Canada imposes retaliatory tariffs of up to 50% on US goods

Canada's government announced on Tuesday new retaliatory tariffs on goods originating from the United States, with rates ranging from 15 to 50 percent. The measures will take effect on September 8, a date previously flagged by Prime Minister Mark Carney in response to US President Donald Trump's decision to impose a 50 percent tariff on Canadian goods starting last Saturday.

Support for affected businesses

Alongside the tariff announcement, the Canadian government set up a 7.5-billion Canadian dollar (about 4.6 billion euro) support package to help businesses and workers hurt by the escalating trade conflict. The move follows the collapse of trade talks between the two countries last Friday, after which the steep US tariffs affected roughly 20 billion US dollars (17 billion euro) worth of Canadian exports, about 5.5 percent of the country's total exports to the US.

Which goods face the highest tariffs

US steel and aluminum products will be hit hardest, with tariffs rising from the current 25 percent to 50 percent starting September 8. A 25 percent tariff will apply to household appliances, dairy products, and certain steel and aluminum derivative goods. A smaller category of products, including electrical equipment and tools, will face a 15 percent tariff. Altogether, these categories make up about 7.3 percent of Canada's imports from the US.

Risk of further escalation

Analysts warn that both sides could keep ratcheting up measures against each other. On Monday, Trump threatened to double the tariff on Canadian-made cars starting next year, from the current 25 percent to 50 percent. On Tuesday, Trump also said he was considering renaming Lake Ontario, which lies on the border between the two countries, the "American Lake" — similar to his renaming of the Gulf of Mexico as the "Gulf of America" last year.