Canada Upholds 25% Retaliatory Tariffs on Most US Goods, Heightening US-Canada Trade Dispute and Supply Chain Volatility
Canada has confirmed the continuation of its 25% retaliatory tariffs on most US goods, impacting approximately C$42 billion (US$30.1 billion) in imports. The move comes as a direct response to recent US-imposed tariffs on Canadian and Mexican products, escalating ongoing trade tensions despite the North American trade agreement. Finance Minister François-Philippe Champagne clarified that about 70% of these counter-tariffs, initiated in March, remain active, with exemptions only for goods critical to health, public safety, or national security. Notably, automobiles are excluded from the tariffs, though some auto imports receive temporary waivers to support the domestic manufacturing sector. The government emphasized that any tariff suspension remains narrow, focusing on sectors vital to manufacturing, processing, and food and beverage supply chains. This firm policy stance aligns with Prime Minister Mark Carney’s commitment to defending Canadian interests amid rising US-Canada trade friction. The persistence of these trade barriers continues to inject uncertainty into cross-border supply chains and major industries, a factor closely watched by financial and crypto market participants, as macroeconomic instability may trigger volatility and risk-off sentiment in risk assets.
Neutral
The persistence of US-Canada trade tensions through continued tariffs may raise uncertainty in North American economic relations. This could contribute to increased volatility in equity and crypto markets, especially if supply chains or major industries are further disrupted. However, since no direct measures target the cryptocurrency sector and the news primarily concerns traditional trade dynamics, the immediate impact on digital asset prices is expected to be neutral. Traders should monitor for any escalation or macroeconomic ripples that may shift market sentiment toward risk assets.