Trump slaps 50% tariffs on Canadian goods and Carney vows to 'intensify' trade talks

Hind Al Soulia - Riyadh - WASHINGTON —US President Donald Trump has imposed a 50% tariff on a wide range of goods imported from Canada in retaliation for what he called "unequal treatment" of US products, marking a major escalation in trade tensions between the North American neighbors.

The move could unleash a new wave of economic chaos, with risks of higher inflation and further fraying of relations between two nations that had been closely woven together before Trump’s return to the White House.

Everyday consumer items like hockey sticks and industrial goods such as cement are among the goods targeted. However, several key exports will be spared, such as energy, potash, critical minerals and fish.

Prime Minister Mark Carney responded by saying Canada stood ready to "intensify" trade talks with the US in the coming weeks.

The White House said the duties would take effect in 30 days.

These tensions have been simmering since Trump returned to office in January 2025 and unleashed a wide-ranging global programme of tariffs.

Tariffs are taxes on imported goods that are paid to the government by companies bringing in the foreign products.

The US Supreme Court ruled earlier this year that many of Trump's tariffs imposed globally under emergency powers were illegally enacted. But his latest action on Monday night uses a different, obscure law that is untested in court.

Canada, which is one of the US's closest trading partners, was one of the few countries to retaliate last year against Trump's tariffs.

It placed a 25% levy of its own on about C$30bn (£16bn; $21.7bn) worth of US goods being brought into Canada. Carney later dropped some of them.

A White House fact sheet published on Monday discussing the new tariffs said they applied regardless of whether the product was included under the existing free trade agreement between Canada, the US and Mexico, known as the USMCA.

The new tariffs add to trade barriers already in place between the two nations.

The US has been maintaining active tariffs ranging from 15% to 50% on Canadian steel, aluminium and copper. It also charges a 35% tariff on Canadian softwood lumber, alongside a 25% tax on non-US parts in cars.

Meanwhile Canada has its own 25% counter-tariff on selected imports of American steel, aluminium and vehicles.

Monday's announcement also comes in the wake of President Trump's threat to impose tariffs over Canadian wildfire smoke drifting into US cities, though this issue has not been officially mentioned as the justification for the move.

"This is the latest in a series of unilateral US trade actions that began with the US imposing a series of tariffs in direct violation of the Canada-United States-Mexico Agreement," Carney said in a statement on X.

Carney also cited "threats to Canadian sovereignty", possibly in reference to Trump's repeated calls to make America's northern neighbor the 51st US state.

In a post of his own on X, Ontario Premier Doug Ford wrote: "If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar."

As part of his executive action announcing the new tariffs, Trump issued three proclamations.

These list US complaints over trade issues that were previously known to Canada, signalling a breakdown of trade negotiations between the two neighbors. They relate to cars, dairy products and alcohol.

On cars, Trump's proclamation pointed to Canada charging a tax on imports of US motor vehicles and parts that are not covered under USMCA.

He argues it is "unreasonable" and that Canada has discriminated against the US by not charging other countries a similar tax.

Automotive manufacturing in North America is highly integrated between Canada, the US and Mexico.

Dairy, meanwhile, has long been a problem for the US, specifically Canada's supply management system, which sets limits on foreign imports. Those that exceed the limit are charged a tariff up to 300%.

And lastly, the enduring boycott of US alcohol by most Canadian provinces has become a major sore point for the Americans since it was imposed last year.

Canadian premiers have said repeatedly that the boycott will be lifted if the US removes its tariffs on key Canadian sectors, including metals and automobiles.

Canadian trade negotiators have been trying to secure a deal that would at least reduce some of the current US tariffs.

Earlier this year, the US chose not to renew the USMCA in its current form.

Canada and Mexico sought a renewal of the trade agreement, but the US wants to make changes to the deal, which was negotiated during Trump's first term in office.

Despite the US action, however, the treaty will continue to govern North American trade over the next decade on a rolling basis - but it will require annual reviews.

In February, the US Supreme Court struck down sweeping international tariffs imposed by Trump through the International Emergency Economic Powers Act (IEEPA) of 1977.

Trump had used IEEPA to attempt to justify the imposition of tariffs on dozens of countries beyond America's neighbours.

The Supreme Court justices ruled that the president had exceeded his authority when he announced the duties under a law reserved for national emergencies.

The White House vowed at the time that it would invoke other mechanisms to impose import taxes.

The tariffs announced on Monday that target Canada specifically were introduced under Section 338 of the 1930 Tariff Act, which covers trade discrimination rather than national emergencies.