Canada's retaliatory tariffs take effect as US trade talks stall

Canada's retaliatory tariffs take effect as US trade discussions stall.

Key points

• Just 20pc of Americans approved of Trump's tariffs on Canadian goods, a Reuters/Ipsos poll discovered.
• As Canada wages a trade war against an economy 13 times its size, reservations concerning the USMCA's future have fuelled uncertainty regarding investment and expansion.
• Polls show Carney has broad backing from Canadians, but it could disappear within months as the consequences of the trade war sink in, according to political analysts.
• The rising tensions create uncertainty regarding the broader US-Mexico-Canada free trade agreement.
• "But at the same time, we totally understand that the prime minister needs to find areas of leverage, " Harvey remarked.

Canada's retaliatory tariffs take effect as US trade discussions stall. AFP Published September 8, 2026 Updated September 8, 2026 10: 03am. Join our Whatsapp Channel. Add Dawn as a trusted source.

Canada's retaliatory tariffs on US goods took effect just after midnight on Tuesday as Prime Minister Mark Carney rose economic pressure on his country's biggest trading partner after negotiations collapsed last month, intensifying an 18-month-old trade war.

In practice, the counter-tariffs cover $20 billion of US goods, with duties ranging from 15 per cent to 50pc throughout products from steel and furniture to clothing and electronics.

In practice, the dollar-for-dollar retaliation marks an escalation in the dispute between the neighbouring countries, and US and Canadian authorities have traded blame for scuttling a agreement that seemed close to fruition two weeks ago.

In practice, the rising tensions create uncertainty regarding the broader US-Mexico-Canada free trade agreement. It is up for annual reviews after US President Donald Trump declined to extend it for another decade.

"What we are worried about is an escalatory spiral, " remarked Michael Harvey, executive director of the Canadian Agri-Food Trade Alliance and a member of Carney's advisory committee on bilateral US economic relations.

"But at the same time, we totally understand that the prime minister needs to find areas of leverage, " Harvey remarked. US tariffs hit Canadian wine, furniture, dairy.

Trump's tariffs implemented last month hit sectors including wine, furniture, dairy products, cement, clothing, fishing rods and hockey equipment, covering $20 billion, or 5pc, of Canadian exports to the US.

According to Canadian and US administration data, Canada has shipped almost 68pc of total exports to the US this year, out of which roughly 80pc moved duty-free due to exemptions under the USMCA pact. Protections under the agreement have provided the domestic economy some resilience.

In practice, the new tariffs, imposed under a Depression-era US law, do not allow Ottawa to exercise USMCA exemptions.

Carney remarked last week his administration was ready to sign a trade accord that benefits both countries.

Trump threatened last month to raise US tariffs on all cars, trucks and automotive parts from Canada to 50pc starting January 1, and signed an executive order renaming Lake Ontario as Lake America.

Meanwhile, a administration source stated there are at present no negotiations between the two sides among ministers or administration office-holders.

"The Canadian government needs to keep channels open to the United States and not go overboard in terms of rhetoric and reacting to the rhetoric from the American side, while waiting for the American decision-making process to come back to economics, " Harvey remarked.

For now, canada' s retaliatory tariffs take effect as US trade talks stall remains the part of the story worth watching, and further updates are likely as more details are confirmed.