Canada hits back with counter-tariffs on 700 U.S. goods worth $28B

Canada is responding to U.S. President Donald Trump’s repeated trade war escalations with counter-tariffs against more than 700 American goods amounting to $27.6 billion and rolling out supports for workers affected by the trade war, the federal government said on Tuesday.

“We’ll be smart and we’ll be strategic and we’ll fight for every one of these jobs,” Industry Minister Melanie Joly said.

The value of American goods being tariffed is roughly equal to the value of Canadian goods that fall under the scope of Trump’s sweeping 50 per cent tariffs on Canada.

This was done to ensure that “Canada will match the quantum of U.S. Section 338 tariffs dollar-for-dollar,” senior government officials said.

These will be “dollar-for-dollar, rate for rate counter-tariffs,” Finance Minister Francois-Phillipe Champagne said.

Prime Minister Mark Carney met with opposition leaders on Tuesday to discuss “the government’s response to the unjustified U.S. tariffs, including the new measures to support Canadian workers, families, and businesses,” his office said.

Conservative Leader Pierre Polievre called on Carney to recall Parliament and “release the text of the rejected agreement.”

The Canadian countermeasures will go into effect after the Labour Day long weekend, on Tuesday, Sept. 8.

Joly urged people to buy Canadian products.

“When you choose a Canadian product, you’re not only putting pressure on the U.S., right now you’re protecting jobs,” she said.

Joly said she has been in touch with executives at Ford, Honda and Toyota to discuss the impact of Trump’s threat to double auto tariffs on Canada next year.

“The threat to the auto industry is real,” Joly said.

The White House issued a statement on Tuesday, echoing Trump’s sentiment that “Canada has been ripping off the United States.”

“Last week, the U.S. offered Canada the most preferential market access of any country on Earth, with deep cuts on steel, aluminum, autos, lumber, and more. Instead of partnership, Canada chose unreasonable demands, walk-backs, and flat-out rejection,” the White House said in a statement.

1:55 How will the trade war affect Canadian consumers, companies?

The “vast majority” of the products targeted in the counter-tariffs were carefully chosen because they can be substituted by an alternative Canadian product, Champagne said when asked if the measures will have an impact on consumers.

The Canadian tariffs will be set at three different rates – 15 per cent, 25 per cent and 50 per cent – to match Trump’s own tariffs on Canadian goods.

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Most steel and aluminum products, furniture, clothing and apparel from the U.S. will be subject to a 50 per cent tariff, while dairy products such as cheese along with fish, seafood, and certain steel and aluminum derivative products facing a 25 per cent tariff.

Canada’s existing counter-tariffs on U.S. autos will remain in place.

Canada currently faces three different sets of American tariffs. These are the 50 per cent tariffs (Section 338) on a wide range of goods amounting to around $28 billion that Trump imposed on the weekend, sectoral tariffs (Section 232) on steel, aluminum, automobiles and softwood lumber that were imposed last year, as well as 10 per cent tariffs (section 301) owing to a U.S. forced labour investigation that hit earlier this year.

2:22 Trump threatens new auto tariffs after Carney vows to retaliate

Canada is also launching a $7.5 billion relief package for workers and businesses affected by Trump’s trade war, with a focus on supporting small and medium enterprises.

This includes an additional $1.5 billion through the Regional Tariff Response Initiative.

These supports will be provided in coordination between the Business Development Bank of Canada and regional development agencies.

BDC is also expanding its “pivot to grow” program, helping businesses access financing starting at $250,000 to “help them manage liquidity pressures” through a $500 million liquidity stream, officials said.

The government also announced the creation of a Canada Strong Diversification Fund, which will get an injection of $2 billion to help tariff-affected businesses pivot to “shovel-ready projects” within Canada.

The Strategic Response Fund, which was launched in September 2025 to support workers and businesses displaced by tariffs, will also provide additional support.

The Large Enterprise Tariff Loan, which was launched in March 2025, provides financing for large Canadian businesses affected by U.S. tariffs. Currently, the program covers a liquidity shortfall of 24 months for large enterprises, which will be extended to 36 months to face the uncertainty of a long-haul trade war.

The maximum term of the loan will be extended from 10 to 15 years.

The government also launched a $3.5 billion suite of programs to support workers and employers, including changes to the Work Sharing Program and Worker Retention Grant to “help businesses prevent layoffs while helping more employees upscale or retrain,” officials said.

Under Canada’s Work Sharing Program, employers can allow workers to reduce work hours and become eligible for Employment Insurance benefits for those missing hours. The duration of work sharing agreements will be increased from the current maximum of 78 weeks to 152 weeks.

The Worker Retention Grant, which is in effect until March 2027, enables employers to provide an additional allowance to workers who participate in training during their non-work sharing hours.

Senior government officials said this grant will be “enhanced.”

The two programs will effectively become “a single, streamlined program designed to be more accessible and generous” and employers will be eligible for additional funds of $1,000 per participants to “cover training and administrative costs.”

The government is also extending special measures to the EI program, including waiving the one-week waiting period before workers are eligible to receive EI.

Previously, workers would only start receiving EI payments once they used up their severance or vacation pay. The government is extending special measures that would see workers access EI payments without having used severance or vacation pay.

A special EI measure that provides an extra 20 weeks of EI benefits for long-tenured workers will also be extended. This is because long-tenured workers, who have long years of experience in a particular industry, may find it difficult to transition to a new job or sector quickly, officials said.

1:28 Carney says Canada ‘could not accept what the U.S. had offered’

Speed is of the essence when it comes to rolling out support to struggling businesses, the Canadian Chamber of Commerce said.

“Government is now moving at the speed of business to address the current trade negotiation collapse. If the government did not prioritize speed, some businesses would not still be there by the time support rolls out,” said Candace Laing, president and CEO of the Canadian Chamber of Commerce.

The Forest Products Association of Canada said it is still reviewing the details of the measures but welcomed the “early outreach” from government to businesses.

“We appreciate the government’s quick action to address the serious pressures facing Canadian industries and impacted families,” said Derek Nighbor, the group’s president and CEO.

While supports for affected businesses are good news, retaliatory tariffs could also increase input costs for many Canadian businesses, Canadian Manufacturers and Exporters warned.

“Canada has every right to respond to unjustified U.S. tariffs. However, counter-tariffs can also increase costs for Canadian manufacturers that depend on U.S. inputs, particularly small manufacturers with limited ability to change their supply chains,” said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.