Trade War Escalates: New Tariffs on Paper Products Between the United States and Canada

Last weekend, trade talks between the United States and Canada broke down, prompting Canadian Prime Minister Mark Carney to announce that Canada would match U.S. tariffs “dollar for dollar.” He unveiled a list of nearly 900 American goods slated for duties of 25% to 50% beginning September 8. The move follows a U.S. decision to raise tariffs on Canadian imports by 50%, igniting the first full-scale trade war between the two allies in decades.

The Guardian

Canada’s retaliation targets paper products, imposing tariffs of 25% to 50% on “toilet-paper or face-tissue stock.” Although many U.S. brands produce domestically, they rely heavily on Canadian lumber for raw material. The World Bank reports that the United States imported $328 million of toilet paper from Canada in 2024, making Canada the largest supplier of the product to the U.S. Retailers such as Costco source a substantial share of their paper goods from Canada. The United States consumes more than 20% of global tissue products despite representing only 4% of the world’s population; the average American uses 141 rolls of toilet paper per year, slightly ahead of Germany’s 134 rolls.

The Guardian

Prime Minister Carney framed the tariffs as a direct, dollar-for-dollar response to U.S. measures, emphasizing the need to protect Canadian producers. U.S. Trade Representative Jamieson Greer countered that the dispute will not harm American consumers, stating that “the fundamentals are good” and expressing confidence that the tariffs will have no material effect on U.S. markets.

The Guardian

Republican Senator Susan Collins of Maine, whose state is a hub for lobster fishing, labeled the U.S. tariffs on Canadian seafood a “mistake,” warning that the policy could backfire politically in his re-election bid. Additionally, former President Donald Trump justified the U.S. tariffs as retaliation for Canadian levies on American dairy, noting a 50% duty on most Canadian dairy products and a 25% duty on U.S. fish and seafood, including frozen lobster. Trump has warned that if a deal is not reached by January 1 2027, the United States may double the tariff on Canadian goods to 50%.

The Guardian

These developments illustrate how a dispute that began over dairy and liquor has broadened to include everyday consumer items, threatening higher prices for North American households and testing the resilience of the longest-standing bilateral trade relationship.

The Guardian