Canada Eyes Retaliatory Tariffs as Trade Fight with US Escalates

Canada's Minister of Intergovernmental Affairs, Dominic LeBlanc, hinted that his government might announce retaliatory tariffs on the US as early as Tuesday. This move comes after President Donald Trump threatened to raise US tariffs on all cars and trucks from Canada to 50% starting January 1, 2027.

The proposed tariffs were part of a trade deal between the two countries that collapsed last week over disagreements on various points, including whether the US tariff relief would apply to medium- or heavy-duty trucks. The agreement would have lowered the top-line tariff rate on Canadian cars and light-duty trucks from 25% to 15% and reduced tariffs on aluminum and steel from 50% to 25%. However, Trump's latest threat escalates a trade fight that has already affected auto stocks.

LeBlanc stated that his government's intention was to announce retaliatory measures 'it shouldn't surprise anybody.' He added that the Canadian administration had warned the US that they would take steps to protect their economy if no deal was reached. The minister emphasized that Canada's preference was not to impose tariffs but to reach a mutually beneficial agreement.