Canadian lumber is on display at Gutherie Lumber on Tuesday, August 25, 2026 in Livonia, Michigan. Paul Sancia/AP hide signature switch signature Paul Sancia/AP TORONTO — Canada hit back at U.S. President Donald Trump on Tuesday, imposing tariffs on about $20 billion worth of American goods in retaliation for the latest round of tariffs on Canada. The result could resonate far beyond Canada, showing other governments whether a smaller U.S. ally can withstand Trump’s economic pressure. Canadian Prime Minister Mark Carney says U.S. demands could devastate key Canadian industries and limit the country’s independence, while Trump’s threats to Canadian sovereignty have rallied the public behind him. “Carney and Canada became symbols of resistance to him,” said Canadian historian Robert Bothwell. “And what he wants to do is make an example of Carney and Canada and theoretically scare everyone else, while actually showing them that they need to distance themselves even further from the United States.” The tariffs will affect hundreds of American products, including steel, aluminum, cheese, appliances, clothing, cosmetics and farm equipment, at rates of 15%, 25% or 50%. Here’s what you need to know. Canada responded with tariffs on hundreds of American goods Canada says its tariffs are dollar-for-dollar and Washington-for-dollar. They take effect Tuesday at 12:01 p.m. under an executive action known as an order in council and cover about $20 billion of American goods, about 6% of the $333.6 billion the United States exported to Canada last year. RBC Economics, the research arm of the Royal Bank of Canada, said the measures were unlikely to impact growth in the overall U.S. economy but could hit some businesses hard. Canada has already moved beyond tariffs in other ways. Eight out of 10 provinces continue to restrict or ban alcohol sales in the United States. The Distilled Spirits Council reports that U.S. spirits exports to Canada fell more than 70% year over year after the restrictions took effect. Trump threatens to punish Canada even more Since the collapse of trade negotiations between Canada and the United States on August 21, Trump and his administration have unleashed a barrage of tariffs, threats and personal attacks, portraying Canada as weak and dependent. On Monday, Trump threatened to ban the sale of planes to Canada’s Bombardier if it did not produce the planes in the United States. “NO LONGER SELLING BOMBARDIER IN THE UNITED STATES! Their products are not good enough!” Trump posted on Truth Social. “If they want our market, they should build here and stop treating America like a piggy bank.” Flavio Volpe, president of manufacturing trade group APMA Canada, responded to X that Bombardier uses American-made GE and Honeywell jet engines and employs about 3,000 American workers. Trump previously warned that Canada’s economy could collapse if Carney continued to treat him as the “enemy” and threatened consequences “worse than anything that has ever happened to a Canadian politician.” US Trade Representative Jamison Greer has threatened that Washington could retaliate by banning some Canadian products entirely. Trump even renamed Lake Ontario “Lake America,” but the change was ignored and ridiculed in Canada. Google and Apple bowed to Trump’s pressure and changed their maps for US users. On Monday, he posted a map of North America covered in a U.S. flag on social media. “After renaming the bay and lake, maybe the next step for him would be to rename the river?” said Daniel Beland, a political scientist at McGill University. Trump pressure increases resistance in Canada Trump’s trade war and repeated talk of making Canada the 51st state have fueled anger and rallied support for Carney. Canadians sharply curtailed travel to the United States and boycotted American goods. The current trade war began after Trump returned to office and imposed a series of tariffs on Canadian goods, even though he negotiated and repeatedly praised the North American Trade Agreement during his first term. Many of these tariffs violate the pact. The gap is especially stark as the countries have long had one of the world’s closest relationships, with deeply integrated economies, close defense and security cooperation, extensive cultural ties and, before relations deteriorated, about 400,000 people crossing the border every day. Carney said talks could resume when Americans “stop making memes, stop throwing shade, stop trying to be tough” and get serious. So far, Trump’s pressure has backfired in Canada, increasing support for Carney rather than forcing him to make concessions. Nelson Wiseman, professor emeritus of political science at the University of Toronto, said Trump’s re-election in 2024 has deepened Canadians’ distrust of the United States – not just its government, but also the views of Americans. “The Canada-U.S. relationship, even without confrontation, will never be the same as it was before Trump,” he said. Carney becomes global voice against Trump At the World Economic Forum in Davos in January, Carney warned that great powers were using economic integration to coerce smaller countries. The speech helped him become a leading voice among countries looking for ways to confront Trump. A day later, Trump responded by saying that Canada “lives because of the United States” and warned: “Mark, remember that the next time you make your statements.” Carney will address the European Parliament next week, giving him another important milestone. “The Canadian public supports the Carney government and the world is watching to see what happens next,” said Beland, the McGill political scientist. If Canada’s bold approach succeeds, it “could be used as a template” for resisting the Trump administration’s trade policies, he said. The dispute is also over whether Canada will keep its factories. Trump has also threatened 50 percent tariffs on Canadian vehicles, auto parts and steel next year if Canada does not “comply,” a potentially devastating escalation for industries built on deeply integrated North American supply chains. “We want cars to be made in Detroit, South Carolina, Tennessee and all of our locations where we make cars. We don’t want them made in Canada,” Trump said. A 50% auto tariff could hit Canadian factories and drive up North American vehicle prices as parts and finished vehicles repeatedly cross the border during production. Carney says Washington’s conditions could lead to Canadian industry “phasing out and disappearing.” Can Canada Really Win? Canada starts from a disadvantage: the US economy is about 13 times larger, and Canada sends more than 70% of its exports south of the border. But Beland said this is no ordinary trade fight. He pointed to Trump’s unpopularity domestically, the looming midterm elections and legal challenges that could undo new U.S. tariffs. “Under normal circumstances this would be very unlikely for Canada,” he said. But Washington also has vulnerabilities. US refineries rely on 4 million barrels of oil per day from Canada, and American farmers rely heavily on Canadian potash fertilizers. Until now, however, Canadian leaders have ruled out using some of these levers by taxing or restricting key exports. Canada entered this round with some economic momentum. Its economy grew at an annual rate of 3.2% in the second quarter, more than double the 1.5% growth rate of the United States. Industry Minister Mélanie Joly made the government’s ambitions clear: “I am confident that we can show the world that Canada will win this trade war.” Post navigation New Arm chip platform aims to make your phone smarter and your games more beautiful Nigella Lawson and Paul Hollywood… Will the Bake Off kitchen be big enough for both of them, asks KATIE HIND.