Canadian Prime Minister Justin Trudeau brought the global trade tension to new heights on March 4, 2025 by declaring Canada would tax U.S. imports by 25% as a direct result of former President Donald Trump starting new trade restrictions. The economic retaliatory measures have established a crucial turning point in the continuous trade dispute between Canada and the United States.
Details of Canada's Retaliatory Tariffs
The Canadian government will execute its retaliatory tariffs through two consecutive stages.
A 25% tariff will take effect immediately on Tuesday against U.S. goods with total worth C$30 billion equivalent to about $20.7 billion USD.
Canada will implement the second set of C$125 billion (equivalent to $86.2 billion USD) retaliatory import tariffs in the following twenty-one days.
The government of Canada continues to uphold these countermeasures until the United States dismantles its trade restrictions.
Targeted U.S. Products
The tariffs specifically target major U.S. exporting goods which include:
Live poultry
Dairy products
Vegetables
Coffee and tea
Products from the milling industry
Oil seeds
Sugar
Beverages, spirits, and vinegar
Tobacco
Plastics
Rubber
Wood
Paper
Apparel and accessories
Articles of iron and steel
Aircraft parts and accessories
Arms and ammunition
Trump chose specific merchandise to enforce economic consequences against important regional constituencies which support him politically.
Global Economic Impact
Global markets experienced immediate negative effects after the announcement took place:
The Dow Jones Industrial Average dropped by approximately 1.9% amounting to 800 points which indicated a complete loss of all post-election gains.
The resulting commodity price escalation occurred because investors infused their capital into gold due to heightened trade pressures.
International Responses
International countries implemented various responses to the American trade barriers.
China implemented new import taxes targeting U.S. coal together with natural gas and oil products and agricultural equipment followed by additional import taxes from 10 to 15 percent for agricultural goods.
Mexican President Claudia Sheinbaum declared her government will retaliate with tariffs against U.S. products while specifying the affected products during the upcoming days.
Looking Ahead
Businesses and consumers alongside supply chains operate at risk because of the intensifying trade war which brings economic instability and interference in worldwide supply networks. The implementation of protectionist strategies by nations will lead to both business price increases and consumer goods shortages. Solving these disputes diplomatically remains essential because it would minimize ongoing economic damage.