There’s no doubt the levies will have an impact both economically and politically, particularly in battleground states such as Michigan, Ohio and Iowa
Ottawa says new counter-tariffs on American goods are primarily designed to protect Canadian companies’ domestic market share. But with November’s U.S. midterm elections looming, there’s no doubt the levies will have both an economic and political impact south of the border, particularly in battleground states (think Michigan, Ohio and Iowa).
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“I think that’s very intentional,” said Inu Manak, a senior fellow at the Peterson Institute for International Economics in Washington, D.C. “It’s to draw attention to this issue, make politicians in the United States talk about it, because I think there has been some frustration among a lot of U.S. trading partners that there’s silence from Congress on a lot of these issues.”
With Canada’s $27.6 billion in counter-tariffs set to take effect in less than a week, here’s a look at which industries and states could feel the most economic pain.
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On Sept. 8, Canadian counter-tariffs on certain steel, aluminum and iron products from the U.S. will increase from the current rate of 25 per cent to 50 per cent. The new levies would apply to hundreds of derivative products used in construction, manufacturing, vehicles, machinery, equipment and consumer products.
In general, states that have a lot of automotive and industrial manufacturing will be hurt the most because those sectors are highly integrated across Canada and the U.S., Manak said.
“Looking at Ohio, Michigan, Indiana, and Pennsylvania, these are areas where you have iron and steel production,” she said.
Those four states were the top U.S. exporters of iron, steel and ferroalloy to Canada in 2025, with a combined US$2.6 billion — about half of all steel exported to Canada.
