if the united states wants to levy taxes on it's own citizens, it has every right to do that. all evidence at this point is that donald trump legitimately doesn't understand how tariffs work or who pays for them.
canada should not respond to the provocation, except in the sectors where supply chains are cross border, where it should ensure that the duties are reciprocal, whatever they are.
canadian industry should rather develop a marketing campaign to present canadian imports to the united states as of higher quality than american goods, and present the higher price as paying a premium for a premium good. it might be silly, but it will probably work. low profit from high volume should be replaced with high profit from low volume, via higher markups.