Canada’s Prime Minister Justin Trudeau announced Monday that Canada will impose retaliatory tariffs on $12.6 billion worth of U.S. goods in response to President Donald Trump‘s steel and aluminum tariffs.

The strongest Canadian trade actions since World War II will go in place on July 1 and stay until the U.S. removes the steel and aluminum restrictions, according to Canada’s government. Canada will tax U.S. steel exports at a rate of 25%, and the rest of the goods will be taxed at a 10% rate. The list of goods includes among whiskey, washing machines, boats, orange juice, coffee, peanut butter and beer.

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Foreign Affairs Minister Chrystia Freeland framed the new trade barriers as a necessary evil to ensure Trump doesn’t think he can push around his neighbor without facing consequences. Freeland said on Friday, “We will not escalate — and we will not back down.” Freeland added, “Countless Canadians of many diverse political points of view agree with this approach. We will maintain the firm resolve to do so.”


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Canadian Innovation Minister Navdeep Bains announced an aid package worth $2 billion for the steel and aluminum industries and Employment Minister Patty Hajdu also announced temporary changes to employment insurance rules to allow workers in those industries whose hours are cut back due to the effects of the tariffs to continue to qualify for benefits. She also indicated the government is open to considering further support actions, if needed.

Canada’s tariffs will dramatically increase the price of the targeted U.S. goods in Canadian markets, dampening demand for them and hurting the bottom line of the U.S. companies that produce them. Biggest losers from the trade fight on the industrial side will be states like Ohio, Michigan, New York, Pennsylvania and Illinois.

According to reports, Trump has warned that retaliatory tariffs by Canada could be met by a further round of tariffs on auto parts. Freeland responded by telling a committee earlier this month that if Trump imposes further tariffs on auto parts, Canada’s response will be robust.

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