On Thursday, the U.S. President Trump raised tariffs on Canadian imports from 25% to 35%, citing drug smuggling concerns, a claim dismissed by Canadian Prime Minister Mark Carney, who vowed to protect jobs during rising trade tensions.

The White House linked this decision partly to Canada’s alleged failure to stop fentanyl smuggling, though Canadian Prime Minister Mark Carney dismissed the claim, stating, “Canada accounts for just 1% of U.S. fentanyl imports and is working intensively to reduce these volumes.”

Carney expressed disappointment with the tariff hike, writing on X that “while we will continue to negotiate with the United States on our trading relationship, the Canadian government is laser focused on what we can control: building Canada strong.”

He warned that sectors such as lumber, steel, aluminum, and automobiles would be hardest hit but pledged to “protect Canadian jobs, buy Canadian goods, invest in industrial competitiveness, and diversify export markets.”

Ontario Premier Doug Ford, whose province generates about 40% of Canada’s GDP, demanded a strong countermeasure, calling for a 50% tariff on U.S. steel and aluminum imports.

Ford urged, “Canada shouldn’t settle for anything less than the right deal. Now is not the time to roll over. We need to stand our ground.”

Despite the escalation, Trump told that he remains open to talks with Canada and may speak with Carney soon. The U.S. also granted Mexico a 90-day extension to negotiate a deal and avoid similar tariff hikes.

Economists note Canada’s economy has shown resilience amid the tariffs and is expected to avoid recession.

Canadian exports to the U.S. have dropped slightly, with many companies diversifying their markets and increasing USMCA compliance, which currently exempts about 90% of Canadian exports.

Tensions have also been fueled by Canada’s recognition of Palestinian statehood, a move Trump criticized as making a future trade deal 'very hard' to achieve.

Copied