Canada launches new $20 billion tariff attack on U.S. computers and sports gear as trade war with Trump escalates

In a significant escalation of trade tensions, Canada has announced a new wave of retaliatory tariffs totaling approximately $155 billion in response to recent U.S. trade measures under President Donald Trump. This move underscores the deepening rift between the two longstanding allies and trading partners.

Background on the Trade Dispute

The origins of this dispute trace back to the U.S. administration’s decision to impose a 25% tariff on steel and aluminum imports, citing national security concerns. This action affected major exporters to the U.S., including Canada, the European Union, and Mexico. In retaliation, these trading partners have implemented or announced countermeasures targeting a wide array of U.S. goods.

Canada’s Retaliatory Measures

On February 1, 2025, Canada’s Minister of Finance and Intergovernmental Affairs, Dominic LeBlanc, and Minister of Foreign Affairs, Mélanie Joly, unveiled a comprehensive tariff package targeting U.S. imports. The initial phase, effective February 4, 2025, imposes 25% tariffs on $30 billion worth of U.S. goods. Products affected include consumer items such as orange juice, peanut butter, wine, spirits, beer, coffee, appliances, apparel, footwear, motorcycles, cosmetics, and pulp and paper. A second phase, following a 21-day public comment period, aims to extend tariffs to an additional $125 billion worth of U.S. goods. This expanded list encompasses passenger vehicles and trucks (including electric vehicles), steel and aluminum products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles, and recreational boats.

Economic Implications

The escalating trade war has raised concerns about potential economic repercussions on both sides of the border. In Canada, the Chamber of Commerce estimates that the 25% tariffs could lead to a 2.6% decline in real GDP, translating to an average cost of 1,900 Canadian dollars per household annually. In the United States, the projected GDP decline is 1.6%, with an average cost of 1,300 U.S. dollars per household. These figures highlight the potential strain on consumers and industries reliant on cross-border trader.

Political Reactions

Canadian officials have been vocal in their criticism of the U.S. tariffs. British Columbia Premier David Eby described President Trump’s tariffs as a betrayal of the historical bond between the two countries. In response, Eby ordered provincial liquor stores to cease purchasing American liquor from Republican-led states and directed government departments to halt procurement of American goods.

As both nations brace for the economic fallout, there is a growing emphasis on negotiations to de-escalate the situation. The Canadian government has indicated that all options remain on the table, including non-tariff measures, should the U.S. continue its current trade stance. The international community watches closely, recognizing that prolonged trade tensions could have broader implications for global economic stability.