Trump slaps 50% tariffs on Canada and Carney vows to 'intensify' trade talks

US Imposes 50% Tariffs on Select Canadian Goods as Trade Talks Continue

US President Donald Trump has imposed a 50% tariff on a wide range of goods imported from Canada. The White House described the measure as a response to what it called unequal treatment of US cars, dairy and alcohol. The tariffs cover everyday consumer items such as wine and hockey sticks as well as industrial goods including cement. Energy products, potash, critical minerals and fish are excluded from the new duties.

Prime Minister Mark Carney stated that Canada was prepared to intensify trade talks with the United States in the coming weeks. The White House indicated the duties would take effect in 30 days. The action represents an escalation in trade tensions between the two countries that have continued since Trump returned to office in January 2025 and began applying tariffs on a broad range of imports.

Tariffs are taxes paid by companies on imported goods. The US Supreme Court earlier ruled that many tariffs imposed under emergency powers were enacted without proper legal authority. The current measures rely on a different statute that has not yet been tested in court.

Canada is one of the United States’ largest trading partners. In the previous year Canada applied a 25% tariff on approximately C$30 billion of US goods before later removing some of those duties. A White House fact sheet stated that the new tariffs apply even to products covered by the USMCA free trade agreement between the United States, Canada and Mexico.

Existing US tariffs on Canadian steel, aluminium and copper range from 15% to 50%. Additional duties include a 35% tariff on Canadian softwood lumber and a 25% tax on non-US parts in vehicles. Canada maintains a 25% counter-tariff on selected US steel, aluminium and vehicle imports.

The new tariffs follow earlier statements by Trump regarding Canadian wildfire smoke, though that issue was not cited as the basis for the current action. The executive order includes three proclamations detailing US concerns over trade in cars, dairy products and alcohol.

On motor vehicles, the proclamations note that Canada applies a tax on US imports not covered by the USMCA and does not apply a similar tax to other countries. Automotive production in North America is integrated across the three USMCA countries. On dairy, the proclamations reference Canada’s supply management system, which limits imports and applies tariffs up to 300% on volumes above set quotas. On alcohol, the proclamations address the continued restrictions on US beverages maintained by most Canadian provinces. Canadian provincial leaders have stated that these restrictions would end if US tariffs on metals and automobiles were removed.

Canadian negotiators have sought reductions in existing US tariffs. In February the Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act of 1977. The administration has since used other authorities, including Section 301 of the Trade Act of 1974, to apply tariffs on goods from countries including Brazil at a rate of 25% beginning Wednesday. Brazil has indicated it will respond with its own measures.

The tariffs on Canada are being implemented under Section 338 of the 1930 Tariff Act, which addresses trade discrimination. Michael Devereux, professor of economics at the University of British Columbia, said the action targets goods previously exempt under the USMCA agreement signed in 2018. He described the step as an escalation and expressed doubt that it was intended as a negotiating tactic, instead characterising it as an impulsive measure reflecting ongoing disagreements.

Candace Laing, head of the Canadian Chamber of Commerce, called for meaningful progress in talks before the 30-day period expires. Chris Swonger, head of the Distilled Spirits Council of the United States, urged both governments to reach a solution and noted the risk of additional retaliation.

The measures add to a series of tariff actions taken by the United States since January 2025. Canada has continued to participate in bilateral discussions while maintaining its own retaliatory tariffs on selected US products. Both governments have indicated they will continue negotiations on the disputed sectors.