Donald Trump vs Canada trade war escalates: Now Ottawa announces $20 billion retaliatory tariffs on US-made items

Donald Trump versus Canada Trade Wars: Amid the escalating trade war between neighbours Canada and the US, Ottawa announced new 25% counter-tariffs on about C$30 billion ($20.8 billion) of US-made items.

The tariffs, which will take effect at 12:01 am New York time on Thursday, target US steel products worth CAD 12.6 billion ( ₹76.04 billion), aluminum products valued at CAD 3 billion (RS 181.24 billion), and an additional CAD 14.2 billion ( ₹858.31 billion) worth of other goods, including computers and sporting equipment. 

This "dollar for dollar" approach ensures that the Canadian levies match the US tariffs, as stated by Canadian Finance Minister Dominic LeBlanc.

On Tuesday, Donald Trump had announced plans to double the tariffs on Canadian steel and aluminium imports from 25 per cent to 50 per cent. “I have instructed my Secretary of Commerce to add an ADDITIONAL 25 per cent Tariff, to 50 per cent, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD,” Donald Trump posted Tuesday on Truth Social.

Within hours, by Tuesday afternoon, President Trump made a U-turn and called off the imposition of 50 per cent tariffs on steel and aluminium from Canada.

The switch came after a Canadian official also backed off his own plans for a 25 per cent surcharge on electricity, reported Reuters.

On Tuesday, Donald Trump had also announced plans to declare a 'National Emergency on Electricity' in response to Ontario's imposition of a 25 per cent surcharge on electricity exports to the United States.

On Monday, Ontario put a 25 per cent fee on its electricity exports to New York, Michigan and Minnesota in response to Donald Trump's 25 per cent tariffs on Canada.

Further, on Wednesday, the European Union also announced retaliatory trade action with new duties on US industrial and farm products, responding within hours to the Trump administration’s increase in tariffs on all steel and aluminium imports to 25 per cent.

European Commission President Ursula von der Leyen said in a statement that the bloc “will always remain open to negotiation”.

“As the US are applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros,” she said. The commission manages trade and commercial conflicts on behalf of the 27-member EU countries.

Last week, President Trump permitted the implementation of 25 per cent tariffs on Canada and Mexico, citing concerns over illegal drugs and migration. However, within days, he announced a one-month exemption for goods covered by the North American trade agreement.

Concurrently, Donald Trump doubled a similar tariff on China to 20 per cent.

Donald Trump's recent orders on steel and aluminium have revived and expanded his 2018 levies on these metals, eliminating exemptions for products made from them.

Consequently, according to research from Global Trade Alert, these new tariffs will affect approximately $150 billion worth of imported consumer goods, as well as raw steel and aluminium.

During his first administration, President Trump granted exclusions to major suppliers such as Canada, Mexico, Brazil, and the European Union, resulting in fewer than half of imports being subject to tariffs in some months.

The US administration officials have cautioned against expecting similar carveouts in the future.