President Trump has imposed a new round of 50% tariffs on a range of Canadian goods, adding further strain to relations with one of America’s largest trading partners and marking a significant escalation in a trade dispute he first launched more than a year ago, says the NY Times.
These new tariffs, like those that preceded them, run counter to the trade agreement the United States, Canada and Mexico signed during Trump’s first term. While Trump had threatened tariffs against Canada last week over wildfire smoke drifting across the border, he has not tied the latest measures to that issue.
Instead, his administration is relying on an obscure and previously untested provision of trade law to penalize Canada for what it views as discriminatory treatment of the United States.
Canadian Prime Minister Mark Carney said most of the measures that drew Trump’s criticism were introduced in direct response to tariffs Trump imposed on Canada back in April 2025. “Canada, as is its right, has merely matched those measures,” Carney said.
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Trump’s grievances center on three main issues. He has objected to Canada’s 25% tariff on American-made cars and trucks, which was imposed after the U.S. applied similar tariffs to vehicles produced at Canadian auto plants. Both countries have adjusted those tariffs over time: the U.S. offers credits for vehicles containing American-made parts, while Canada has established quotas allowing certain automakers to ship vehicles tariff-free into the country.
Trump has also claimed that European cheese producers benefit from more favorable tariff-free access to the Canadian market than their American counterparts, due to a separate trade agreement between Canada and Europe. Additionally, he has expressed frustration that eight of Canada’s ten provinces have removed American beer, wine and spirits from government-run liquor store shelves.
Despite his complaints about Canadian auto tariffs specifically, Trump left the existing 25% U.S. tariff on Canadian cars and trucks unchanged. Auto parts technically remain subject to a 25% tariff as well, though that tariff is suspended for parts meeting the definition of North American-made products under the 2020 trade agreement Trump himself signed.
Instead, the administration compiled an extensive and somewhat unusual list of Canadian exports now subject to the new tariffs, together representing an estimated $20 billion in Canadian trade.
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Among the most concerning items from Canada’s perspective are tariffs on plywood, particle board and various paper products, building on earlier tariffs Trump imposed on Canada’s softwood lumber industry, a sector heavily dependent on U.S. exports and one that has faced American tariffs for decades.
The list also includes numerous dairy products, despite Canada’s dairy industry being largely domestically focused and importing more than it exports, along with various alcohol products and clothing items, including men’s suits. Some entries on the list appear to cover relatively minor export categories, including specific types of synthetic wigs, false beards and eyebrows.
Barring a reversal from Trump, the U.S. is set to begin collecting these tariffs by August 19.
The legal basis for the tariffs rests on Section 338 of the Tariff Act of 1930, a rarely invoked statute that permits tariffs of up to 50% against countries deemed to have engaged in discriminatory trade practices toward the U.S. That same law contributed to steep tariffs that worsened the collapse of global trade during the Great Depression, and legal experts widely anticipate the move will face challenges in American courts.
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Trade lawyers generally agree with Carney that the latest tariffs, like Trump’s earlier ones, violate the existing North American trade agreement, though resolving such disputes through the agreement’s formal process tends to be slow, and it remains unclear whether Trump would even accept a ruling against him. The World Trade Organization offers no faster path to resolution either, and Trump has frequently disregarded its rulings in the past.
Canada’s response has been one of measured pushback. Following a phone call with Trump on Tuesday, Carney said the two countries had agreed to intensify negotiations in the coming weeks, adding that he intends to consult with Canada’s provinces on how to proceed.
Ontario Premier Doug Ford and British Columbia Premier David Eby have both ruled out returning American products to their provinces’ government-run liquor stores without a new trade agreement in place, and Ford suggested Tuesday that Canada could consider cutting off energy exports to the United States as leverage.
Looking ahead, while the U.S. held several rounds of formal talks ahead of a July 1 deadline to renew the broader North American trade agreement for another 16 years, no formal negotiations have taken place specifically with Canada since last autumn.
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Canada had appeared close to reaching a deal on steel and aluminum tariffs until Ontario’s provincial government aired a U.S. television ad featuring former President Ronald Reagan speaking out against tariffs, a move that reportedly derailed progress. While the U.S. and Mexico continue holding talks, nothing has yet been scheduled with Canada.
