According to Transport Topics, Canada will impose retaliatory tariffs of 15% to 50% on C$27.5 billion ($19.8 billion) worth of U.S. goods beginning Sept. 8, in response to new U.S. tariffs announced by President Donald Trump on Aug. 22.
Economic impact and federal response
Oxford Economics estimates the combined effect of U.S. tariffs, Canadian retaliation, and federal support programs will reduce Canada’s output by 0.3% relative to its baseline 2027 forecast. The Canadian government is pairing the countertariffs with a C$7.5 billion federal support package, though Oxford economists Tony Stillo and Michael Davenport state it will not fully offset the economic drag.
The retaliation raises Canada’s effective tariff rate on U.S. imports by 2.7 percentage points, lifting it to 5.1%. Meanwhile, the effective U.S. tariff rate on Canadian goods now stands at 6.9%. U.S. iron and steel products — already subject to 25% countertariffs — will face rates doubled under the new measures.
Stillo and Davenport project that the countertariffs will increase consumer prices by 0.5 percent above the baseline forecast in 2027, while producer prices rise by 0.2 points. They note this inflationary pressure is only partly offset by the disinflationary impact of U.S. tariffs.
Regional exposure and sectoral effects
Ontario and Quebec face the largest regional impacts due to their concentration of manufacturers affected by the tariffs — including machinery, paper, furniture, plastics, steel, and aluminum producers. The Maritime provinces and British Columbia will also experience pressure as higher prices and weaker household purchasing power weigh on their services-heavy economies.
In contrast, three oil-producing provinces — Alberta, Saskatchewan, and Newfoundland and Labrador — face relatively smaller impacts, according to Oxford Economics. Prime Minister Mark Carney pledged the retaliation after President Donald Trump imposed new 50% tariffs on roughly $20 billion worth of Canadian goods.
“Canada’s new retaliatory tariffs will help some industries but hurt most and weaken economic growth across the country by raising costs for producers and consumers.” — Tony Stillo and Michael Davenport, Oxford Economics
Source: Transport Topics
Compiled from international media by the SCI.AI editorial team.
