Canada retaliated against the U.S. with new tariffs on around $21 billion of American goods after President Donald Trump imposed 25 percent tariffs on Canadian steel and aluminum Wednesday morning.
Canadian Finance Minister Dominic LeBlanc said American products affected include U.S.-made steel and aluminum, computers, sports equipment, and certain cast iron products, among others, CBC reported.
“We will not stand idly by while our iconic steel and aluminum industries are being unfairly targeted,” LeBlanc said.
Why it Matters
The U.S. and Canada are locked in a trade conflict that is unsettling financial markets and raising the specter of a North American recession.
Trump sees tariffs as a useful tool of American economic power. He used tariffs against Canada to coerce it to do more about the cross-border trafficking of fentanyl, an illicit synthetic opioid behind hundreds of thousands of opioid deaths.
Moreover, Canada is one of many American trading partners in line for what the Trump Administration is calling reciprocal tariffs from April 2.
Trump believes the U.S. is treated unfairly in its trading relationships. He either wants equal terms for American businesses or to protect them from external competition.
DAVE CHAN/AFP via Getty Images
What to Know
On Tuesday, the American president said he would double the steel and aluminum tariffs to 50 percent in a spat over the Canadian electricity supply.
Ontario Premier Doug Ford said he would impose a 25 percent tariff on electricity going to America in response to Trump’s trade war, and even threatened to cut it off entirely.
But both sides backed off after negotiations.
“[Trump] has to do what he thinks is important to get the right deal for America,” U.S. Commerce Secretary Howard Lutnick told CBS on Tuesday night when asked about what is being achieved with these sudden shifts in tariffs each day.
“You’ve got the right person sitting in that chair, making the right moves, and each and every move he’s made has resulted in what? The reasonable outcome that you would expect.”
What People Are Saying
Mark Carney, the new Canadian prime minister, said of the trade war with Trump on Sunday: “The Canadian government is rightly retaliating with our own tariffs. My government will keep our tariffs on until the Americans show us respect—and make credible, reliable commitments to free and fair trade.”
President Trump said in a post on Truth Social: “Canada must immediately drop their Anti-American Farmer Tariff of 250% to 390% on various U.S. dairy products, which has long been considered outrageous….If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the Tariffs on Cars coming into the U.S. which will, essentially, permanently shut down the automobile manufacturing business in Canada. Those cars can easily be made in the USA!”
What Happens Next
This is far from over. Trump has said more tariffs are coming for Canada and others in April, a development that could put the brakes hard on the global economy.
America’s trading partners are responding differently. While Canada and the EU had retaliated in kind, Australia has said it will not, arguing it is in nobody’s interests to keep applying tariffs to each other.
Correction, 3/12/25, 11:35 ET: Doug Ford’s title was corrected to Premier.
Update 03/12/25 6:33 p.m. ET: This article has been updated with additional information.
