Canada is preparing to announce retaliatory tariffs on U.S. goods, according to Dominic LeBlanc, the minister responsible for Canada-U.S. trade relations.
Speaking to CNBC on Tuesday, LeBlanc indicated that the Canadian government intends to unveil the new trade measures today.
Canada Moves Toward Retaliatory Tariffs
When asked whether Canada would announce tariffs on goods imported from the United States, LeBlanc said that was the government’s intention.
He added that Washington should not be surprised by the move, as Canada had previously warned that retaliatory action could follow if the two countries failed to reach a trade agreement.
LeBlanc said Canada would have preferred to avoid imposing new tariffs. However, he argued that the government must take appropriate measures to protect important parts of the Canadian economy if negotiations remain unsuccessful.
Trump Threatens 50% Tariffs on Canadian Vehicles
Canada’s planned response comes after U.S. President Donald Trump threatened to sharply increase tariffs on Canadian automotive imports.
Trump said Monday that the United States could raise tariffs on Canadian cars, trucks and automotive parts to 50%, starting January 1, 2027.
The announcement represents another escalation in the growing Canada-U.S. trade dispute, particularly after negotiations between the two countries broke down last week.
Canada-U.S. Trade Deal Collapses
The proposed trade agreement would have significantly reduced several existing U.S. tariffs on Canadian products.
Under the failed deal, the highest tariff on Canadian cars and light-duty trucks would have fallen from 25% to 15%.
Tariffs on Canadian aluminum and steel were also expected to decline from 50% to 25%.
However, negotiations collapsed on Friday following disagreements over several key issues.
One of the main sticking points involved whether U.S. tariff relief would also apply to Canadian medium- and heavy-duty trucks.
Trade Tensions Between Canada and U.S. Intensify
The latest developments suggest that trade tensions between Canada and the United States could deepen further if both governments proceed with additional tariffs.
Canada’s retaliatory measures could affect a range of U.S. exports, while Washington’s threatened 50% automotive tariffs would place additional pressure on the highly integrated North American auto industry.
With negotiations currently stalled, investors and businesses will be watching closely for details on which U.S. products Canada plans to target and whether the two countries can eventually return to the negotiating table.
