Prime Minister Mark Carney has said that Canada’s pivot away from the US as its largest trading partner “will come at a cost”, as a wave of Canadian retaliatory tariffs on American goods come into force.
In a video address, Carney added that the counter-tariffs against the US “are necessary to protect our workers”.
Canada’s levies will apply to nearly C$28bn ($20bn; £15bn) of American products, from steel to furniture to cotton T-shirts, and will be as high as 50%.
Both US and Canadian officials have said they would like to strike a deal, but no new talks have been scheduled since negotiations collapsed in late August.
In Tuesday morning’s 15-minute video address, Carney said his country’s main focus was to diversify its trade relationships and build its economy.
He added that his government would also support workers affected by the ongoing trade war with the US “for as long as it takes”.
“We have everything we need to pivot and prosper,” the prime minister said. “That pivot will come at a cost.
“There’s always a cost to action, but it doesn’t come close to the cost of standing still.”
US trade representative Jamieson Greer meanwhile said that Washington would consider imposing tit-for-tat tariffs on Canada as early as Tuesday.
“We’ll see this afternoon,” he said in French, speaking to CBC News.
President Donald Trump threatened on Monday to halt all US business with Canada-based airplane maker Bombardier unless it moved its manufacturing south.
The aerospace giant is one of the largest in the country, contributing over C$7bn to Canada’s annual GDP in 2024, according to a report by accounting firm PwC that was commissioned by Bombardier.
Trump argues that these import taxes encourage consumers to buy American-made goods and boost investment in the US from foreign companies.
But economists warn that prices rise for consumers on everyday goods that are targeted by tariffs.