Canada to place retaliatory 25 per cent tariffs on $155 billion in U.S. goods

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Canada will impose 25 per cent tariffs on U.S. goods ranging from orange juice to household appliances to plastics in retaliation for duties on Canadian imports announced Saturday by the United States.

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Prime Minster Justin Trudeau revealed the retaliatory measures late Saturday evening, after U.S. President Donald Trump signed executive orders imposing a 25 per cent levy on all Canadian goods and 10 per cent on Canadian energy.

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Both U.S. tariffs are set to take effect at 12:01 a.m. Tuesday morning.

The U.S. is placing a similar 25 per cent duty on Mexican goods while a 10 per cent tariff is being applied to Chinese imports.

Trudeau said Canada’s retaliatory tariffs would be introduced in two phases. On Tuesday, $30 billion worth of goods will be hit, with an additional $125 billion in 21 days to give Canadian businesses an opportunity to find alternatives.

Trudeau added that Canada was also considering non-tariff measures related to critical minerals and energy procurement.

Trump tied the U.S.-imposed tariffs to border issues in a post on social media.

“Today, I have implemented a 25 per cent tariff on imports from Mexico and Canada (10 per cent on Canadian energy), and a 10 per cent additional tariff on China,” he wrote. “This was done through the International Emergency Economic Powers Act (IEEPA) because of the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl.”

The IEEPA authorizes the president to regulate imports during a national emergency under the National Emergencies Act. The White House’s rationale is the flow of fentanyl and illegal immigration crossing the Mexican and Canadian borders meets that threshold.

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“President Trump is taking bold action to hold Mexico, Canada and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country,” a fact sheet released by the White House said. “Tariffs are a powerful, proven source of leverage for protecting the national interest.”

The tariff will remain in place until the fentanyl and illegal immigration issues are solved, according to the fact sheet.

Trudeau met with cabinet members and premiers Saturday afternoon to discuss the tariffs and Canada’s response.

The U.S. executive orders include a retaliation clause that gives the president the leeway to expand the scope of the tariffs if Canada responds in kind, but it was not clear how the U.S. planned to respond to Trudeau’s announcement.

Earlier this week, the Bank of Canada said a protracted trade war with 25 per cent tariffs would lead to a recession, shrinking Canada’s economy by as much as three per cent. Nearly $3.6 billion of Canada-U.S trade crosses the border every day, amounting to a $1.3 trillion trading relationship annually.

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“The 25 per cent tariffs on Canadian products, announced by President Trump, are deeply disappointing and will hit small businesses hard on both sides of the border,” said Canadian Federation of Independent Business president Dan Kelly, in a statement. “It shouldn’t have come to this.”

The Canadian Chamber of Commerce, meanwhile, said Trump’s decision “makes no sense” given the close integration of U.S. and Canadian supply chains.

“They are integrated not simply because we get along as neighbours, but because it makes sense financially for businesses and consumers on both sides of the border,” said CCC president and chief executive Candace Laing. “Which is why if President Trump truly wanted to bring down costs for Americans, he would be looking at strengthening our trade ties, not tearing them apart.”

Nearly 2.3 million jobs in Canada depend on exports to the United States, while 1.4 million American jobs are tied to exports to Canada, according to the CCC.

United Steelworkers International (USW), the largest private sector union in North America, called on Trump to reverse course.

“The USW has long called for systemic reform of our broken trade system, but lashing out at key allies like Canada is not the way forward,” said USW president David McCall, in a statement. “These tariffs don’t just hurt Canada. They threaten the stability of industries on both sides of the border.”

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