Canadian Prime Minister Mark Carney expressed disappointment on Thursday after President Trump signed an executive order raising tariffs on Canadian goods from 25% to 35%, escalating trade tensions between the two countries.
“While the Canadian government is disappointed by this action, we remain committed to CUSMA, which is the world’s second-largest free trade agreement by trading volume,” Carney said in a statement posted on X, referring to the Canada-United States-Mexico Agreement.
Despite CUSMA keeping average tariff rates relatively low, Carney acknowledged that the increased duties would hit specific sectors hard—particularly lumber, steel, aluminum, and automobiles.
“For such sectors, the Canadian government will act to protect Canadian jobs, invest in our industrial competitiveness, prioritize domestic procurement, and diversify our export markets,” he said.
The U.S. tariff hike applies to Canadian imports not covered under CUSMA. According to a White House statement, products rerouted through third countries to avoid the new tariff will now face a 40% transshipment penalty.
The Trump administration cited “Canada’s continued inaction and retaliation” as the reason behind the tariff increase. The White House also noted that although Prime Minister Carney attempted to reach out ahead of the August 1 deadline, no direct conversation took place between the two leaders.
The move marks a fresh strain in U.S.-Canada relations and raises concerns about further disruptions in North American trade.
