Canada's new counter-tariffs on U.S. imports could raise consumer costs by billions

Effective today, Canada has introduced counter-tariffs on $28 billion of U.S. imports, with rates between 15 and 50 per cent covering a wide range of consumer and industrial goods. The move follows a U.S. 50 per cent tariff on Canadian exports announced after stalled trade talks. Economists Trevor Tombe of the University of Calgary and Joseph Steinberg of the University of Toronto project a $4 billion cost to Canadian consumers, especially low-income households, and note that the tariffs act as a tax on purchase decisions.

Unlike previous tariffs focused on consumer items, the current duties target intermediary inputs, likely raising production costs and eventually consumer prices. A Bank of Canada analysis found past tariffs added about 0.3 percentage points to inflation, and the new measures could have a slower but broader impact. Small-business surveys reveal that 49 per cent of owners are affected, with many absorbing costs or facing viability concerns, while the federal government has announced a $7.5 billion aid package for those hit by the trade dispute.