US-Canada tariffs escalated early Saturday as Washington imposed 50% duties on about $20 billion of Canadian goods, raising the risk of higher costs for paper products, alcohol and dairy.
The new measures followed the collapse of last-minute trade negotiations on Friday. Canadian Prime Minister Mark Carney said Ottawa would respond with dollar-for-dollar tariffs beginning September 8.
US businesses importing affected Canadian products can absorb the levy, suspend purchases or seek alternative suppliers.
However, switching suppliers may also increase costs because Canadian products often benefit from shorter transport routes and established supply chains.
Read: US-Canada Tariffs Hit 50% as Trade Talks Collapse
Paper and wood products covered by the new tariffs include parchment paper, paper cups and plates, kraftliner used in cardboard boxes, and dozens of plywood categories.
Those broader categories accounted for about $1.5 billion in US imports from Canada last year, according to US trade data.
Wine, beer and spirits are also affected. The United States imported about $1.5 billion of those products from Canada last year, the same data showed.
Read: Trump Threatens Higher Canada Tariffs Over Wildfire Smoke
Canadian dairy products, including milk, cheese, butter and whey, are also covered. US purchases of Canadian dairy totalled about $780 million last year, according to the cited trade figures.
The existing pressure from higher energy and transportation costs could leave businesses with less capacity to absorb the new tariffs, increasing the likelihood that some of the costs will be passed on to consumers.
