Canada Threatens 25% Retaliatory Tariffs on U.S. Goods
Prime Minister Justin Trudeau announced on Monday that Canada would impose 25% tariffs on C$155 billion ($107 billion) worth of U.S. goods, set to take effect on Tuesday. This move is a response to President Donald Trump’s administration’s proposed tariffs on Canadian goods.
In a statement, Trudeau stated that Canada would implement the tariffs on the remaining C$125 billion starting Tuesday, and these would remain in place for 21 days. “Our tariffs will remain in place until the U.S. trade action is withdrawn,” Trudeau added. If the U.S. tariffs do not cease, Canada is exploring other non-tariff measures in coordination with provinces and territories.
The first round of retaliation includes 1,256 products, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. Among the major imported products affected are cosmetics and body care products worth C$3.5 billion, appliances and household items worth C$3.4 billion, pulp and paper worth C$3 billion, and plastic products worth C$1.8 billion.
Trudeau expressed concern over the disruption this would cause in an “incredibly successful trading relationship” between the two countries, warning that it would violate the US-Mexico-Canada free trade agreement (USMCA) signed by Trump during his first term.
Meanwhile, Mexico’s President, Claudia Sheinbaum, was expected to announce her response to the tariffs on Tuesday morning, according to the country’s economy ministry.
Since winning the November presidential election, Trump has targeted China, Canada, and Mexico, threatening steep duties unless they reduce the levels of illegal drugs crossing into the U.S. While he imposed a 10% tariff on China last month, tariffs on Canada and Mexico have been repeatedly delayed.
Economists have warned that these trade measures could significantly impact U.S. consumers. According to the Peterson Institute for International Economics, a 25% tariff on Canada and Mexico, alongside a 10% levy on China, would be “the largest tax increase in at least a generation,” costing the average U.S. household over $1,200 annually.
Trump has also vowed to introduce “reciprocal” tariffs on countries that have duties on U.S. goods.
