Canada retaliates with new tariffs as Trump escalates trade fight

Canada has imposed new tariffs targeting roughly $20 billion worth of US imports, marking the latest escalation in an increasingly costly trade dispute between the two longtime allies, The New York Times reports.

The duties cover a range of US products, including clothing, cheese, metal parts and wood products. Ottawa’s measures are designed to mirror tariffs imposed by US President Donald Trump after trade negotiations between the two countries collapsed last month.

The immediate economic impact is expected to remain limited, as the new tariffs affect only a relatively small share of annual US-Canada trade. However, officials and business groups have warned that further retaliation could trigger a cycle of increasingly broad tariffs, raising costs for consumers and businesses on both sides of the border.

Canadian Prime Minister Mark Carney has sought to portray his government as a counterweight to Trump’s trade policies, describing the situation as “at war.” Canadian officials have generally pledged to respond “dollar for dollar” to US tariffs.

Trump, meanwhile, has repeatedly criticized Canadian officials and questioned the size of the country’s economy and military. He has threatened additional tariffs on Canadian auto imports and, last week, suggested he could seek to halt bilateral trade altogether.

Hours before Canada’s latest tariffs took effect, Trump renewed his criticism on social media, singling out Canadian aircraft manufacturer Bombardier and declaring there would be “NO MORE SELLING BOMBARDIER IN THE UNITED STATES!”

He also accused Canada of blocking “our GREAT American Banks, and Companies” and urged US consumers to avoid Canadian products.

“BUY AMERICAN. FLY ON AMERICAN AIRLINERS. ENJOY AMERICAN LIQUOR AND BEVERAGES. SAIL ON LAKE AMERICA,” Trump wrote.

Brad Wood, senior director for trade and innovation at the National Foreign Trade Council, warned that the escalating measures would hurt businesses and consumers in both countries.

“This tit-for-tat retaliation is bad for Canadian businesses and consumers, and bad for American businesses and consumers,” Wood said.

“Every escalation is one more layer of barriers that ultimately Canada and the United States need to resolve,” he added.

The dispute comes as the Trump administration prepares additional tariffs targeting dozens of countries, while concerns mount that higher import costs could further fuel inflation in the United States.

By Vafa Guliyeva