More than 400 workers are set to be affected by the temporary closure of a manufacturing plant in Canada that the company has blamed on the tariff dispute between the United States and Canada.

The American paperboard manufacturer RYAM said it is closing its facility in Témiscaming, Quebec, as a direct result of U.S. tariffs. Operations will shut down on September 15, with 425 workers impacted by the closure.

Newsweek has contacted the company via email for comment.

“This decision is the result of a business environment that has become unsustainable, making continued operations simply no longer economically viable,” a spokesperson for the company said, according to an email seen by the local news outlet North Bay Nugget.

“Despite all the efforts we have made to adapt to this new reality, the magnitude of the tariffs, no longer allows us to operate the site under sustainable conditions.”

Témiscaming Mayor Alain Gauthier, who previously worked for the company, told Canadian news outlet CTV News that the tariffs were a “nuclear bomb” for sectors that rely on U.S. markets, and described the situation as an “economic war.”

Trade tensions between the U.S. and Canada have escalated sharply after negotiations regarding a new trade agreement broke down over the past fortnight.

The Trump administration imposed tariffs of up to 50 percent on $27.6 billion worth of Canadian goods on August 22, targeting products including agricultural goods, manufactured products and consumer items. That was on top of existing U.S. duties affecting sectors such as steel, aluminum and automobiles.

Canadian Prime Minister Mark Carney subsequently suspended the negotiations, saying the terms sought by Washington were not in Canada’s interests, and Ottawa has announced a dollar-for-dollar response.

U.S. vs. Canada Trade War

The ongoing trade dispute has strained relations between the United States and Canada since President Donald Trump returned to the White House in January 2025.

The latest round followed the collapse of negotiations aimed at easing tariffs between the two countries. The U.S. imposed tariffs of 50 percent on $27.6 billion worth of Canadian goods on August 22, measures Washington said are intended to counter what it considers discriminatory Canadian treatment of American exports.

U.S. Trade Representative Jamieson Greer previously said Canada had restricted American alcohol products, provided preferential dairy access to the European Union and limited some U.S. vehicle exports.

“While the administration continues to secure fair and reciprocal trade deals with our trading partners, Canada, unlike other partners and allies, continues to retaliate against the United States for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors,” Greer said.

The White House blamed Canada for the breakdown in negotiations, saying in an August 25 statement that Ottawa had chosen “unreasonable demands, walk-backs, and flat-out rejection.” It said Trump had offered Canada preferential access to the U.S. market, including proposed reductions in tariffs affecting steel, aluminum, autos and lumber.

Carney said in remarks on August 22 that Canada had been willing to remove its remaining retaliatory tariffs on steel, aluminum and automobiles if the U.S. substantially reduced its own duties. However, he said Washington subsequently proposed terms that were “uneconomic, unfair” and would have undermined the benefits of an agreement for Canada.

Ottawa has since announced it will match the latest U.S. measures “dollar for dollar, rate for rate.” Beginning September 8, Canada will impose tariffs of 15 percent, 25 percent and 50 percent covering $27.6 billion worth of U.S. imports, including steel, dairy products, appliances, agricultural equipment, pulp and paper and electronics, according to the Canadian Department of Finance. The government also announced a $7.5 billion package of additional support for Canadian workers and businesses affected by the tariffs.

“We take this step reluctantly,” Carney said of the retaliatory tariffs. “Reluctantly, because we recognize that it will raise costs and reduce choice for Canadians. Reluctantly, because we recognize that some U.S. companies and states are innocent bystanders in a dispute they did not want. Reluctantly, because this trade dispute is preventing Canada and America from doing so much good that we could do together.”

The confrontation is the latest stage of a dispute that began within weeks of the start of Trump’s second term. In February 2025, the White House announced an additional 25 percent tariff on most Canadian imports and a 10 percent tariff on Canadian energy products, initially framing the measures as a response to illegal migration and fentanyl entering the United States. Canada responded with its own tariffs.

The trade dispute has unfolded alongside a wider deterioration in political relations between the neighbors. Before taking office, Trump repeatedly suggested that Canada should become the 51st U.S. state and in January 2025 declined to rule out using “economic force” to pursue the idea.

Then-Canadian Prime Minister Justin Trudeau rejected the suggestion, saying there was “not a snowball’s chance in hell” that Canada would become part of the U.S.

This week, Trump signed an executive order to rename Lake Ontario as Lake America, drawing ire from across the border.

“We have recognized from the beginning that America has changed,” Carney said in an August 21 statement, “and that we will not return to our old relationship.”