U.S. President Donald Trump signed an executive order on Thursday increasing tariffs on Canadian imports from 25% to 35%, starting Friday.
As outlined in a White House factsheet, the newly imposed 35% tariff will apply to all Canadian imports not covered under the U.S.-Mexico-Canada Agreement (USMCA). Additionally, any goods rerouted through a third country to bypass the tariffs would face a transshipment penalty of 40%.

Canadian Prime Minister Mark Carney expressed disappointment over the decision, which followed months of tariff threats and escalating trade tensions from the U.S. administration.
The order was issued just ahead of Trump’s self-imposed August 1 deadline for countries to finalize trade agreements with the U.S.

According to the White House, Trump raised tariffs on Canadian imports in response to what he described as Canada’s failure to address the public health crisis caused by fentanyl and other illicit drugs entering the U.S. through the northern border. Trump also suggested that he might withhold a trade deal with Canada as retaliation for its decision to recognize Palestinian statehood.

Carney warned that the newly increased U.S. tariffs, now raised to 35%, would deal a heavy blow to key Canadian industries, including lumber, steel, aluminum, and automobiles. He also pledged to protect Canadian jobs and shield local industries from the impact of the steep tariffs. While reaffirming Ottawa’s commitment to continued negotiations with the United States, Carney stressed that the government will also focus on eliminating internal trade barriers to attract new investment and encourage Canadians to rely more on domestically made products.

U.S. Commerce Secretary Howard Lutnick suggested that President Trump might reconsider the 35% tariff on Canadian goods if Carney softens his stance and withdraws retaliatory measures.

Roughly 75% of Canada’s exports are destined for the United States. Since March, the Trump administration has imposed a range of tariffs on Canadian goods: 25% on all products except potash and energy, 10% on energy resources including potash, 50% on steel and aluminum, and 25% on automotive exports.
In June, Carney told reporters that if a trade agreement wasn’t reached by August 1, Canada would likely introduce additional counter-tariffs targeting U.S. steel and aluminum exports.

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