U.S. President Donald Trump, re-elected in November 2024 and inaugurated for his second term on January 20, 2025, on July 30, 2025, introduced a sweeping new tariff regime targeting Canada, among other nations, escalating trade tensions.
The policy, announced during a White House address, imposes a 25% tariff on Canadian steel, aluminum, and energy exports, valued at $50 billion annually, and a 15% surcharge on softwood lumber, citing national security concerns and a trade deficit of $70 billion. Trump framed the move as a response to Canada’s alleged unfair subsidies, promising to protect 500,000 American jobs in manufacturing.
Canadian Prime Minister Justin Trudeau condemned the tariffs as “economic aggression,” vowing retaliatory measures, including a 20% tariff on U.S. agricultural goods like corn and soybeans, which could cost American farmers $15 billion. The move disrupts the USMCA agreement, with analysts from the Peterson Institute estimating a 10% rise in consumer prices for Canadian goods in the U.S.
Critics, including U.S. Chamber of Commerce, warn of a potential recession, given 35% of U.S.-Canada trade is integrated supply chains. The narrative of trade warfare is intensifying, with Trump’s strategy testing bilateral relations and economic resilience, though its long-term impact remains uncertain amid global market volatility.