Canada will impose counter-tariffs of up to 50% on $27.6 billion of American goods from September 8, matching Washington across eight sectors while leaving its existing duties on US vehicles unchanged — a day after President Donald Trump threatened to double tariffs on Canadian cars and parts.
Finance Minister François-Philippe Champagne said on Tuesday the response would be “dollar for dollar, rate for rate,” with rates of 15%, 25% and 50% mirroring the American measures product by product.
The package covers steel, dairy, appliances, agricultural equipment, pulp and paper and electronics. Steel and aluminium products previously taxed at 25% move to 50%, as do furniture and clothing.
It does not affect autos.
The Sector Ottawa Left Alone
“Other existing counter-tariffs against the U.S., including autos, remain in place,” the finance department said, adding that Canada’s tariff remission framework also stays available.
Canada has taxed US vehicles since April 2025 — 25% on non-compliant cars and on the non-Canadian, non-Mexican content of compliant ones.
The remission framework lets automakers import a set number of US-assembled vehicles free of that duty in exchange for maintaining production in Canada.
Both survive Tuesday’s announcement untouched. Ottawa escalated everywhere its own manufacturing is not exposed, and held the line where it is.
Trump Wants to Double His
The restraint is more pointed given what Washington said on Monday.
“On January First, 2027, Tariffs on all Cars, Trucks, both large and small, Automotive Parts, and Steel, will be increased to 50%,” Trump wrote on Truth Social, doubling the 25% Section 232 rate and extending it to components.
Vehicles built in the United States are exempt. “Build in the U.S. and there are ZERO TARIFFS,” he wrote. “Canada will be treated like a State no longer!”
He returned to the platform on Tuesday, writing that the United States had lost an average of $60 billion a year with Canada over a decade, and that Canada was “easily the most difficult and unreasonable” country he deals with.
Extending the rate to parts is the substantive change as components in North American vehicles cross the border several times in different forms before final assembly, exposing them to duty at each crossing.
The Talks Broke Over Trucks
Both governments say vehicles were central to the collapse. They describe opposite sequences.
Ottawa said Washington “proposed new terms that were not in Canada’s best interest, basically, asking too much of Canada, and offering too little in return,” and that it suspended negotiations rather than accept a bad deal.
US Trade Representative Jamieson Greer told CNBC on Monday that Canada “declined to finalize the trade deal under the terms agreed earlier this week.” The American package covered cars, passenger trucks, sport utility vehicles and pickups, he said, and Canada wanted the scope widened: “We want the heavies. We want the heaviest trucks available.”
Greer said the offer included halving steel and aluminium tariffs and reducing auto tariffs extensively — a cut to 15% from 25%, which Canada had been weighing since early August. That offer is now gone.
CBC reported that Commerce Secretary Howard Lutnick objected specifically to the 15% figure. However, Greer dismissed suggestions of friction while confirming Commerce holds the Section 232 authority.
Ontario in the Middle
Trump used a further post to attack Ontario Premier Doug Ford, who had threatened to cut American access to the province’s electricity and critical minerals.
“Someone should get these clowns to ‘fall in line’ or, the consequences for Canada will be far WORSE!” Trump wrote, calling Ford a “Flunky” of Prime Minister Mark Carney. Ford replied by calling Trump a bully and a dictator.
Ontario accounts for the overwhelming majority of Canadian vehicle production, and the trucks at issue are built there.
Carney said on Saturday that without relief, Ford‘s new Ontario plant, which builds F-350s and larger pickups, “would have been excluded. No rationale.” Chevrolet Silverado production in Oshawa sits in the same category.
Flavio Volpe, President of the Automotive Parts Manufacturers’ Association, told the Canadian Broadcasting Corp. that the Americans “pulled that classification out of the class of product that would get a reduced tariff” at the last minute.
The Cushion
Ottawa paired the counter-tariffs with a $7.5 billion support package, on top of nearly $25 billion provided since the American tariffs began.
The figure includes $2 billion through a new Canada Strong Diversification Fund, $3.5 billion in rapid-response support for workers and employers, $1.5 billion through regional development agencies and a $500 million liquidity stream at the Business Development Bank of Canada.
Trump’s auto increase is not due until January 1, leaving 129 days for the two sides to return to the table.
