Canada’s retaliatory tariffs on American goods took effect after midnight on Sept. 8, marking another escalation in a trade war between the United States and its second-largest trading partner.
After negotiations fell apart last month and President Donald Trump’s administration imposed 50% tariffs on an estimated 5% worth of Canadian imports, Canadian Prime Minister Mark Carney announced counter-tariffs. They cover about $20 billion worth of U.S. products exported to Canada and range from 15% to 50% across an array of goods.
For the Canadian economy, "the new tariffs create a meaningful but manageable headwind" although their effects will be felt unevenly across provinces and sectors, according to Angelo Kourkafas, Edward Jones' senior global
strategist of investment strategy.
The Canadian tariffs on U.S. goods aren’t expected to make a significant dent in most Americans’ budgets, as they are a tax Canadian-based importers will need to pay. However, U.S. producers who regularly export products to Canada will likely face lower demand and need to rethink their supply chains to serve other countries or more domestic consumers, Shikha Jain, a Simon-Kucher partner and lead of the consumer sector for North America, told USA TODAY.
"What really matters for the U.S. consumer is the tariffs that the U.S. importers have got to pay," Padhraic Garvey, head of research at Dutch bank ING, said. "Entities that import goods and pay the tariff have got a choice to make. Do they suck it up or do they pass it on to the consumer?"
Canadian tariffs affect these US products
Canada’s new retaliatory tariffs target a list of hundreds of U.S. products. They are concentrated in a few sectors including dairy, appliances, agricultural equipment, pulp and paper, plastics, and electronics.
Canada also increased its existing counter tariffs on U.S. steel and aluminum from 25% to 50% to match American rates.
Among the items hit with 50% tariffs are American milk, T-shirts, perfume, smartphones, and some furniture. Facing 25% tariffs are U.S. cheese, toilet paper, carpets, and some appliances. American air conditioners and some machinery parts are subject to 15% tariffs.
Garvey said the impact of the Canadian tariffs on U.S. goods is likely to be "relatively minimal" for everyday Americans. However, because both countries' production relies on imports from the other, prices could still rise. Say Canadian manufacturers need to pay more for materials imported from the United States due to tariffs. If they use those materials to make a product that is then exported back to United States, that product could face another tariff, further driving up its cost.
"You end up with a decrease in efficiency when it comes to Canadian-U.S. trade, and any decrease in efficiency is probably going to result in higher prices," Garvey said.
What goods are affected by American tariffs on Canada?
The U.S. tariffs on Canadian imports primarily target Canada's auto, alcohol, and dairy industries. Its oil, natural gas, and critical minerals remain exempt.
The White House's list of goods affected by the new tariffs is 18 pages long. It ranges from toys and hockey equipment to silver and cameras. Also included are honey, flowers, golf equipment, video game consoles, gold necklaces, and clothes.
While consumers can buy American products to avoid these tariffs, those who rely on purchasing Canadian imports can expect most retailers to raise their prices over the coming months, Jain said.
Because U.S. homebuilders have historically sourced some building materials from Canada that made the list, experts said the already pricey process of building new homes in the United States may also get more expensive.
Threats continue as trade war escalates
The day before Canada's new tariffs took effect, Trump threatened to stop Canadian aircraft company Bombardier from selling in the American market unless it moves its manufacturing to the United States.
“Over 50% of their revenue comes from the United States — They live off American Buyers, American Companies, American Airports, and American Service — All while Canada blocks our GREAT American Banks, and Companies, throughout the U.S.A,” Trump wrote in a post to Truth Social. “That Era is OVER! If they want our Market, they must build here, and stop treating America like a “piggybank.”
That threat came after Trump last month also threatened to double U.S. tariffs on Canada’s auto industry to 50%, beginning Jan. 1, 2027. If he follows through on that threat, experts said Americans are likely to see higher prices when shopping for a new car, as major automakers rely on Canadian manufacturing plants before importing vehicles to sell to U.S. consumers.
Trump isn't the only one making threats. In August, Carney appeared to threaten that Canada could halt its energy exports to the United States, a move that would limit U.S. oil supply and could further drive up prices at the pump for American consumers. It's unclear whether that threat is credible as Jain told USA TODAY that it would be difficult for Canadian supply chains to adapt and replace the United States as a customer.
"That actually brings it into a war-type scenario where you're actually hurting the infrastructure of the U.S. And secondly, it would hurt Canada even more," Garvey said. "I don't expect to get there to be honest. And if we do get there, we are in a bad place, a much, much worse place than where we are today."
Who wins and who loses?
There may be no true winner in a U.S.-Canada trade war.
"It's more of a case of who loses least," Garvey said.
He said most metrics show the trade war appears more damaging to Canada, whose economy has performed worse over the last decade. Garvey added, however, that both countries "absolutely do need each other."
Carney said in August that "Canada fuels American growth" by supplying a majority of U.S. natural gas, electricity, and crude oil imports. And the United States was Canada's dominant export market in 2025, accounting for about 72.5% of Canadian goods exported and about 17% of the nation's nominal gross domestic product, Kourkafas said.
"Ultimately, the two economies are too deeply intertwined for this conflict to continue indefinitely, but the path to a resolution is likely to be volatile, costly and difficult to predict," Mario Lefebvre, CoStar Groups' Canada chief economist, said in a note to USA TODAY.
Reach Rachel Barber at rbarber@usatoday.com, follow her on X @rachelbarber_, and subscribe to her newsletter "Making More of Your Money" here.
This article originally appeared on USA TODAY: Canadian tariffs on US goods take effect. Which products are impacted?
