WASHINGTON — A trade war between the United States and Canada entered a new phase Tuesday as Ottawa’s retaliatory tariffs on American goods took effect, escalating a dispute that has steadily strained relations between the allies.
Canada’s tariffs, which came into force just after midnight, cover roughly $20 billion in U.S. goods and impose duties of as much as 50% on products, from steel and aluminum to farm equipment, clothing and electronics. The list also reaches into the everyday commerce that binds the two economies, including cheese, seafood and cosmetics.
It was the latest sign that relations between the two neighbors have reached their lowest point in decades, after Trump dismissed Canada as the 51st American state, moved to rename Lake Ontario and mocked its armed forces.
Ottawa’s latest measures are a response to tariffs imposed by President Trump last month on Canadian exports. The two governments had appeared close to a trade deal just a month ago. But talks broke down in dramatic fashion, leaving both sides aggrieved and accusing the other of negotiating in bad faith.
In a post Tuesday, Trump said Canada “has been ripping us off for years” and threatened to respond by removing access for Canadian businesses to key American markets.
“What many do not realize is that the Canadian Government, including Canadian Provinces, have banned American Small Businesses and Companies from selling into their Government Procurement Markets,” Trump wrote. “This is the case even though Canada gets broad access into the massive American Government Procurement Market, including those of our States.
“That is not reciprocity, it is a Canadian Trade Scam. From now on, NO RECIPROCITY — NO ACCESS!” he continued. “I am hereby directing the [General Services Administration], working with the [U.S. Trade Representative], to take all necessary steps to REMOVE Canadian-origin products from GSA’s Multiple Award Schedules unless Canada restores full and fair reciprocity for American Farmers and Companies.”
Canada’s prime minister, Mark Carney, has characterized the confrontation as more than a dispute over tariffs, arguing that demands by a bullying Trump administration threaten Canada’s economic independence.
In a video released Tuesday, Carney argued that in the past, the United States has tried to use tariffs to “break us,” only to have Canada’s economy grow stronger and more diversified. He urged Canadians to buy Canadian and break economic dependency from the United States.
“This won’t be easy, and I won’t pretend otherwise,” Carney said. “But Canadians have faced difficult stretches before, and what has carried us through has never ever been any one measure. It’s always been Canadians looking out for each other.”
Trump, meanwhile, has pressed Canada to make concessions on trade and has warned of further tariffs, including potentially higher duties on Canadian automobiles. He also threatened to ban the sale of aircraft from Canada’s Bombardier unless its products are manufactured in the United States.
“If they want our Market, they must build here, and stop treating America like a ‘piggybank,’” Trump wrote on Truth Social on Monday. “BUY AMERICAN. FLY ON AMERICAN AIRLINERS. ENJOY AMERICAN LIQUOR AND BEVERAGES. SAIL ON LAKE AMERICA. AMERICA FIRST!”
Earlier Monday, Trump posted an image showing Mexico, Canada, Central America, Greenland and Caribbean nations with the colors of the American flag. He also posted a caricature of him and Carney playing hockey in which Trump tells him: “Get up, Governor.”
Both sides stand to lose in a trade war poised to hurt businesses large and small across the world’s longest international border.
A prolonged economic conflict poses long-term risks for Canada, which faces price hikes and investment losses from the United States, by far its largest trading partner.
But Americans may also confront higher costs at a time when inflation is already a stubborn problem for the Trump administration. And the trade war may be felt most in northern border states set to hold midterm elections that could swing control of the U.S. Senate, becoming yet another political challenge for embattled Republican lawmakers.
In Maine, Republican Sen. Susan Collins, who is seeking reelection, has called Trump’s tariffs “a mistake.” In Michigan, Democratic Senate nominee Abdul El-Sayed released a video Tuesday highlighting everyday goods that have risen more than 30% over the last year, including Tide Pods, toilet paper and Tim Hortons coffee, as the trade conflict and war in Iran drive up costs.
American alcohol has also been the target of boycotts imposed by several Canadian provinces since March 2025 in response to earlier tariffs on Canadian goods by Trump.
The boycotts since then have erased roughly $360 million in revenue for the U.S. wine industry, according to a Wine Institute report, which represents California wineries. Canada makes up more than 35% of the export market for U.S. wine, more than the EU, U.K. and China markets combined.
For some California winemakers, the impact was even greater. One Sonoma winery referenced in the report said Canada made up about 85% of its international sales. Multiple wineries have had to lay off employees because of hits to their business.
“It’s had a tremendous negative impact,” said Julie Berge, vice president of communications at the Wine Institute.
Wine is not the only California business that has taken a hit — tourism has also seen a sharp decline in arrivals from Canada. In 2025, visitors from the country dropped by 20%.
Canada also targeted the agriculture, electronics and transportation equipment industries with its tariffs announced Tuesday, all of which have a presence in California.
Soon after the World Cup brought positive international attention and tourists to the United States, Trump escalated trade tensions with Canada.
“You went from this really high, exciting moment for the U.S. in terms of international attention, to the next week, it’s negative again,” Deborah Friedland, a hospitality consultant at financial services firm Eisner Advisory Group, told the Associated Press. “It’s one step forward and two steps back.”
Times staff writers Wilner and Ceballos reported from Washington and Duneja from Los Angeles.
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