New Delhi: US President Donald Trump on Monday announced a 50 percent tariff on a broad range of Canadian goods, sharply escalating a trade dispute between the two neighbours and prompting Prime Minister Mark Carney to accuse Washington of violating their North American free-trade agreement.
“Today, the United States administration announced its intention to impose a new 50 per cent tariff on a significant number of Canadian goods,” Carney said in a statement on Monday. He described the announcement the latest in a series of “unilateral US trade actions”, and said earlier American tariffs, including those imposed on Canada’s automobile sector, were in “direct violation” of the Canada-United States-Mexico Agreement, or CUSMA.
Canada’s past measures against US products, he added, had been introduced in response to Washington’s earlier tariffs. “Canada, as is its right, has merely matched those measures,” Carney said.
The tariffs, expected to affect around $20 billion worth of Canadian imports, will come into force after 30 days. They will cover products that had previously received preferential treatment under CUSMA, known in the US as the USMCA.
Energy products, potash, fish, and critical minerals have been excluded, limiting the immediate impact on strategically important American supply chains.
Canada is the single largest supplier of energy to the US and a major source of other key industrial inputs, with bilateral energy trade valued at around $150 billion in 2024.
The Trump administration said the measures were intended to counter what it described as Canadian discrimination against American automobiles, alcoholic beverages, and dairy products.
Trump signed three proclamations invoking Section 338 of the US Tariff Act of 1930, a rarely used provision allowing the president to impose duties against countries found to discriminate against American commerce.
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Carney keeps door open
Despite the strong response, Carney indicated that Ottawa remained prepared to negotiate.
Canada had submitted “detailed and comprehensive proposals” to resolve the pre-existing trade dispute and modernise CUSMA, he said, adding that his government was ready to “intensify” discussions in the coming weeks in light of the newly announced tariffs.
“Canada believes in the benefits of free and fair trade,” Carney said. “This trade dispute has raised costs for families, particularly in the US.”
The prime minister said Canada would take “any measures necessary” to strengthen its domestic economy and support Canadian workers, farmers, businesses, and families.
The announcement marks a new low in a bilateral relationship once defined by closely integrated supply chains and largely tariff-free trade. Whether the duties ultimately take effect will now depend on negotiations during the 30-day window, and on whether Ottawa follows through on demands for a forceful response.
What the tariff covers
The 50 percent duty will apply to products ranging from automobile materials, wine, and other alcoholic beverages to cement, machinery, textiles, clothing, seeds, and hockey equipment.
Canada’s manufacturing sector, particularly businesses supplying the deeply integrated North American automobile industry, could face reduced orders or pressure to lower prices as a result of these tariffs. Parts and materials often cross the US-Canada border several times during vehicle production, meaning tariffs can accumulate across the supply chain.
Provinces with significant manufacturing and agricultural activity, including Ontario and Quebec, are likely to face the greatest exposure.
Ontario Premier Doug Ford called for an equivalent Canadian response if the measures take effect. “If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar,” he said in a social media post on Monday.
The Canadian Chamber of Commerce described the announcement as “regrettable decisions”, but urged both governments to use the 30-day period before implementation to make progress in negotiations.
The impact of the tariffs will not be confined to Canada. US manufacturers dependent on Canadian components could face higher input costs, while American consumers may pay more for imported food, beverages, clothing, and other goods.
The tariffs may also provoke Canadian countermeasures targeting US exporters. Canadian provinces had earlier removed American alcoholic beverages from government-controlled shops in response to Trump’s trade actions and repeated remarks about making Canada the “51st state”.
(Edited by Nardeep Singh Dahiya)
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