Canada Counter-Tariffs Double US Steel Levy, Hit 700 More Goods

Ottawa answers Washington rate for rate

Canada has hit back at the Trump administration's latest tariffs with one of the widest counter-tariff lists it has ever put together. The import taxes are aimed at goods that touch almost every corner of the Canadian economy, from American steel to live oysters. On August 25, Ottawa announced that it would start collecting surtaxes of 15%, 25% and 50% on hundreds of U.S. products beginning September 8, after trade talks in Washington collapsed and U.S. tariffs followed within days.13 The most important single change was doubling Canada's existing counter-tariff on most American steel and aluminum, from 25% to 50%.111

The trigger came on August 22. That day the Trump administration put 50% tariffs on about US$20 billion in Canadian goods, including furniture, clothing, cement, dairy and hockey equipment.2 Earlier U.S. measures had largely spared goods that complied with the continental free-trade agreement. This round applied to the selected products whether or not they qualified.2 To impose them, Washington used Section 338 of the Tariff Act of 1930, a Depression-era provision that had never been used before. It lets the president impose duties of up to 50% on countries found to discriminate against U.S. businesses.8

Prime Minister Mark Carney promised to respond "dollar for dollar." He also conceded openly that doing so would raise costs and narrow choices for Canadians.1 Finance Minister François-Philippe Champagne said each Canadian rate was set to match the American tariff on the same kind of Canadian good. He added that Canada's existing counter-tariffs on automobiles would stay in place.5

What is on the list

The list was built to mirror the U.S. one, and the overlap is clear. Many of the targeted American goods match the Canadian exports Washington hit, especially clothing, forestry products, tools and electronics such as smartphones.1 Ottawa also chose high-visibility consumer goods: dishwashers, washing machines, stoves, video game consoles, motorcycles, fishing rods and exercise equipment.13 Fish and seafood got particular attention. Live and frozen fish, crustaceans, oysters and mussels are all covered, along with cheese, honey, molasses, cosmetics, carpets, toilet paper and household appliances.3

The implementing orders, published September 7, sort goods into three tiers. Air conditioners, forklifts and harvesting machinery fall in the 15% tier. The 25% tier includes cheese, sawn lumber, toilet paper, refrigerators, dishwashers, railway locomotives and trailers. The 50% tier covers some dairy products such as milk and cream, plus sporting and exercise equipment.11 Retail-focused breakdowns place smartphones, golf clubs, wooden household furniture and plywood at 50%. Softwood lumber and kitchen cabinets sit at 25%.18 Energy products are not on the list. U.S. autos remain covered by a separate counter-tariff that predates this round.18

There are some relief valves. Goods that were already in transit on September 8 pay the old rates. Ottawa's remission framework can grant exceptions for goods tied to public health, medically necessary care, and Canadian manufacturing and food packaging.11 Customs brokers have stressed a further point: the surtax depends on where a product was made, not where it was shipped from. Goods are taxed only if they qualify as made in the USA and fall under an affected tariff classification.17

Where the numbers diverge

Coverage agrees on the structure of the response but disagrees on the figures. Some of that is a matter of measurement and some is not.

The headline value is the easier case. U.S. outlets put the retaliation at about $20 billion a year in American imports, the same as the Canadian exports hit by Washington.15 Canadian legal and consumer guides use CA$27.6 billion.1113 These figures appear to describe the same trade flow in two currencies rather than two different estimates. Either way, the claim of symmetry holds.

The product count varies far more. The Associated Press, The New York Times and The Washington Post reported about 700 targets.317 NBC News said the list had more than 800 entries.5 The Retail Council of Canada referred to 874 U.S. goods.16 A consumer guide checked against the revised August 26 Finance Canada schedule counted 629 tariff items, and a trade association summary said 600-plus.1820 The best explanation is that the list was revised after it was announced, and that people counted different things: raw entries, distinct tariff codes or broader product lines. Wood charcoal, for example, was added on August 26.18 For importers, the figure that matters is the official schedule, not any single headline number.

