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Prime Minister Mark Carney said he doesn’t believe in escalating the trade war with the U.S., but he argued counter-tariffs are necessary to cushion the blow for Canadian businesses and workers.
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As Canadian retaliatory tariffs kicked in on Tuesday, Carney addressed the deterioration in trade relations with the U.S., as well as his government’s economic plan.
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“I don’t believe in escalating the conflict, that’s not constructive, but our tariffs are necessary to protect our workers, protect our companies and our communities,” Carney said in a video posted on social media. “We can’t let American goods into Canada tariff-free while they charge our companies to export.”
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Adversity only makes us stronger. It always has.
Watch the new edition of Forward Guidance: https://t.co/75rhccwqIC pic.twitter.com/GGCzmb0k26
— Mark Carney (@MarkJCarney) September 8, 2026
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Carney’s government increased the import tax on many U.S. steel items to 50 per cent from 25 per cent, and applied tariffs to a range of consumer goods — motorcycles, cosmetics, cheese and more — at 12:01 a.m. New York time. The levies were in response to so-called Section 338 tariffs on US$20 billion of Canadian goods, which came into effect Aug. 22 following the breakdown in trade talks.
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The Section 338 tariffs, which apply to products regardless of whether they’re shipped under the North American free trade agreement, are sufficient to virtually halt U.S. imports of those goods, according to an analysis by Bloomberg Economics. That would put roughly 0.8 per cent of Canada’s gross domestic product directly at risk in the short term, cutting long-term GDP by 0.2 per cent relative to the 2024 baseline.
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U.S. President Donald Trump has been increasingly hostile toward Canada since the negotiations ended and Carney vowed to retaliate. He signed an order renaming Lake Ontario as Lake America, threatened to increase tariffs on Canadian cars to 50 per cent next year and pledged to restrict Bombardier from selling jets in the U.S.
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Carney said the “harsh reality” of the U.S. tariffs are meant to hurt some Canadians more than others “by design.” The Section 338 tariffs disproportionately affect Ontario, Quebec and British Columbia — the largest provinces that have retaliated against U.S. tariffs by pulling American alcohol from government-run liquour store shelves.
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“This won’t be easy, and I won’t pretend otherwise. But Canadians have faced difficult stretches before, and what’s carried us through has never ever been just one measure,” the prime minister said, adding that the most “powerful action” has come from Canadians who have chosen to buy local and travel within the country.
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A recent Nanos Research Group survey conducted on behalf of Bloomberg News shows Carney enjoys broad support for his approach to the U.S.
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Carney also reinforced his government’s plan to fast-track major infrastructure projects in Canada and grow free-trade relationships with other countries. He said over the next six months, Canada will double its tariff-free access to 3 billion consumers.
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“There’s always a cost to action. But it doesn’t come close to the cost of standing still,” Carney said.
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