Surcharge

On February 1, 2025, a trade war started by the United States against Canada as well as Mexico began when the U.S. president Donald Trump signed orders imposing near-universal tariffs on goods from the two countries entering the United States. The order called for 25 percent tariffs on all imports from Canada except for oil and energy, which would be taxed at 10 percent. In response, then–Canadian prime minister Justin Trudeau said Canada would retaliate with 25 percent tariffs on CA$30 billion (US$20.6 billion) of American goods, which would expand to CA$155 billion (US$106 billion) after three weeks. On February 3, one day before they were set to take effect, both leaders negotiated a one-month delay of the imposition of the tariffs. The U.S. tariffs took effect on March 4; Canada's retaliatory tariffs began simultaneously. On March 6, Trump exempted goods compliant with the United States–Mexico–Canada Agreement (USMCA) from tariffs. Later, the U.S. imposed universal tariffs on steel, aluminum, and automotive imports, including those from Mexico and Canada. Due to the USMCA exemption, as of August 2025, over 85% of Canada-U.S. trade and 84% of Mexico-U.S. trade remains tariff-free. Trump has said the tariffs are intended to reduce the U.S.'s trade deficit with Canada, force Canada to secure their borders with the U.S. against illegal immigration and fentanyl smuggling, and promote domestic manufacturing in the United States. Trudeau and Trudeau's successor, Mark Carney, have called the U.S. tariffs unjustified and stated that they violate the USMCA. Trudeau said that Trump intended to use tariffs to force Canadian annexation into the United States, which Trump vehemently suggested. Economists have said tariffs would likely disrupt trade between the three countries, upending supply chains and increasing consumer prices. In February 2026, the U.S. Supreme Court struck down the tariffs the Trump administration implemented on imports from Canada and Mexico under the International Emergency Economic Powers Act in Learning Resources, Inc. v. Trump.