The US-Canada tariff war escalates as Ottawa’s counter-duties take effect

The US-Canada tariff war has escalated once again, with Canada imposing retaliatory tariffs on approximately $20 billion worth of US goods alongside bans on certain products¹. The latest round of Canadian counter-tariffs took effect on September 8, applying duties of 15%, 25% and 50%, according to Retail Insider². As part of that round, the federal government targeted corrugated boxes and cartons with a 50 per cent tariff, CTV News reported⁴.

Movement is not all in one direction. President Donald Trump has removed the 50% tariff on bulk Canadian whisky and liqueurs, effective September 15, in what Newsquawk described as the removal of a punitive levy on a narrow category³.

Why it matters to investors

Tariffs on packaging and inputs land on cost lines rather than on headline consumer goods, which is why the corrugated-box duty matters more than its size suggests⁴. Vegetable producers have received relief from the new counter-tariffs, an exemption that itself signals where the cost pressure was biting⁴. On the retail side, Empire has been rejecting tariff-related supplier price increases and says it has seen limited tariff impact so far². News Metal described the escalation as another round in a war of retaliatory measures and outright bans on goods, rather than a single tariff adjustment¹.

The inflation argument is now explicit in Canadian politics. Pierre Poilievre said a US-Canada trade detente would ease inflation pressures, arguing that Canada’s oil and mineral resources can help alleviate US inflation but that the Trump administration needs to back off its tariff policies^5,6. That places the tariff file directly alongside the US inflation debate rather than beside it.

What to watch

Canada is trying to convert the disruption into capital inflows. The Financial Times reported that Canada is seeking $1tn from investors looking for a haven from Trump’s volatility, through an investor summit hosting a C$120tn pool of global capital, equivalent to US$87tn⁷. The summit is an attempt to turn a trade dispute into a case for foreign capital, at a scale far larger than the tariffs themselves⁷.

Three things will show which way this runs. Whether the whisky exemption effective September 15 is the first of a series of narrow rollbacks or an isolated gesture³. Whether more Canadian exemptions follow the relief granted to vegetable producers⁴. And whether retailers can keep refusing supplier price increases as the 15%, 25% and 50% duty bands work through inventory^1,2.