Canada hits back at U.S. tariffs with $20 billion retaliation and support package

Canada has announced nearly $20 billion in retaliatory tariffs on U.S. goods and billions in support for workers and businesses, escalating its trade dispute with Washington after President Donald Trump's latest duties took effect.

Canada matches U.S. tariffs dollar for dollar

Ottawa said on Tuesday it would impose tariffs on $19.94 billion worth of U.S. goods, matching Washington's latest measures dollar for dollar and rate for rate.

The counter-tariffs will take effect on 8 September and cover more than 700 U.S. products, with rates of 15 per cent, 25 per cent and 50 per cent.

The highest 50 per cent tariffs will apply to products in sectors including steel, aluminium, furniture and clothing, while cheese, appliances and some seafood will face 25 per cent duties. Electronics and tools will be subject to tariffs of 15 per cent.

Canadian officials said the measures were designed to protect domestic industries and minimise the impact on Canadian consumers and businesses rather than generate revenue.

"Our dollar-for-dollar, rate-for-rate counter-tariffs, as well as a multibillion-dollar support package, will protect workers, farmers, families and businesses as we build a stronger, more resilient and more diversified Canadian economy," Finance Minister François-Philippe Champagne said in a statement.

Billions pledged to workers and businesses

The government also unveiled about $5.42 billion in new and expanded support for workers and businesses affected by the trade dispute, on top of nearly $18.1 billion in tariff-related assistance introduced over the previous 18 months.

Of the new funding, about $2.53 billion will go towards a rapid-response initiative for workers and employers, including extensions to employment insurance measures. Long-serving employees will be eligible for an additional 20 weeks of benefits until June 2027, while the one-week waiting period for employment insurance will be waived for another year.

Employers will also be eligible for up to $722 per employee to help cover training and administrative costs associated with work-sharing and retention programmes.

Another $1.45 billion will establish the Canada Strong Diversification Fund to support tariff-hit companies with investment-ready projects. Medium-sized businesses will have access to an additional $1.08 billion through Canada's regional development agencies.

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Small and medium-sized businesses facing cash-flow pressures will also receive additional liquidity support, while companies directly affected by the tariffs can access loans ranging from about $181,000 to $3.61 million.

Trade dispute deepens

Canada's response follows the introduction on Saturday of new U.S. tariffs after negotiations between Ottawa and Washington collapsed. Trump's measures include duties of up to 50 per cent on Canadian goods.

The latest tit-for-tat measures mark a new low in Canada-U.S. relations and deepen uncertainty for businesses and workers on both sides of the border.

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