WASHINGTON, D.C. — President Donald Trump has escalated trade tensions with Canada by increasing tariffs on Canadian imports from 25% to 35%, citing Canada’s failure to adequately address illicit drug trafficking. The new tariff rate takes effect Friday, according to a White House statement issued Thursday night.
Tariffs Spark Diplomatic Tensions
The White House accused Canada of not doing enough to intercept drug traffickers, detain criminals, and reduce the flow of illicit substances — a concern Trump has raised multiple times over recent months. The administration expressed frustration over Ottawa’s limited enforcement actions, particularly in regard to fentanyl trafficking.
Trump had previously warned that if a deal wasn’t reached with Canada by Friday’s deadline, punitive tariffs would follow. The president has also publicly mocked Canada, even joking that it should become the 51st U.S. state.
📉 Trade Talks Complicated by Foreign Policy Moves
Adding to the friction, Trump said Canada’s recent decision to recognize a Palestinian state made it more difficult to finalize a trade agreement between the two nations.
Prime Minister Mark Carney pushed back, stating that any deal would need to serve the best interests of Canadians. Following Trump’s announcement, Carney expressed disappointment and noted that Canada accounts for just 1% of U.S. fentanyl imports.
“We’ve been working intensively to reduce even that small share,” Carney said in a statement Friday morning.
🚗 Key Industries Could Be Hit Hard
The Canadian Prime Minister acknowledged that industries such as lumber, steel, aluminum, and automobiles are most vulnerable to the tariff hike. He emphasized that the government will implement measures to protect Canadian jobs and minimize economic fallout.
📜 USMCA Still Offers Some Protection
Some Canadian exports remain shielded under the existing United States-Mexico-Canada Agreement (USMCA), signed in 2020. However, that trade pact is up for renegotiation next year, which could further complicate relations.
The White House clarified that goods transshipped through Canada, not covered under USMCA, will now face a 40% tariff rate. The origin of these goods was not specified.
📆 New Tariff Schedule for Other Nations
Canada was notably absent from Trump’s broader update to global tariff rates released late Thursday. Those new import duties, affecting various countries, are set to take effect on August 7.
