Canada pledges retaliation after Trump's 50% tariff plan

Canada signalled a forceful response on July 21, 2026 after President Trump proposed a 50% tariff on certain imports, officials said. Markets have not yet shown a clear reaction to the proposal.

Canada references Section 338

Officials said Ottawa called the proposal "a direct violation" and has opened a review of Section 338 import taxes as part of its initial response. The review will determine which goods and tariff lines could be subject to reciprocal duties, officials said.

Officials warned the plan would raise consumer prices on both sides of the border and said federal ministries are coordinating to map immediate and longer-term options. That coordination, officials said, includes trade, finance and industry departments assessing duty schedules, exemptions and potential countermeasures.

The development increases the risk of a swift escalation in bilateral trade measures; officials said Canada may use retaliatory tariffs and other trade remedies if the proposal advances. Business groups and supply-chain managers are watching for moves that could alter cross-border flows of autos, food and intermediate goods.

Officials said Ottawa aims to conclude its assessment within a week; watch for a formal reply by July 28, 2026.