President Donald Trump announced Thursday that the United States will raise tariffs on certain Canadian imports from 25% to 35%, effective Friday. The move is the latest in a string of aggressive trade and foreign policy decisions that have strained U.S.-Canada relations in recent months.
The White House confirmed that goods covered under the United States-Mexico-Canada Agreement (USMCA), the 2020 trade pact between the three countries, will remain exempt from the increased tariff rate. However, the targeted increase will affect a wide range of Canadian exports, including lumber, aluminum, and certain manufactured goods not covered under the agreement.
The announcement came just hours before a broader slate of tariff hikes on several countries was scheduled to take effect. Canada, a key U.S. ally and one of its top trading partners, has pushed back strongly against the move.
In a statement released Thursday, the White House cited Canada’s alleged failure to help curb the influx of fentanyl and other illicit drugs as the primary reason for the tariff hike.
“Canada has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the president’s actions to address this unusual and extraordinary threat to the United States,” the statement read.
Drug Trafficking Dispute Fuels Policy Shift
President Trump initially imposed a 25% tariff on Canadian and Mexican goods earlier this year, blaming both nations for not doing enough to stop the flow of fentanyl into the U.S. However, national security and border experts have noted that the vast majority of illicit fentanyl enters the United States through its southern border with Mexico, not the northern border shared with Canada.
Canadian officials have dismissed the claim as politically motivated and unsupported by evidence. Experts suggest the move is more likely part of Trump’s broader strategy to pressure trading partners ahead of the 2026 election cycle.
Political and Diplomatic Fallout
Tensions escalated further after Canada formally recognized a Palestinian state earlier this month, a move that the White House described as “complicating” ongoing trade negotiations between the two countries. In a late-night social media post on Wednesday, Trump called the decision “a betrayal of our shared Western values” and implied it would carry “economic consequences.”
Adding fuel to the fire, the president has made several controversial comments in recent weeks, including suggesting that the U.S. "doesn't need Canadian goods" and even musing about making Canada the 51st U.S. state.
Canadian Prime Minister Mark Carney responded firmly during a press conference in Ottawa.
“The idea that Canada would ever become part of another country is absurd. We remain committed to an independent, rules-based international order and a strong North American partnership — but that partnership must be based on mutual respect.”
Other Canadian officials also criticized the tariff increase, calling it “unjustified” and “damaging to both economies.”
Economic Implications
The U.S. imported more than $400 billion worth of goods and services from Canada in 2024. Canadian aluminum, timber, and vehicle parts are key inputs for U.S. industries, particularly construction and manufacturing.
Economists warn that the tariff hike could raise costs for American consumers and businesses, especially those reliant on raw materials from Canada. The increase is also likely to provoke retaliatory tariffs from Ottawa, potentially targeting American agricultural exports or other politically sensitive sectors.
“This kind of tit-for-tat tariff policy risks sparking a trade war with one of our closest allies,” said Laura Fein, a senior trade analyst at the Peterson Institute for International Economics. “The U.S. economy doesn’t operate in a vacuum. Disrupting supply chains to make a political point could backfire.”
Looking Ahead
While Trump’s administration remains firm on the new tariff policy, Congress has yet to weigh in in a significant way. With bipartisan support building for a bill to ban stock trading by members of Congress, lawmakers have been largely focused on domestic ethics reform. Still, trade policy remains a hot-button issue ahead of the midterm campaign season.
For now, the tariff hike adds a new layer of complexity to an already strained relationship between the United States and Canada — one that has long been defined by cooperation, shared values, and deep economic ties.
