Trump Administration Weighs More Tariffs After Canada’s Retaliation

The US is considering further trade measures against Canada after Prime Minister Mark Carney announced retaliatory tariffs matching the value of new American duties, escalating an already tense relationship between the two countries.

According to a report by Bloomberg citing a White House official, the administration was examining additional tariffs and other trade actions in response to Canada’s latest measures. The official said an administration response was expected.

President Donald Trump has already threatened to raise tariffs on Canadian automobiles to 50% and impose duties on auto parts from January 1. The latest escalation follows the collapse of trade discussions between Trump and Carney late last week.

The US subsequently imposed 50% tariffs on around $20 billion worth of Canadian goods under Section 338 of the 1930 Tariff Act, a provision that had not previously been used.

Canada announces matching counter-tariffs

Canada responded by announcing 50% tariffs on US steel and aluminium, along with duties on American milk, furniture, clothing, video-game consoles, smartphones and other electronic products.

The measures, scheduled to begin on September 8, will cover approximately $20 billion of annual US exports to Canada.

The move represents a major shift in Carney’s strategy. Unlike his predecessor Justin Trudeau, who quickly introduced broad counter-tariffs during the earlier trade dispute, Carney had previously removed several retaliatory measures and made concessions in an effort to improve relations with Washington.

The latest Canadian tariffs could disproportionately affect exports from Ohio, Illinois, Pennsylvania, Michigan and California.

This could create a political challenge for Trump and Republicans, particularly in Michigan and Pennsylvania, where Democrats are seeking gains in the upcoming midterm elections.

The escalating dispute also risks increasing costs for businesses and consumers on both sides of the border, while further straining one of the world's most integrated trading relationships.