U.S. President Donald Trump is nearing a decision on whether to increase tariffs on Canadian imports to the United States from 25 per cent to 35 per cent. The initial 25 per cent tariff was imposed shortly after Trump assumed office. Trump has set a deadline of August 1 for Canada to strike a trade agreement; otherwise, the tariff hike will take effect.
The timeline of key tariff events on Canadian goods is as follows:
– On February 1, Trump signed an executive order imposing tariffs of 25 per cent on most Canadian exports to the U.S., citing concerns about illicit drug trafficking. Certain products, such as energy, critical minerals, and potash, faced a lower tariff of 10 per cent. The tariffs came into effect on March 4.
– By March 6, Trump amended the executive order to exempt products compliant with the Canada-U.S.-Mexico Agreement (CUSMA) from tariffs, covering nearly 90 per cent of Canadian exports to the U.S.
– On April 29, Trump reduced the proposed 25 per cent tariff on automobiles and auto parts from outside the U.S., only applying it to non-CUSMA compliant parts and the non-U.S. portion of assembled vehicles.
– In June, Trump doubled the tariff on steel and aluminum imports from all countries to 50 per cent, affecting Canada as a top supplier of these products to the U.S.
– As of July, Trump threatened to raise the tariff on Canadian goods to 35 per cent by August 1, linking the decision to cooperation on curbing the flow of illicit drugs.
Despite negotiations and efforts by Canadian officials, uncertainty remains regarding the possibility of reaching a trade deal by the specified deadline. Compliance with CUSMA terms continues to play a crucial role in determining tariff exemptions for Canadian exports to the U.S.