Canada has announced retaliatory tariffs against the US, marking the start of a potential trade war between the neighbouring countries.
Prime Minister Justin Trudeau introduced "far-reaching" tariffs of 25%, targeting $106.6 billion (£86bn) worth of American goods, including items such as beer, wine, household appliances, and sporting goods, reports BBC.
This action mirrors US President Donald Trump's 25% tariff on Canadian and Mexican imports, as well as an additional 10% levy on China, citing concerns over illegal immigration and drug trafficking.
Trudeau emphasised that he would not "back down in standing up for Canadians," while acknowledging the serious consequences the tariffs could have on both sides of the border.
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"We don't want to be here, we didn't ask for this," he said at a late Saturday news conference.
The Canadian Prime Minister added that tariffs on 30 billion worth of US goods will come into effect on Tuesday, with another 125 billion in tariffs set to be imposed within 21 days to allow Canadian businesses time to adjust.
The retaliatory tariffs will target a range of American products, including beer, wine, bourbon, fruits, fruit juices, vegetables, perfumes, clothing, shoes, household appliances, sporting goods, and furniture. Lumber and plastics will also face levies, with additional non-tariff measures under consideration, particularly concerning critical minerals and procurement.
Economists have warned that the tariffs imposed by the US, along with Canada’s response and similar actions from Mexico and China, could result in price increases across a broad range of products for consumers. A tariff is a domestic tax levied on imported goods, proportional to the value of the imports.
The introduction of higher tariffs by the US has raised concerns among global leaders, as it could make it more expensive for companies to sell goods in the world’s largest economy.
Christopher Sands, director of the Wilson Center's Canada Institute, said that the back-and-forth tariffs between the US and Canada represent "mutually assured destruction," with swift impacts on people's lives.
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Sands stressed that there would be no adjustment time, as proposed by US Treasury Secretary Scott Bessent, but rather "a massive hit that's going to make a lot of people's lives a lot tougher, very quickly."
Despite these consequences, tariffs remain a central part of US President Donald Trump's economic agenda. He sees them as a means to boost the US economy, protect jobs, increase tax revenue, and push for policy action.
Canada, Mexico, and the US share deeply integrated economies, with an estimated $2 billion worth of manufactured goods crossing the border daily.
Canada is also America’s largest foreign supplier of crude oil, accounting for 61% of the US's oil imports between January and November of the previous year. While the 25% tariff applies to most Canadian goods, energy imports, including oil, face a lower 10% levy.