In a significant escalation of cross-border trade tensions, U.S. President Donald Trump on Thursday signed an executive order raising tariffs on Canadian imports from 25% to 35% for goods not covered under the U.S.-Mexico-Canada Agreement (USMCA). The White House stated the move is a direct response to Canada’s “continued inaction and retaliation” in ongoing trade discussions.
The executive order also introduces a 40% transshipment levy aimed at goods rerouted through third countries to circumvent the new tariff structure. According to a fact sheet released by the White House, the new tariffs take effect immediately.
This latest development follows Trump’s public comments earlier in the day, where he noted that Canadian Prime Minister Mark Carney had attempted to reach out ahead of the August 1 deadline but confirmed no direct conversation occurred.
“We haven’t spoken to Canada today,” Trump told reporters during a White House event. “He’s (Carney) called, and we’ll see.”
Carney’s office has yet to issue an official response.
While Prime Minister Carney previously described trade talks with the U.S. as “constructive,” he acknowledged that a comprehensive deal eliminating all U.S. tariffs was unlikely by the deadline. He added that discussions had entered a “critical phase” but offered no firm timeline for resolution.
Earlier Thursday, Trump signaled his frustration with Ottawa’s foreign policy shift, specifically Canada’s recent move toward recognizing Palestinian statehood. He labeled it a “complicating factor” but stopped short of calling it a deal-breaker.
“They’ve been charging our farmers over 200% in some cases,” Trump said, doubling down on his long-standing complaints. “I love Canada, but they’ve treated the U.S. very badly for years.”
U.S. Commerce Secretary Howard Lutnick hinted that the new tariffs could be revisited if Canada eases its retaliatory measures and engages in more conciliatory talks.
As of now, the 35% tariff stands, heightening economic uncertainty for businesses on both sides of the border and leaving the fate of Canada–U.S. trade relations hanging in the balance.
