U.S. President Trump reimposes and expands tariffs on Canadian goods, escalating trade war

In 2025, U.S. President Donald Trump reimposed and expanded tariffs on Canadian imports, triggering a significant escalation in the long-standing trade relationship between the world’s two largest trading partners. In March, Trump used emergency economic powers to levy 25 % tariffs on most Canadian goods and 10 % on Canadian energy products, citing national security concerns related to border enforcement and drug trafficking — claims that Ottawa vehemently rejected. These measures marked a sharp break from decades of tariff-free trade under the United States–Mexico–Canada Agreement (USMCA), exposing non-compliant goods to steep duties and disrupting deeply integrated supply chains. By August 2025, Trump further raised tariffs on many Canadian imports to 35 %, amplifying economic strain and uncertainty. Canada responded promptly with retaliatory tariffs on U.S. goods, including matching 25 % duties on tens of billions of dollars in products, and encouraged a “Buy Canadian” boycott to pressure the U.S. government. While key sectors covered under USMCA remained exempt or adjusted, the dispute unsettled markets, slowed cross-border trade, and heightened political tensions. The tariffs also accelerated Canada’s efforts to diversify trade partners beyond the U.S., strengthening ties with Asia and other markets as policymakers sought to mitigate the economic impact of the ongoing trade war.