On February 1, 2025, United States president Donald Trump announced sweeping tariffs on Canadian goods, including a 25% tariff on most imports and a 10% tariff on Canadian energy products. Canada responded with its own retaliatory tariffs on $30 billion worth of U.S. goods, escalating to $155 billion after three weeks. These measures marked a significant escalation in trade tensions, disrupting longstanding cross-border economic cooperation and prompting both countries to implement additional countermeasures and support programs for affected industries.
The conflict quickly expanded to include tariffs on steel, aluminum, automobiles, and a range of consumer goods, with both federal and provincial governments in Canada taking steps to mitigate the impact on businesses and workers. The trade war has led to market volatility, strained diplomatic relations, and forced companies on both sides of the border to adapt to new supply chain realities, while ongoing negotiations and temporary exemptions have provided only limited relief amid continued uncertainty.
In early 2026, the Supreme Court of the United States struck down several of Trump's sweeping emergency tariffs imposed under the International Emergency Economic Powers Act, in Learning Resources, Inc. v. Trump prompting Trump to announce a new temporary 10% global tariff that largely exempts CUSMA-compliant Canadian and Mexican goods but leaves sector-specific and other trade measures in place.
2024 February 21, 2024 The bilateral trade relationship between the United States and Canada is one of the world's largestCanada buys "more from American businesses than the UK, France, China and Japan combined". In 2023, a total of billion goods and services was traded. Both the energy and automotive markets are highly integrated. According to a CRS report based on U.S. Bureau of Economic Analysis data, taking into consideration both goods and services, in 2023, Canada was the United States' largest trading partner with U.S. imports from Canada valued at billion and U.S. exports to Canada valued at billion resulting a shortfall with Canada. The 2024 billion trade deficit with Canada in 2024 is the second smallest of all American trade deficits, representing 4% of the overall U.S. trade deficit. Reduction of Canadian imports "would barely move the needle", according to Toronto Dominion Bank (TD) economists. October 15, 2024 In an interview with Bloomberg News editor John Micklethwait at the Economic Club of Chicago on October 15, 2024, then-presidential candidate Donald Trump outlined his economic strategy, emphasizing the use of "draconian" tariffs as a key component to fund his proposed tax cuts, which would incentivize companies to invest in manufacturing within the United States. November 25 In a post on Truth Social, Trump announced that one of his first Executive Orders would impose and maintain a 25% tariff on Canada and Mexico citing their alleged inadequate efforts to control their borders.
November 29 Days after Trump's Truth Social post threatened 25% tariffs on Canadian imports, Canadian Prime Minister Justin Trudeau, Dominic LeBlanc, Canada's Finance Minister, US Commerce Secretary Howard Lutnick and others dined at Trump's Florida estate, Mar-a-Lago to discuss trade and tariffs. December 5 The chief economist of the largest farm group in the United Statesthe American Farm Bureau Federation cautioned that it was important that the United States' administration "talk first" with "friends like Mexico and Canada" before "shooting". Export sales of agricultural products represent approximately 20% of the U.S. agricultural sector salesCanada and Mexico are American farmers' largest export customers and import suppliers. December 9 Then-President-elect Donald Trump referred to Trudeau as Governor of the Great State of Canada. December 16 The Canadian Department of Finance announced initiatives in response to economic uncertainties following the 2024 United States presidential election including new tariffs on Chinese products.
2025 January
January 6 In a Truth Social post, Trump made the false claim that "Many people in Canada LOVE being the 51st State." A CNN article fact-checking Trump's claims about Canada, said that the 51st idea is "massively unpopular" in Canada 85% are opposed and only 9% are in favor. It is one thing that politicians on left and right "vehemently" reject. In the same post, Trump said without evidence that by joining the U.S. as a state, Canada "would be TOTALLY SECURE from the threat of the Russian and Chinese Ships that are constantly surrounding them." Canada has never been surrounded as described. While there have been sporadic sightings of Russian and Chinese military ships and aircraft, as well as Chinese research vessels viewed with suspicion, in the vicinity of Alaska in recent years, these occurrences have been limited and monitored by Canadian and U.S. military forces. January 7 During a press conference at Mar-a-Lago, in response to a question by NBC correspondent Vaughn Hillyard, then President-elect Trump said he would not use "military force to annex and acquire" Canada but he would use "economic force". He said that getting "rid of that artificially drawn line"the Canada–United States border would improve national security. Trump said that the United States was subsidizing Canada by over billion annually through the U.S. trade deficit with Canada. Trump conflates the trade deficit with a subsidy. In 2024 the U.S. trade deficit with Canada in goods and services was billionexcluding services, it was billion according to official US statistics. January 15 A meeting convened by Prime Minister Trudeau with First Ministerspremiers of Canadian provinceswas held to discuss the threat of tariffs by the United States, including revisiting the Canadian Free Trade Agreement (CFTA) that regulates interprovincial trade. January 20 In a memo President Donald Trump told officials to "assess the unlawful migration and fentanyl flows" from Canada, Mexico and China" and then "recommend appropriate trade and national security measures to resolve that emergency." January 22 A second meeting of First Ministers was held to prepare for a trade war and to discuss the removal of the 2017 detailed list of approximately 245 exemptions to the CFTA so Canadian consumers could trade goods and move workers between provinces. January 29 Canadian Foreign Minister Mélanie Joly met with United States Secretary of State Marco Rubio in Washington, D.C. in response to the threat of steep United States tariffs that could result in a trade war between the two countries. Joly expressed cautious optimism about a diplomatic solution to trade relations. Along with presenting details of Canada's initiatives in working with the United States to tackle illegal immigration and fentanyl at the border, she clarified that less than 1% of the fentanyl and less than 1% of illegal immigrants enter the United States through the Canadian border. January 31 Columbia University's economics professor and Nobel Laureate Joseph Stiglitz said that "Virtually all economists think that the impact of the tariffs will be very bad for America and for the world...They will almost surely be inflationary...It's inconceivable that other countries won't retaliate."
