Canada’s retaliatory tariff program remains fully active, covering hundreds of product categories and tens of billions of dollars in annual trade. Rates range from 10% to 25%, with steel, aluminum, and select agricultural goods facing the higher rate. The measures were introduced in phases beginning in March 2025, initially covering about C$30 billion in U.S. goods and later expanding to an additional C$125 billion.
The trade fight is reshaping investment decisions. A KPMG survey of 275 Canadian manufacturers found that 42% have either already moved production to the U.S. or are considering doing so. Among firms with more than $300 million in annual sales, that figure rises to 49%. Separately, 57% of manufacturers have paused, reduced, or cancelled capital expenditure projects due to tariffs and uncertainty.
Carney has framed the U.S. tariffs as a negotiating tactic ahead of the USMCA review, while also warning that “hope isn’t a plan” and urging Canada to diversify its trade. The USMCA itself is now in annual reviews after the U.S. declined to renew it in its current form, though the agreement does not expire until 2036 and most Canada-U.S. trade remains duty-free under its exemptions.