Canada has entered a new phase of its trade confrontation with the United States after retaliatory tariffs on billions of dollars worth of American imports came into effect.
The measures target approximately C$28 billion in US products, with some tariffs reaching 50 per cent, increasing pressure on companies operating within the two countries’ deeply integrated economies.
Among the products affected are steel, furniture and cotton clothing.
Canada initially included fresh fish and lobster in the tariff package but subsequently removed the products following concerns raised by its seafood industry.
Ottawa Seeks a Long-Term Agreement
Despite the escalation, Canadian authorities say they still want to reach a negotiated settlement with Washington.
Prime Minister Mark Carney said Canada was looking for a trade agreement that would be durable and beneficial to both countries.
Carney maintained that Ottawa was willing to return to the negotiating table once the US was prepared to do so.
The US position, however, suggests that negotiations remain far from restarting.
US Trade Representative Jamieson Greer said communication between the two sides had been limited since discussions collapsed in August. He argued that Washington had already offered Canada what it considered a favourable deal.
Greer also warned that further Canadian retaliation could trigger additional American measures against Canadian exports.
Bombardier Drawn Into Dispute
The dispute has also expanded beyond tariffs on goods.
President Donald Trump has threatened to stop US business with Canadian aircraft manufacturer Bombardier unless the company shifts some manufacturing activity to the United States.
The company is a significant part of Canada’s industrial economy, with a PwC report commissioned by Bombardier estimating that it generated more than C$7 billion in annual economic output for Canada in 2024.
Trump has separately criticised Canada’s exchange rate and used social media posts to intensify his broader political messaging about Canada and North America.
Why the Dispute Matters
The economic stakes are considerable.
Canada and the United States exchanged almost $900 billion worth of goods and services in 2025, making their bilateral trading relationship one of the largest in the world.
Any prolonged trade dispute therefore risks creating higher costs and uncertainty for companies that depend on cross-border supply chains.
Canadian businesses are already assessing how the new tariffs will affect imports, while American companies are preparing for the possibility of further Canadian measures.
The removal of seafood products from Canada’s tariff list also illustrates the difficult choices facing Ottawa. While the government wants to respond firmly to US trade policies, it must also consider the effect of retaliation on Canadian businesses and industries.
With negotiations still stalled, both governments now face increasing pressure to find a way back to the table before the dispute causes deeper economic disruption.