February February 1 at the beginning of his second non-consecutive term, President Trump signed three executive orders and a Fact Sheet under the authority of the 1977 International Emergency Economic Powers Act (IEEPA) declaring a national emergency. He announced that Canada and Mexico would be sanctioned with tariffs starting on March 4, citing an "extraordinary threat posed by illegal aliens and drugs" and their "series of failures" to "address the flow of narcotics into the United States". His E.O "Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border" and Fact Sheet said that "Canada has played a central role in these challenges, including by failing to devote sufficient attention and resources or meaningfully coordinate with United States law enforcement partners to effectively stem the tide of illicit drugs." On CPAC, the Canadian parliamentary channel, Trudeau announced retaliatory 25% tariffs valuing () on products from the United States. February 2 The Royal Bank of Canada's Chief Economists said that the blanket 25% tariffs on all imports from Canada and the 10% tariff on energy products represented the country's largest trade shock in nearly 100 years" comparing it to the Smoot–Hawley Tariffs. Media outlets examine the disconnect between the E.O. and the nature of the changing grievances and lists of things that Trump wants. February 3 Trump announced a 30-day pause on Canadian tariffs. According to the Associated Press, in the 2024 fiscal year United States Customs agents "seized of fentanyl at the Canadian border", "compared with at the Mexican border," which represents less than one per cent of all fentanyl seized by US border agents imports coming into the United States and into the United States. CBC News reported that in 2024, Canadian border officials confiscated eight million grams of drugs that had been smuggled into Canada compared to five million grams entering the United States via Canada seized by the U.S. Customs and Border Protection. According to a 2025 CRS backgrounder report on the International Emergency Economic Powers Act (IEEPA), since Trump is the first president to use the IEEPA to impose tariffs, open questions remain about the "scale and scope of what tariffs might be authorized under the statute." A series of "high-stakes" phone calls between Trump and Trudeau and between other officials took place. Trump cited a memo which included a list of grievances with Canada that were unrelated to trade, such as renegotiating the Canada–United States border. February 78 According to a Bloomberg News/Harris poll in early February, approximately 60% of Americans believe high tariffs would cause consumer prices to rise. February 10 A 25% tariff on aluminum and steel is announced in an Executive Order that cited an update on a 2018 report that said that the significant increase in steel imports from Canada, Mexico and other countries to "once again threaten to impair U.S. national security." Canada is the largest supplier of steel and aluminum to the United States, representing 22% of steel imports and 47% of aluminum imports in 2022. In response to the tariffs on steel and aluminium, Trudeau, who was in Paris at an international conference on artificial intelligence, said that the tariffs were "entirely unjustified." Canada and the European Union "vowed to retaliate firmly" according to France 24. February 11 Trump reinstated 25% tariff on steel imports and increased tariffs on aluminum imports to 25% on Canada and other countries. Trudeau announced the appointment of Kevin Brosseau as Canada's new Fentanyl Czar to work with Americans to "disrupt and dismantle this illegal drug trade crossing our border". February 14 Wells Fargo and Company economists warned in their February 14 memo, that "Tariff worries are real" as retail sales slumped. February 20 Details of the February 3 phone calls between Trump and Trudeau emerge. February 26 Trump suggest that a one-month reprieve on tariffs is possible with the sanctions on Canada and Mexico to begin on April 2. February 27 The Peterson Institute for International Economics cautioned that the cost of the combined tariffs to the typical American family would be over $1,200 a year, according to a February 27 Bloomberg News article.