Canada Plans Loans, Expanded Unemployment Aid to Counter US 50% Tariffs, Weighs Retaliation

Canada is preparing support measures including loans for affected businesses and expanded unemployment benefits in response to the US decision to impose 50% tariffs.

Bloomberg reported on Aug. 24 that Finance Minister François-Philippe Champagne and other senior ministers were set to announce the measures at a news conference that day. The package is aimed at supporting Canadian workers and companies hit by the US tariffs.

The plan includes broader unemployment benefits and a loan program for businesses harmed by the tariffs. Ottawa plans to advance the effort under a "One Canadian Economy Agenda," using an approach similar to the economic support measures rolled out during the Covid-19 pandemic.

The US began imposing 50% tariffs on Aug. 22 on about $20 billion of Canadian goods exported annually to the US market. In response, Prime Minister Mark Carney said Canada would impose retaliatory tariffs on steel, dairy products, home appliances, agricultural equipment, pulp and paper, and electronics.

Still, the Canadian government is also considering a more targeted response rather than the full "dollar-for-dollar" retaliation it had initially signaled. Carney said on Aug. 24 that matching the US tariff-for-tariff at all times is difficult because the US economy is much larger than Canada's. Ottawa may choose a more selective approach, though Carney stressed that all options remain on the table.

The US has also warned of additional tariffs. President Donald Trump said he could further raise tariffs on Canadian-made cars and auto parts if Canada goes ahead with retaliatory duties. That has heightened the risk that the tariff dispute will spread to major industries including autos.