US President Donald Trump has signed an executive order raising tariffs on Canadian goods from 25% to 35%, effective Friday. The move, described by Canadian Prime Minister Mark Carney as 'disappointing', escalates trade tensions between the two nations.
The new rates apply to all products not covered by the US-Mexico-Canada Agreement, with a 40% levy on goods transshipped to evade tariffs. The White House cited Canada's failure to address fentanyl flows as justification, though Ottawa notes only 1% of US fentanyl originates from Canada.
Carney vowed action to protect Canadian jobs and diversify exports, stating that Canada would continue negotiations but also focus on reducing internal trade barriers. He reiterated that a deal removing all US tariffs remains unlikely.
Commerce Secretary Howard Lutnick suggested Trump could reconsider if Carney 'starts turning on the charm' and drops retaliation. Canada sends about 75% of its exports to the US, leaving it economically vulnerable, according to economist William Huggins.
