Canadian Prime Minister Mark Carney announced plans for retaliatory duties on steel, dairy, appliances, agricultural equipment, electronics, pulp and paper, to be applied on a dollar‑for‑dollar basis as a response to U.S. trade measures.

Canada relies heavily on the United States, with about 70% of its goods sold to the U.S., making it a top customer for 26 states and among the top three customers for 45 of 50 states.

The proposed tariffs cover a range of products, while energy imports such as natural gas, electricity and crude oil, which Canada supplies to the United States, are not currently included in the counter‑measures, though officials have indicated they remain an option.

Ontario Premier Doug Ford said an energy surcharge on electricity exports is under consideration, including a proposed 25% levy that would affect roughly 1.5 million homes and businesses in Michigan, Minnesota and New York. Canada is also the world’s largest supplier of potash, lithium, nickel and graphite, and the United States is its primary market for mineral exports.

Earlier, most Canadian provinces banned U.S. alcohol from liquor store shelves in response to initial U.S. tariffs, resulting in a 78% decline in U.S. wine exports to Canada and a loss of about C$357 million, with spirits exports falling by more than 70%, according to government data and industry associations. The bans remain in place in 11 provinces and territories.

Avoiding travel to the United States has contributed to an estimated C$3.3 billion revenue loss for the United States, with Canadians making 800,000 fewer trips in April compared with the same month of 2024, according to national statistics.

Analysts estimate that the most recent 50% tariff on about $20 billion of Canadian imports could reduce Canada’s GDP by 0.3% to 0.6% in the short term, while the U.S. Treasury projects household costs of about $1,100 per year under current tariff levels. A poll by Angus Reid found that 76% of Canadians support the government’s decision to maintain a hard bargaining position despite concerns about personal job security.

Ford said the United States would not obtain any resources from Ontario and indicated that retaliatory measures could target Republican‑leaning U.S. states. Carney warned that higher tariffs on automobiles and auto parts after January 1 could hurt U.S. workers in Michigan, Ohio, Kentucky and Alabama, noting that Canada purchases more U.S. vehicles than the EU and other regions. British Columbia Premier David Eby said U.S. consumers would feel the impact of tariffs on items such as plywood, veneers, cut flowers and fishing equipment.

The situation remains unresolved as the U.S. midterm elections approach, with the economy a central issue for voters in border states such as Michigan and Maine. Further tariff increases could intensify economic pressure on both sides.