Since before his return to the presidency in November 2024, Donald Trump made no secret of his intention to impose broad tariffs on trade partners—Canada chief among them. Elected on November 5, Trump quickly followed up with a pledge to levy 25 per cent tariffs on all Canadian and Mexican imports, to take effect on inauguration day, unless the two countries took strong measures to curb drug and human smuggling into the United States.
After Canada’s premiers met with then-Prime Minister Justin Trudeau in December, retaliatory strategies were prepared, particularly focused on securing tariff relief for energy exports. When Trump took office on January 20, he delayed implementing tariffs until February 1 and ordered a sweeping review of U.S. trade policy. That same day, he began laying the groundwork for what would become a relentless tariff campaign.
On February 1, Trump signed an order slapping 25 per cent tariffs on nearly all imports from Canada and Mexico, with a slightly reduced 10 per cent rate on energy. He also included 10 per cent tariffs on Chinese imports. In response, Trudeau’s government launched a series of retaliatory tariffs and Canadian provinces began removing U.S. liquor from publicly run stores.
Just two days later, Trump postponed the Canadian tariffs for a month following Ottawa’s pledge to strengthen border security. However, tensions flared again on February 10, when Trump ended Canada’s exemption on steel and aluminum tariffs, reimposing a 25 per cent levy that he had previously rolled back in 2019. These metals tariffs were meant to stack on top of other duties.
As speculation mounted, Trump hinted at potential 25 per cent tariffs on imported vehicles by early April, alongside possible tariffs on pharmaceuticals and semiconductors. On February 27, he signaled that April 2 would usher in “reciprocal” tariffs matching rates that other nations imposed on U.S. exports, including subsidies and value-added taxes.
By March 4, the month-long tariff pause ended, and duties resumed. Despite Canada’s security efforts, the U.S. implemented the tariffs, prompting Canada to retaliate against a wide range of goods, from furniture to food. The next day, Trump gave a temporary one-month exemption on vehicle tariffs under the Canada-U.S.-Mexico Agreement (CUSMA), responding to pressure from major automakers.
Finance Minister Dominic LeBlanc announced a suspension of some Canadian counter-tariffs after Trump reduced potash tariffs and paused some new duties. Trump’s administration also declared that CUSMA-compliant goods would remain exempt from further tariffs.
Tensions escalated again when Ontario Premier Doug Ford imposed a 25 per cent surcharge on electricity exports to the U.S. Trump doubled down, saying he would raise steel and aluminum tariffs to 50 per cent in response. Ford quickly rolled back the surcharge.
On March 12, 25 per cent tariffs on steel and aluminum officially took effect. Canada responded with $29.8 billion in new tariffs targeting various American goods. Two weeks later, Trump introduced 25 per cent sector-specific tariffs on automobiles, with partial exemptions for CUSMA-compliant content.
April 2 became Trump’s so-called “Liberation Day,” as the U.S. president unveiled 10 per cent tariffs on all imports, with elevated rates targeting China and the European Union. Canada and Mexico were spared additional tariffs, and a previous exemption was extended indefinitely. However, Trump maintained plans for automotive tariffs starting the next day.
On April 3, Prime Minister Mark Carney announced reciprocal 25 per cent tariffs on non-CUSMA-compliant U.S. vehicles and those with low North American content—potentially impacting 10 per cent of all vehicles entering Canada and raising an estimated $8 billion to support Canadian autoworkers.
Ottawa later announced that Canadian manufacturers would be allowed limited imports of U.S. vehicles without the retaliatory surcharge, with future quotas tied to domestic production levels. By April 29, Trump offered automakers some relief through rebates on imported parts finished in the U.S., worth up to 15 per cent of the vehicle’s retail value, decreasing to 10 per cent the following year.
On May 1, U.S. Customs clarified that CUSMA-compliant auto parts would not face tariffs, though kits and parts compilations would still be taxed. The complexity of tariffing only non-American components had become a growing concern in the industry.
A face-to-face Oval Office meeting between Trump and Carney on May 6 projected a calm tone but yielded no softening from Trump, who reiterated his dislike for Canadian aluminum, steel, and cars. His position was made even more evident later that month, when the U.S. Court of International Trade ruled against Trump’s broad use of emergency powers to impose tariffs. The court invalidated duties tied to fentanyl trafficking and trade disputes with Canada, Mexico, and China, but a federal appeals court temporarily paused the ruling, allowing tariffs to continue.
Despite legal setbacks, Trump forged ahead. On May 30, he announced that steel and aluminum tariffs would double to 50 per cent on June 4. In response, Canada passed the Strong Borders Act to give law enforcement enhanced powers to intercept drugs and migrants, hoping to persuade the U.S. to ease pressure.
The new tariffs took effect as promised, and on June 10, a U.S. appeals court extended the legality of Trump’s global tariffs while the case remained under review. Trump arrived in Calgary on June 15 for the G7 summit in Kananaskis, meeting privately with Carney. Although the two leaders agreed to aim for a new deal by July 21, the summit ended early due to unrelated global tensions.
By late June, Canada unveiled a new round of counter-tariffs to take effect July 21, pegged to progress in ongoing negotiations. Meanwhile, Carney signed a defence and security agreement with the European Union to reduce Canadian reliance on the U.S. for defense procurement.
Trump’s abrupt announcement on June 27 to end trade negotiations came in response to Canada’s plan to implement a digital services tax targeting American tech giants. Canada rescinded the tax two days later after a direct call between Carney and Trump.
On July 7, Trump sent tariff threats to governments around the world, including warnings of imminent levies unless trade deals were reached. However, Canada was spared from this wave, as talks toward a bilateral agreement were ongoing.
That sense of stability was short-lived. By July 10, Trump again threatened to impose 35 per cent tariffs on Canadian imports starting August 1, linking possible relief to Canada’s efforts to halt fentanyl trafficking.
The past year has seen Canada-U.S. trade relations tested at nearly every level—from steel to autos to agriculture—through an unpredictable mix of threats, rollbacks, and retaliations. With a July 21 deadline fast approaching, leaders on both sides face pressure to either strike a comprehensive deal or risk further economic fallout.