Two stories about why talks failed

The two governments give sharply different accounts of how the talks ended. Carney said he walked away late on a Friday after Washington put forward "unfair" and "uneconomic" last-minute terms, and that Canada could neither accept the U.S. offer nor give what was demanded.5 He has gone further, accusing Washington of trying to subordinate Canada. He also said U.S. demands showed an intention to "destroy our major industries."3

U.S. Trade Representative Jamieson Greer says the opposite. In his account, Washington offered to halve tariffs on steel and aluminum and to cut them sharply on autos and softwood lumber, and Canada "simply wanted more."5 Later reporting adds that Ottawa had been willing to drop its remaining retaliatory tariffs on selected strategic industries in exchange for major U.S. cuts. Carney still judged that some concessions would cost too much in sovereignty.2

Outside observers have not settled which account is right. The detail that stands out is that Canada was apparently ready to give up some of its own leverage and still left the table. That suggests the deal-breakers went beyond tariff rates into what one ally described as cultural and sovereignty questions.2

Escalation did not stop at September 8

Canada matched U.S. rates instead of exceeding them, which looked like an attempt to show resolve without inviting another round. Washington escalated anyway. Within hours of the Canadian measures taking effect, the U.S. released new proclamations that changed the scope of its 50% tariff lists.20 It then announced outright Section 338 import bans on some Canadian goods from September 29.1220 Ottawa's export guidance lists motorcycles, alcoholic beverages, dairy ingredients and whey products, molasses and sugar-processing products, and non-alcoholic beer among the banned goods. All of them were already subject to the 50% tariff.12

Other threats remain open. Trump has said tariffs on Canadian cars, trucks, auto parts and steel will rise to 50% from January 1, 2027, up from the 25% auto tariff that applies now.8 Carney warned that this would gradually take apart Canadian auto production.3 Ontario Premier Doug Ford has said his province is ready to cut off electricity and critical minerals to the United States if things get worse.3 Former Prime Minister Jean Chrétien has suggested export taxes on oil, gas, electricity and potash.15

As of early October, neither side had moved. On October 8, Greer said the administration was holding its position while staying open to talks.2

Who pays

Canadian officials have not tried to hide that counter-tariffs cost Canadians too. The surtax is paid at the border by the importer of record, usually a retailer or distributor, and shows up as higher shelf prices over weeks rather than as a line on a receipt.13 The pass-through is less than a full 25% or 50% because the levy applies to the customs value, before shipping, warehousing, markups and sales tax are added.18 Canadian manufacturers that buy U.S. steel, lumber, paper or packaging will also see higher input costs, even though their own finished goods are never taxed.13

The Retail Council of Canada supported the response but warned that its members will carry a large share of the burden at a time when consumers are already stretched.16 Ottawa has announced CA$7.5 billion in support for affected workers and businesses, on top of more than CA$25 billion in earlier tariff aid.15

The trade data so far are hard to read. Canada's surplus with the United States widened in August. That most likely reflects exporters rushing shipments ahead of the new duties rather than any real strength.19

The bigger picture

This round reverses a policy Ottawa adopted only a year ago. Effective September 1, 2025, Canada dropped counter-tariffs on all U.S. goods other than steel, aluminum and autos, in an attempt to calm the dispute.16 The new schedule goes back to broad retaliation, and it now sits on top of an uncertain trade agreement: Washington declined on July 1 to renew the USMCA in its current form, which triggers annual reviews instead of automatic extension.19

The dollar-for-dollar approach is tightly calibrated. The goal appears to be avoiding being seen as the side that escalates, while Canada looks for other partners. France has praised Carney's stance and is pressing for closer cooperation ahead of a Canada–EU summit in Montréal.2 Admiration does not replace access to the U.S. market, though, and nothing yet suggests that matching tariffs has changed Washington's thinking. So far, each side has treated the other's calibrated response as a reason to escalate.