Trump slaps 50% tariff on most Canadian goods, Carney vows to intensify talks

Trump announces sweeping tariff on Canadian imports

US President Donald Trump has imposed a 50% tariff on most Canadian goods, citing long-standing trade disputes between the two nations. The announcement, made on Monday, marks one of the steepest tariff hikes the United States has placed on a major trading partner in recent decades.

The White House said the measure targets a wide range of Canadian products, though officials did not immediately provide a full list of exempted items. The move is expected to hit key sectors including lumber, dairy, and automotive parts.

Trade dispute escalates between neighbours

The tariff escalation stems from disagreements over Canadian trade practices that Washington says discriminate against US businesses. Trump has repeatedly criticised Canada's supply management system for dairy and its softwood lumber policies.

This is not the first time Trump has targeted Canada with tariffs during his presidency. However, the 50% rate represents a significant escalation from previous measures, which typically ranged from 10% to 25%.

Canada responds with resolve

Canadian Prime Minister Mark Carney responded swiftly, calling the tariff 'unacceptable' and vowing to 'intensify' trade talks with the United States. Speaking to reporters in Ottawa, Carney said Canada would seek a negotiated resolution but would not bow to pressure.

Carney's government is expected to announce retaliatory measures in the coming days. Canadian officials have not yet confirmed the specifics of any counter-tariffs but have indicated they will target US goods that are politically sensitive.

Economic impact on both sides

Economists warn that the tariff will raise costs for businesses and consumers on both sides of the border. Canada is the top export destination for many US states, and the new levy could disrupt supply chains in industries like automobile manufacturing and agriculture.

The Canadian dollar weakened against the US dollar following the announcement, while stock markets in Toronto and New York showed mixed reactions. Analysts say prolonged uncertainty could dampen investment in cross-border trade.

What triggered the latest move

Trump's decision comes after months of stalled negotiations over the United States-Mexico-Canada Agreement (USMCA) review. The White House accused Canada of failing to address complaints about digital services taxes and agricultural market access.

The timing of the tariff announcement also coincides with domestic political pressures in both countries. In the US, Trump faces a tough re-election campaign, while Carney is navigating a minority government situation in Canada.

Both nations have expressed a desire to avoid a full-blown trade war, but the path forward remains unclear. Diplomatic channels remain open, though no date for high-level talks has been set.