Canada is striking back at sweeping U.S. tariffs with a new round of countermeasures covering $27.6 billion in American imports, while unveiling a $7.5 billion support package aimed at shielding Canadian workers and businesses from the escalating trade conflict.
The move follows the U.S. decision to impose a 50 per cent tariff on $27.6 billion of Canadian goods, effective August 22.
Finance and National Revenue Minister François-Philippe Champagne said Canada had negotiated with Washington in good faith but rejected what it viewed as unacceptable terms.
“In recent days, however, the U.S. proposed new terms that were not in Canada’s best interest, basically, asking too much of Canada, and offering too little in return.”
Canada subsequently suspended negotiations, saying it would not accept an agreement that undermined Canadian workers, businesses or strategic industries.
The government said the new measures are designed to restore a level playing field for Canadian producers and defend industries hit hardest by U.S. tariffs.
Beginning September 8, Canada will impose counter-tariffs of 15 per cent, 25 per cent and 50 per cent on selected U.S. products covered by American Section 338 and Section 232 tariffs.
The Canadian rates will match the corresponding U.S. tariff rates.
The measures will target sectors including steel, dairy, appliances, agricultural equipment, pulp and paper, and electronics.
Canada said the primary goal is to protect domestic workers, farmers, manufacturers and businesses from the competitive impact of U.S. products entering the Canadian market.
Products facing the new 50 per cent counter-tariff include steel and aluminum products that were previously subject to a 25 per cent Canadian counter-tariff, as well as furniture and clothing and apparel.
A 25 per cent counter-tariff will apply to products including appliances, dairy goods such as cheese, and certain steel and aluminum derivative products.
Existing Canadian counter-tariffs, including those on automobiles, will remain in place.
Alongside the tariff response, Ottawa announced $7.5 billion in new and enhanced measures to help businesses maintain operations, protect jobs and manage cash-flow pressures.
The package builds on nearly $25 billion in support previously provided since the implementation of what Canada calls unjustified U.S. tariffs.
Key measures include:
$1.5 billion in additional funding through the Regional Tariff Response Initiative to help small and medium-sized businesses, including with liquidity pressures.
$500 million in new liquidity support through the Business Development Bank of Canada’s Pivot to Grow program, alongside targeted assistance for the forestry, steel and aluminum sectors.
Broader access to tariff-related Business Development Bank of Canada programs by reducing the minimum revenue requirement for applicants to $1 million.
$2 billion in additional funding through the new Canada Strong Diversification Fund for tariff-affected businesses and shovel-ready projects supporting ongoing capital maintenance.
$3.5 billion in Rapid Response Supports for Workers and Employers, including temporary Employment Insurance flexibilities, workplace training and enhancements to Job Bank.
A new Worker Retention and Retraining Program to help employers keep workers during the disruption.
New flexibilities for the Large Enterprise Tariff Loan facility, administered by the Canada Enterprise Emergency Funding Corporation.
The government said it will continue reviewing programs and policies and could expand existing support to additional sectors affected by the tariffs.
The latest measures mark a significant escalation in Ottawa’s response to Washington’s trade actions, combining dollar-for-dollar retaliation with billions of dollars in domestic support as uncertainty and volatility mount across the Canadian economy.
