On Monday, President Trump added new 50 percent tariffs on a slate of Canadian goods, adding more pressure on one of the United States’ top trading partners and further straining a once close alliance. The move by Mr. Trump was a significant escalation of the trade war between Canada and the United States that he started well over a year ago.
Theses tariffs, as well as those that came before them, violate the trade agreement that United States, Canada and Mexico signed during Mr. Trump’s first term.
While Mr. Trump threatened to bring tariffs against Canada last week over wildfire smoke that was crossing the border, he has not linked the new tariffs to that. Rather, his administration is using an obscure, never tested piece of trade law to penalize Canada, in the view of the administration, for discriminating against the United States.
Canada’s prime minister, Mark Carney, said most of the measures that had drawn Mr. Trump’s ire were introduced in response to tariffs the president imposed on Canada in April 2025.
“Canada, as is its right, has merely matched those measures,” Mr. Carney said.
Why did the U.S. impose more tariffs?
Mr. Trump has three broad complaints. He’s angered by a 25 percent tariff Canada put on cars and trucks from the United States after the U.S. administration applied similar tariffs on exports from Canadian auto plants.
Both countries adjust those tariffs. The United States gives credit for cars containing American parts. Canada has set quotas for companies that make autos in the country allowing them to ship tariff free to Canada.
The president also claims that European cheese makers are allowed to import more products to Canada tariff-free than their American dairy counterparts, because of a trade deal between the governments.
And he’s angry that eight of 10 provinces have pulled American beer, wine and spirits from the shelves of government-owned liquor stores.
What will now be hit by 50% tariffs?
Despite Mr. Trump’s complaints about the Canadian auto tariffs, he left the U.S. tariff on Canadian cars and trucks at 25 percent. Auto parts, in theory, face a 25 percent tariff, but it is suspended provided they meet the definition of North American products under the United States-Mexico-Canada Agreement Mr. Trump signed in 2020.
The administration instead came up with a long and somewhat eclectic list of Canadian exports that it estimates will involve about $20 billion in Canadian exports.
Perhaps the most worrying aspect from Canada’s perspective are several tariffs on plywood, particle board and paper products. Mr. Trump earlier battered Canada’s forestry industry, which relies heavily on exports to the United States, by adding to existing tariffs on most softwood lumber. The United States has targeted most softwood lumber with tariffs for decades.
Many dairy products are on the list, but Canada’s domestically oriented dairy industry imports considerably more products than it sells to to the United States and other countries. Several alcohol products appear, as do many types of clothing, including men’s suits.
The list includes many items that are most likely not major exports, including “Wigs (partial), false beards, eyebrows and the like, of synthetic textile materials.”
Unless Mr. Trump changes his mind, the United States will begin collecting the tariffs by Aug. 19.
Are the tariffs legal?
Mr. Trump is imposing the tariffs under a long-unused statute, Section 338 of the Tariff Act of 1930, which allow him to impose tariffs of up to 50 percent on countries that have taken discriminatory trade measures against the United States. The bill also introduced high tariffs that exacerbated the collapse of global trade during the Great Depression. Several legal experts expect a challenge in American courts.
Trade lawyers agree with Mr. Carney that the president’s latest move violates the U.S.M.C.A. trade deal, as do Mr. Trump’s earlier tariffs. But using its system for resolving disputes is a drawn-out process, and it’s not clear that Mr. Trump would accept any decision rejecting his tariffs. The World Trade Organization does not offer a rapid solution either, and Mr. Trump has often refused to abide by it.
How has Canada responded?
Mr. Carney’s approach has been one of measured defiance.
After speaking with Mr. Trump on Tuesday, the prime minister said that the two countries had agreed to “to intensify negotiations in the coming weeks.”
Mr. Carney said that he would consult the provinces on how to proceed.
Doug Ford, the premier of Ontario, the most populous province, and David Eby, his counterpart in British Columbia, both ruled out returning American products to their government-run liquor stores without a new trade deal. Mr. Ford suggested on Tuesday that Canada could cut off energy supplies to the United States.
What’s next?
While the United States held several formal talks leading up to a July 1 deadline to renew the U.S.M.C.A. for 16 years, there have been no formal negotiations with Canada since last autumn. Canada appeared to be on the verge of a deal on steel and aluminum until Mr. Ford’s provincial government ran a TV commercial in the United States featuring clips of President Ronald Reagan speaking against tariffs.
While the United States and Mexico have been holding talks, nothing is yet on the agenda for Canada.
