Trump hikes tariffs on Canadian goods, citing lack of action on drug trafficking

U.S. President Donald Trump has signed a new executive order increasing tariffs on Canadian goods in response to what he says is Ottawa’s failure to curb the flow of fentanyl and other illicit drugs across the border.

The order raises existing tariffs from 25 per cent to 35 per cent on certain Canadian imports, effective today (Aug. 1). Products that are believed to have been transshipped to avoid duties — rerouted through other countries or mislabeled — will now face a 40 per cent tariff. These penalties apply only to goods that do not qualify for duty-free status under the USMCA trade agreement.

Trump’s administration argues that Canada has not done enough to intercept drug traffickers, criminals and illicit substances entering the U.S. He also accuses Canada of retaliating with its own trade measures, prompting what the White House calls a necessary escalation to maintain national security.

The order directs U.S. Customs and Border Protection to enforce the new duties and identify facilities suspected of helping companies circumvent trade rules. The Department of Homeland Security is tasked with monitoring Canada’s actions and recommending further penalties if necessary.

Prime Minister Mark Carney released a statement on the increased tariffs, saying he is disappointed in the move but remains committed to USMCA.

“The United States has justified its most recent trade action on the basis of the cross-border flow of fentanyl, despite the fact that Canada accounts for only one per cent of U.S. fentanyl imports and has been working intensively to further reduce these volumes,” Carney said in his statement. “Canada’s government is making historic investments in border security to arrest drug traffickers, take down transnational gangs, and end migrant smuggling. These include thousands of new law enforcement and border security officers, aerial surveillance, intelligence and security operations, and the strongest border legislation in our history. We will continue working with the United States to stop the scourge of fentanyl and save lives in both our countries.”