Canada brutally hits back at Trump’s tariffs ultimatum with huge hike that could cripple struggling US industry
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After President Donald Trump shut down all trade talks with Canada, the country retaliated by hiking duties on American steel imports.
Canada imposed an import quota late Friday and if it is exceeded, certain American steel sent to the country will face a new 50 percent surcharge.
Canada’s Finance Minister, François-Philippe Champagne, said the government was acting to protect domestic industry from ‘unjust US tariffs,’ NBC News reported.
The response came hours after Trump posted on Truth Social about how Canada is a ‘very difficult country to trade with.’
His reason for suspending trade negotiations came down to a tax Canada is set to impose on major tech companies starting Monday.
‘Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,’ Trump wrote, adding that the levy ‘is a direct and blatant attack on our Country.’
Last week, the finance minister said he would not delay the implementation of the digital services tax, which applies to any firm making more than $15 million from Canadian internet users.
The three percent tax will strike at the heart of American companies like Amazon, Google, Meta, Uber and Airbnb.
Canada has retaliated against the United States for shutting down trade talks by hiking duties on American steel imports to 50 percent if they exceed a certain quota (Pictured: President Donald Trump and Canadian Prime Minister Mark Carney at the White House on May 6, 2025)
Canada’s response came hours after President Donald Trump made this post criticizing the country for levying a usage tax on American tech companies
It remains to be seen how Canada’s hike on US steel imports will affect the industry, which has been struggling for years (Pictured: Trump tours US Steel plant in West Mifflin, Pennsylvania, on May 30, 2025)
And because the tax is retroactive back to 2022, one tech lobbying group said American firms will soon have to pay up to $3 billion directly into Canada’s treasury.
Canada has not ruled out further action to strike back at Trump for ending negotiations, with the government saying it ‘remains prepared to take additional steps as needed.’
How Canada’s hike on US steel imports will affect the industry, which has been struggling for years, is yet to be seen.
US Steel Corporation, once one of the most valuable companies in the world, just merged with Japan’s Nippon Steel earlier this month after years of declining sales.
Canada remains the second largest trading partner of the US, despite all the trade turmoil.
Right now, the US has 25 percent tariff on Canadian imports that aren’t covered by the US-Mexico-Canada Agreement (USMCA), the trade deal Trump signed in his first term.
Canadian energy is exempt from the 25 percent rate but is still tariffed at 10 percent, as are most products that have entered the US since early April.
Canada is also hugely impacted by Trump’s 50 percent tax on steel and aluminum imports, as the country is largest foreign supplier of those materials to the US.
Canada is also hugely impacted by Trump’s 50 percent tax on steel and aluminum imports. Canada’s steel industry has laid off a staggering 1,000 workers since the first US tariffs in March (Pictured: Steel coils sit at a steel mill yard in Hamilton, Canada)
This comes as the US rapidly approaches Trump’s July 9 deadline to renegotiate trade with countries around the world so they can avoid so-called reciprocal tariffs (Pictured: Trump unveils
Canada’s steel industry has laid off a staggering 1,000 workers since the first US tariffs in March, Reuters reported.
It has also been impacted by the 25 percent duties Trump has levied on foreign-made vehicles and parts.
This comes as the US rapidly approaches Trump’s July 9 deadline to renegotiate trade with countries around the world so they can avoid so-called reciprocal tariffs.
Trump first announced the reciprocal tariffs on April 2, which he dubbed ‘Liberation Day.’
More than 60 countries were hit with import charges of as much as 50 percent. The announcement from the White House led to widespread market panic and falling bond values, which led to Trump enacting a 90-day pause on April 9.
Treasury Secretary Scott Bessent said early Friday that the pause could be extended to Labor Day – and that country-by-country tariffs could be negotiated down in that time.
Hours later, Trump echoed a similar sentiment. He said the initial July 9 deadline was not set in stone and could shortened or extended.
