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Canada’s decision to impose counter-tariffs of up to 50 per cent on roughly $28 billion worth of American goods is expected to push up prices for Canadian consumers — including on products made entirely within Canada. Economists and trade experts warn that the ripple effects of these measures will spread well beyond imported U.S. goods, touching everyday items from groceries to clothing and raising the cost of doing business across multiple industries.
Why Canadian Prices Are Expected to Rise
Tariffs increase the cost of importing goods. As businesses absorb those higher costs, many will pass them on to customers through higher prices. Joseph Steinberg, an economics professor at the University of Toronto, explains that the pressure will eventually reach domestic producers as well.
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“Eventually, the costs of domestic products are going to start to rise,” Steinberg said. “The cost of doing business for Canadian firms goes up, and eventually some of them are going to have no choice but to raise their own costs. So we’re going to see the prices of Canadian products go up.”
Canada introduced these counter-tariffs in direct response to U.S. President Donald Trump imposing 50 per cent tariffs on hundreds of Canadian products last month. Those U.S. tariffs targeted sectors including dairy, alcohol and automotive goods. Canada’s retaliatory measures now affect a broad range of American imports in return.
Which Products Face the Biggest Impact
John Boscariol, a partner at McCarthy Tétrault and co-head of its international trade and investment law group, says food and beverages top the list of affected categories. “Ingredients going into food and beverage products — we know dairy products are on the list, on both countries’ lists,” he said.
Boscariol also flagged home appliances as another area of concern. He added that further rounds of retaliation from either side could expand the impact even further.
Among the hundreds of U.S. goods now subject to counter-tariffs, consumer products include American dairy items, seafood, wooden furniture, beauty and cosmetic products such as perfume and sunscreen, and a wide range of clothing. Textiles affected include men’s suits, t-shirts, dresses, tracksuits, ski suits and even protective clothing such as hazardous material suits.
In addition, U.S. steel, aluminum and copper products now face a 50 per cent counter-tariff, raised from the previous 25 per cent. This covers steel rods, bars and sheets, as well as prefabricated structures such as bridges, towers, scaffolding and door and window frames. Aluminum products including wires, bars, rods and foil also fall under the higher rate.
Hidden Costs: Intermediate Goods and Manufacturing
Beyond visible consumer products, Steinberg highlights a less obvious but significant category: intermediate goods. These are materials and components that consumers rarely buy directly, but that manufacturers rely on throughout their supply chains.
Counter-tariffs of 15 to 25 per cent now apply to U.S. tower cranes, forklift trucks, jacks and hoists, lawn mowers, rail locomotives, train parts and railway maintenance vehicles. Smaller industrial components such as pumps, compressors, fans, insulating conductors and networking parts also face new duties.
“You and I don’t buy construction machinery parts or insulated conductors, but many Canadian businesses do,” Steinberg said. “That’s going to raise the cost of doing business for lots of different types of Canadian firms — manufacturers and agricultural firms in particular.”
He also warned about the longer-term economic damage. “The longer this goes on, the more it’s going to reduce our economy overall,” he said.
Canadians Willing to Pay More, Poll Suggests
Consumer patriotism has grown steadily in Canada since the United States launched its broader trade dispute and President Trump repeatedly suggested Canada should become the “51st state.” However, the counter-tariffs now risk making Canadian-made products more expensive — the very goods many consumers have been choosing to support.
“The products at the grocery store that are made in Canada — their prices are going to go up as a result of these retaliatory tariffs,” Steinberg said. “Eventually, that’s going to make it harder, or at least more costly, for Canadians to double down on buying Canadian.”
Despite that concern, a new Angus Reid Institute poll released Tuesday suggests most Canadians remain willing to absorb some financial pain. The poll surveyed roughly 1,500 Canadian adults between September 3 and September 4. It found that 60 per cent of respondents — three in five — said they would accept paying 10 to 20 per cent more for household expenses, including groceries and clothing, if it meant maintaining Canada’s current negotiating position.
Boscariol, meanwhile, called for both sides to return to the negotiating table. “No one wants to see continuing rounds of additional duties or trade measures that harm consumers on both sides of the border,” he said. “It’s counterproductive for consumers, processors and manufacturers. It’s in the best interests of both parties to come to the negotiation table and hammer something out.”
He also noted that consumers are likely to become more cautious with their spending in the near term. “All signs point to increasing costs,” he said. “Consumers are going to be pretty conservative over these next days and weeks when they think about their spending.”
