whether Prime Minister Mark Carney has the constitutional authority to block or tax Alberta's oil exports to the US.
The US Justice Department has reportedly ordered its antitrust division to pause all work with the Canadian government as trade tensions intensify. However, the DOJ disputes this report and says that no such directive was given. The controversy may be an indication of how far the trade dispute between the two countries has escalated.
Additionally, the economic impact of counter-tariffs is expected to hit not just consumers but also businesses that rely on imported goods, including semi-trailers built in the US that are used to haul goods into and around Canada.
Written for “US-Canada Trade War Escalation” on 2026-09-08,
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- Published
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.
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tariffs → publish → 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%.
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tariffs → apply → shirts
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.
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it → omit → 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.
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they → say → 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.
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that → speak → countries
"We're ready to sit down and strike that deal when the Americans are ready," Carney said.
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Carney → sit → deal
US trade representative Jamieson Greer said on Thursday the ball is in Canada's court.
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ball → say → 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.
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talks → offer → Canadians
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.
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US → caution → products
President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south.
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it → threaten → manufacturing
The aerospace giant is one of the largest in the country, contributing over C$7bn to Canada's annual GDP in 2024, according to a report by accounting firm PwC.
Trump took aim at Canada in a series of other Truth Social posts over the weekend, including one that called Canada's exchange rate with the US "unacceptable".
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that → contribute → US
Another post showed a map of North America - including Canada and Mexico - and Greenland all overlaid with the US flag.
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post → show → flag
Canada and the US have the world's largest bilateral trading relationship valued at nearly $900bn in 2025.
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Canada → have → 2025
With new US tariffs and Canadian counter-tariffs now in effect, businesses on both side are scrambling to deal with what comes next.
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what → scramble → side
The US currently has in place a 25% tax on Canadian cars and trucks, as well as taxes on Canadian steel, aluminium and lumber.
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US → have → steel
In late August, President Donald Trump imposed new 50% tariffs on other goods like dairy, alcohol, hockey sticks and perfume.
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Trump → impose → dairy
Canada's counter-tariffs, which were described by Carney as "dollar-for-dollar" and range from 15% to 50%, will from Tuesday be applied to hundreds of items coming in from the US.
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which → describe → US
Products like American milk, golf clubs, steel, aluminium and certain clothing like jackets and T-shirts will face 50% tariffs.
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Products → face → tariffs
Cheese, toilet paper and certain household appliances like air conditioners will face 25% tariffs, while fork-lift trucks and industrial moulds will be hit with 15% tariffs.
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trucks → face → tariffs
These levies are in addition to existing retaliatory taxes Canada had placed on finished American cars and trucks that are non-compliant with a free trade agreement between Canada, the US and Mexico, known as the USMCA in the US and CUSMA in Canada.
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that → exist → Canada
Polls suggest the majority of Canadians support, external their country imposing retaliatory tariffs on the US.
But economists warn that the latest counter-tariffs will raise prices for consumers, external on everyday goods like clothing, food and furniture.
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tariffs → suggest → clothing
The Canadian Chamber of Commerce has also urged the Carney government to take a surgical approach to retaliation.
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Chamber → urge → retaliation
"Businesses understand retaliation but don't want to see endless escalation," said the Chamber's CEO and President Candace Laing in a statement to the BBC on Friday, though she added that businesses "are preparing for this trade dispute to last".
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dispute → understand → Friday
Pushback from the fisheries industry was enough for Canada to alter its counter-tariffs by removing dozens of seafood items to avoid unintended consequences to its own economy.
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Canada → alter → economy
The lobster industry in both Canada and the US are heavily dependent on the other, with American-caught lobster often sent north to be processed before it is shipped back to the US and sold.
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it → catch → US
Ahead of the latest tariffs, Canada's economy had shown signs of resliency.
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economy → show → resliency
Its GDP grew 3.3% in the second quarter and it had gained 181,000 jobs from April to July.
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it → grow → July
But around 41,000 jobs were lost in August, a period that coincided with the new US tariffs on Canada and the collapse in trade talks.
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that → lose → talks
One sector that saw a modest bump was manufacturing - a gain the Canadian government attributes to consumers and businesses buying more made-in-Canada products.
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consumers → see → products
Carney has said he wants to diversify Canada's trade away from the US.
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he → say → US
July figures show the share of US-bound Canadian exports dropped to 66% from an average of 75% before the trade war.
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share → show → war
