Canada announced Wednesday that it will impose over $20 billion in retaliatory tariffs in response to President Donald Trump’s sweeping 25 percent tariffs on all steel and aluminum imported into the United States. The move escalates tensions between the two longtime trade partners, adding to fears of a full-scale trade war.
Trump introduced the tariffs as part of his broader effort to boost U.S. manufacturing and correct trade imbalances with countries such as Canada.
However, critics warn that these measures could increase prices for American consumers and disrupt industries reliant on imported materials. The European Union has also responded with countermeasures against U.S. exports after facing similar tariff increases.
Trump Promises Response to Canadian and European Tariffs
When asked Wednesday in the Oval Office whether the U.S. would respond to retaliation from Canada and Europe, Trump was firm in his stance.
“Of course, I will respond,” he told reporters.
Trump has repeatedly defended his tariff policies, arguing that other countries have taken advantage of U.S. trade policies for too long. However, American businesses and consumers could feel the impact of the escalating tensions, with the possibility of higher prices on goods ranging from automobiles to household appliances.
📹🇺🇸 April 2nd is going to be a VERY BIG DAY for the United States of America – Trump pic.twitter.com/j7NS4nRKyf
— Sputnik (@SputnikInt) March 12, 2025
Canada’s Retaliatory Tariffs Take Effect Thursday
Starting Thursday, Canada will impose a 25 percent duty on $20.1 billion worth of U.S. imports, primarily targeting steel and aluminum products. In addition, billions of dollars in tariffs will be placed on other American goods, including computers, sporting equipment, and industrial materials.
As a direct result of the tariffs, Algoma Steel—one of Canada’s largest steel producers and a major supplier to the U.S.—announced it will temporarily suspend shipments to American customers. The company cited uncertainty surrounding trade negotiations and the potential for further economic fallout.
The Canadian government has warned that these retaliatory measures are just the beginning, with additional countermeasures scheduled for April 2.
Canada and U.S. to Hold High-Level Trade Talks
Canadian Finance Minister Dominic LeBlanc emphasized that his country is not backing down and is prepared to escalate its response if necessary.
“We will continue to maintain our countermeasures and increase them on April 2nd,” LeBlanc stated.
LeBlanc is set to meet with U.S. Commerce Secretary Howard Lutnick in Washington on Thursday to discuss a path forward. The talks will focus on finding common ground while navigating Trump’s new tariff policies.
“The conversation tomorrow will be about lowering the temperature and focusing on the process that President Trump set up, where Secretary Lutnick has until April 2 to determine a series of global tariff decisions,” LeBlanc said.
Trump’s administration has indicated that April 2 will be a critical date, as reciprocal tariff actions across multiple countries will be announced. This suggests that new U.S. tariffs could be introduced on imports beyond steel and aluminum, potentially affecting automobiles, consumer goods, and other key industries.
Canada’s Incoming Prime Minister Seeks Diplomacy
Despite the trade tensions, Canadian Prime Minister-designate Mark Carney signaled his willingness to engage directly with Trump to find a resolution. However, he made it clear that Canada will not accept policies that undermine its sovereignty.
“We’re working for a common approach, a much more comprehensive approach for trade,” Carney said. “We are all going to be better off when the greatest economic and security partnership in the world is renewed.”
He reassured Canadians that the new government remains committed to protecting national interests despite the challenges posed by U.S. trade policies.
“You have a new government but the same commitment,” Carney added.
The intensifying trade standoff comes at a critical moment for both economies. The U.S. and Canada share one of the world’s largest trading relationships, with over $2 billion in goods crossing the border daily. Many industries on both sides rely on free trade agreements, and disruptions could lead to layoffs, supply chain issues, and higher consumer costs.
With Trump’s aggressive trade stance, Canada’s firm countermeasures, and the looming April 2 tariff deadline, the situation remains unpredictable. Whether diplomatic talks can prevent further economic escalation remains to be seen.