TORONTO (AP) — Canada struck back at the United States on Tuesday with retaliatory tariffs on about $20 billion worth of American goods, including steel, dairy products, appliances and farm equipment, as the trade war between the once-friendly neighbors escalated sharply.
The tension threatened one of the world’s largest trading relationships. The new tariffs extended well beyond industrial goods, hitting everyday purchases such as seafood, cheese, clothing, cosmetics and toilet paper, with some facing duties as high as 50%.
Canada’s retaliation came after the Trump administration imposed 50% tariffs over the weekend on Canadian goods following the collapse of trade negotiations. Canadian Prime Minister Mark Carney accused Washington of trying to subordinate Canada and said U.S. demands during the failed talks showed that Americans wanted to “destroy our major industries.”
 President Donald Trump intensified the confrontation Monday, telling Canadian leaders to “fall in line” or face consequences “far WORSE” than existing tariffs and threatening new 50% tariffs on Canadian vehicles, auto parts and steel.
Trump added another provocation Tuesday, saying the United States was giving “serious consideration” to renaming Lake Ontario “Lake America” in a feud with Ontario Premier Doug Ford. Such a change would be reminiscent of the Republican president’s unilateral action last year by executive order to rename the Gulf of Mexico to the Gulf of America.
The tariffs will take effect Sept. 8 at rates of 15%, 25% and 50%, with Canada matching the corresponding U.S. tariff rate on more than 700 products such as pulp and paper and electronics. The tariffs on many American products would double from 25% to 50%, with the largest share of the new measures affecting steel and aluminum.
Canadian officials said the goal is not to raise revenue but to protect Canadian companies and reduce U.S. imports.
Canada also announced a support package for workers and businesses affected by the dispute worth $7.5 billion in Canadian dollars ($5.4 billion in U.S. dollars).
Canadian officials acknowledged the counter tariffs will raise costs for some businesses and consumers but said they expect the overall economic effects to be moderate.
They said the government has provided more than $30 billion Canadian dollars (US$21.7 billion) in tariff-related support since the beginning of 2025 — far more than it has collected in retaliatory duties — as it tries to cushion the blow from the trade fight.
Canada and the United States have deeply integrated supply chains across autos, energy, agriculture and manufacturing, making a prolonged trade fight potentially costly for businesses and workers on both sides of the border.
Businesses and consumers are caught in the middle, facing uncertainty about how much prices may increase.