Canada Hits US With Counter Tariffs as Trade Tensions Escalate

03:46 PM EDT, 08/25/2026 (MT Newswires) -- Canada on Tuesday announced retaliatory tariffs on roughly US$20 billion worth of the American goods, matching Washington's move "dollar for dollar" as trade tensions between the two nations escalate. Ottawa's counter tariffs of up to 50% cover imports from the US worth 27.6 billion Canadian dollars (US$19.96 billion). The levies apply to categories including US steel, dairy, appliances, agricultural equipment and electronics starting Sept. 8. The US imposed 50% tariffs on US$20 billion of Canadian imports over the weekend after the two countries failed to reach a trade agreement. On Monday, President Donald Trump threatened to boost tariffs on Canadian cars, trucks and steel to 50% starting next year. "Canada did not choose this trade conflict, but we need to respond to provide a level playing field to our businesses," the country's Department of Finance said in a statement. "Canada will match the new US tariffs dollar for dollar, rate for rate." Trade negotiations collapsed after the US proposed new terms that were not in Canada's best interest, Ottawa's Department of Finance said. "Canada therefore suspended negotiations rather than accepting a bad deal that would undermine Canadian workers, businesses, strategic sectors, and our national interest," the statement said. In a statement on Tuesday, the White House said the US offered Canada "the most preferential market access of any country on Earth, with deep cuts on steel, aluminum, autos, lumber, and more." "Instead of partnership, Canada chose unreasonable demands, walk-backs, and flat-out rejection," the White House said. Trump described the US neighbor as "the most difficult and unreasonable" among all countries he deals with, according to his Truth Social post on Tuesday. The US recorded a trade deficit of $48.3 billion with Canada last year, the smallest annual gap since 2021, Stifel said in a note e-mailed to MT Newswires on Tuesday. Excluding crude and other refined petroleum products, the US logged a $50.5 billion trade surplus with its neighbor last year, according to the firm.