Washington D.C. (Rajeev Sharma): U.S. President Donald Trump signed an executive order on Thursday increasing tariffs on Canadian goods from 25% to 35%, targeting all products not covered under the U.S.-Mexico-Canada Agreement (USMCA). The new rates will take effect on August 1, the White House confirmed.
“In response to Canada’s continued inaction and retaliation, President Trump has determined it is necessary to increase the tariff on Canada from 25% to 35% to effectively address the existing emergency,” the White House said in a statement.
Additionally, a 40% transshipment levy will be applied to goods routed through third countries in an attempt to bypass the tariffs, according to a White House fact sheet.
The move comes after Trump accused Ottawa of failing to resolve key trade disputes. “We haven’t spoken to Canada today. [Prime Minister] Carney has called, and we’ll see,” Trump told reporters at the White House before signing the order.
Canadian Prime Minister Mark Carney has previously described trade discussions with Washington as “constructive,” but admitted that a final deal to remove all U.S. tariffs before the August 1 deadline was unlikely.
Earlier on Thursday, Trump suggested that Canada’s decision to move toward recognising Palestinian statehood had further complicated negotiations. Writing on Truth Social, he said: “That makes it hard for [us] to make a trade deal with them.” However, he later clarified that the issue was “not a deal breaker,” adding, “They have to pay a fair rate – that’s all. They’ve been charging our farmers very high tariffs, some over 200%, and treating them very badly.”
Trump insisted that while he has “great love for Canada,” the country has “treated the U.S. very badly for years.”
U.S. Commerce Secretary Howard Lutnick said the President could revisit the tariff hike if Carney “starts turning on the charm and if he takes off his retaliation.” As of Friday morning, Canada had not announced any countermeasures.
