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The U.S. said Monday it will be imposing an additional 50 per cent tariff on Canadian imports due to retaliatory and “discriminatory” measures Canada took in response to U.S. President Donald Trump’s tariffs.
The new tariff will take effect in 30 days and will apply to goods covered by the Canada-U.S.-Mexico Agreement on free trade (CUSMA), according to the orders.
“Over the past year and a half, only two countries have chosen to retaliate against President Trump’s tariffs rather than negotiate a deal with the United States: the People’s Republic of China and Canada,” the White House said in a statement on the new tariff.
“President Trump’s tariffs have resulted in 18 deals opening new markets for U.S. exports and bringing reciprocity back to America’s trade relations. Yet Canada has elected to discriminate against the United States rather than address Canadian trade barriers.”
The tariff will be imposed under Section 338 of the U.S. Tariff Act of 1930, which allows a president to tariff goods from any country that “discriminates … against the commerce of the United States,” the act says.
The statute has never been used for this purpose before, a senior administration official told reporters on background.
Only energy products, critical minerals, potash, fish, and goods already facing Section 232 tariffs like steel, aluminum and autos will be exempt.
The lists of goods subject to the new tariff covers Canadian alcohol, dairy and agricultural products, as well as furniture, paper, hockey sticks and other gear, cement, clothing and textiles.
“This is not a trade war,” the official said. “These are defensive measures taken to remedy discriminatory actions by Canada.”
In a statement, Prime Minister Mark Carney said Canada, “as is its right,” had “merely matched” Trump’s auto tariffs with its own retaliatory duties.
“More broadly, in response to these measures and threats to Canadian sovereignty, provinces, territories, and Canadians from coast to coast to coast have stood together, taking the necessary actions to support our economy and defend our workers, farmers, businesses, and families,” Carney said.
“This trade dispute has raised costs for families, particularly in the U.S. Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens.”
Carney did not specifically say whether his government would retaliate over the threatened tariff or remove any of the measures targeted by Trump.
“In all circumstances, Canada will work relentlessly and take any measures necessary to build our strength at home and to support Canadian workers, farmers, businesses, and families,” he said.
Tariff further upends trade talks
The new tariff comes after the U.S. declined to renew CUSMA for another 16 years at a scheduled review earlier this month. The trilateral trade pact will now be subject to annual reviews, and will expire in 2036 unless it’s renewed in the future.
Trump administration officials have cited the U.S. alcohol boycotts, which were enacted last year after Trump began tariffing Canada and Mexico to spur actions to combat fentanyl trafficking, as a major irritant in CUSMA and bilateral trade talks.
While Alberta and Saskatchewan dropped their bans last summer, the other provinces and territories have upheld them, defending the actions as appropriate given Trump’s attacks on Canadian trade and sovereignty.
Ontario Premier Doug Ford said this month that the “fastest and only way to get U.S. alcohol back on Ontario shelves is for the U.S. to drop its illegal tariffs on Canada,” after U.S. Republican Congresswoman Claudia Tenney introduced legislation seeking to punish Canada for the boycotts.
Ford said Monday in a social media post on X that, if the new U.S. tariff goes ahead, “Canada should respond tariff for tariff, dollar for dollar.”
“I’ll never stop fighting to protect Ontario,” he wrote.
Carney also defended the bans when pressed by reporters in April, while noting they were decisions made by provinces and territories rather than Ottawa.
“You know what’s an irritant? Fifty per cent tariffs on steel, 50 per cent tariffs on aluminum, 25 per cent tariff on automobiles, all the tariffs on forest products,” he said.
“Those are more than irritants. Those are violations of our trade deal.”
Canada’s supply management system for its dairy sector has long been a target of Trump’s anger over Canadian trade, but Ottawa — at Quebec’s urging — has defended the quota system.
Carney has said the issue was not on the table for CUSMA negotiations.
“Any weakening (of supply management) is non-negotiable,” Quebec Premier Christine Frechette posted in French on X. “We will defend it without compromise.”
Frechette called the threatened tariff “unjustified and concerning,” adding now was “the worst time to add a layer of instability to Quebec’s economy.”
Carney is set to meet with premiers at an in-person meeting in Charlottetown on Thursday, where the new tariff threat is now expected to dominate the discussion. Frechette said she would raise the issue with Carney at the meeting.
Conservatives blasted Trump’s tariff threat but also took at aim at Carney and the Liberal government for not negotiating with more urgency.
“Canadians are not a punching bag,” Conservative MPs Shuvaloy Majumdar, Eric Duncan, Stephanie Kusie and Pierre Paul-Hus said in a joint statement.
“President Trump is wrong to target Canadian workers and must reverse these tariffs immediately. And Mark Carney was wrong to surrender Canada’s leverage for over a year and a half, without actually working to secure the deal he promised.”
Earlier Monday, Carney said he spoke with Trump about trade on Sunday when the two were together at the FIFA World Cup final match in New Jersey.
“The president and I had a conversation more broadly strategically about trade and where that’s going,” he said.
The Trump administration official, however, told reporters that Trump did not raise the possibility of the new tariff with Carney on Sunday.
The official said trade talks are ongoing with Canadian officials but noted “we’re not in a formal negotiating stage at this point,” with no timeline in place for that process to begin.
U.S. negotiations with Mexico, meanwhile, have been progressing since earlier this year.
The official added that the new tariff is not related to the tariffs Trump threatened this weekend on Canada over wildfire smoke that has crossed into the U.S.
Trump has “asked for options on that,” the official said.
The Canadian Chamber of Commerce called the new tariff threat “a regrettable escalation” by the U.S., but expressed confidence that discussions between the two countries may lead to a resolution before the 30-day window closes.
“We knew this would get bumpier before landing,” president and CEO Candace Laing said in a statement, adding the business group has warned the federal government about the possibility of Section 338 tariffs.
“Both sides need to use this window to make meaningful progress in advancing formal talks. There are important discussions to get to that will strengthen not threaten our shared prosperity.”
—With files from Global’s Reggie Cecchini and the Canadian Press