The Trump administration moved to reimpose 10 percent tariffs on some Canadian aluminium products to protect US industry from a "surge" in imports.
Ottawa will hit American aluminium products with US$2.7 billion (Can$3.6 billion) in counter-tariffs, Deputy Prime Minister Chrystia Freeland said on Friday, in response to "absurd" US levies announced on Canadian goods.
US President Donald Trump said on Thursday he was reimposing a 10 percent tariff on Canadian aluminium, accusing Canada of flooding the US market with the metal.
"In imposing these tariffs, the United States has taken the absurd decision to harm its own people," Freeland told a news conference.
Ottawa, the deputy prime minister said, will hold 30 days of consultations with Canadian industry on which US items to target with tariffs.
A preliminary list published by the Canadian government includes soda and beer cans, bicycles, golf clubs and washing machines.
Freeland commented that a trade war in the midst of the pandemic would be devastating to both countries, and urged the Trump administration to reconsider its move.
"A trade dispute is the last thing anyone needs," she said. "It will only hurt the economic recovery on both sides of the border."
No longer an effective alternative
The US tariffs, which take effect August 16, are in response to what Washington called a 27 percent "surge" in aluminium imports from Canada over the past year which "threatens to harm domestic aluminium production."
"I have determined that the measures agreed upon with Canada are not providing an effective alternative means to address the threatened impairment to our national security from imports of aluminium from Canada," Trump said in his proclamation.
Ottawa has long rejected the national security concerns coming from a close ally, and Freeland on Friday doubled down, calling the notion "ludicrous."
Canada cries foul
The Canadian aluminium industry, meanwhile, disputed the US data, saying shipments to the US actually fell in recent months.
It noted also that the United States consumes six times more aluminium than it produces and so relies on imports.
"At a time when its economy is suffering the deepest crisis since the Great Depression, any American who buys a can of beer or soda or a car or a bike will suffer," Freeland warned, taking aim at the US levy.
"In fact, the very washing machines manufactured at the Whirlpool plant (in Clyde, Ohio) where the president made his announcement yesterday, will become more expensive for Americans and less competitive with machines produced elsewhere in the world as a result of these tariffs."
READ MORE: US reimposes Canadian aluminium tariffs
The list of goods subject to tariffs is narrower than the last time Ottawa struck back at Trump because the two sides agreed in 2019 to limit the scope of retaliation in disputes over steel and aluminium, said a Canadian government source who requested anonymity.
In 2018, Ottawa slapped tariffs on $12.5 billion (C$16.6 billion) worth of goods ranging from bourbon to ketchup after Washington imposed sanctions on Canadian aluminium and steel.
Ottawa may be calculating its measures will be short-lived. A source briefed by Prime Minister Justin Trudeau's office said Canadian officials are increasingly sure Trump will lose the November 3 presidential election.
Trump acted just weeks after a new continental trade pact between the United States, Canada and Mexico took effect.
The North American economy is highly integrated and Canada sends 75 percent of all its goods exports to the United States.