U.S. President Donald Trump unveiled his long-promised plan seeking to rebalance global trade with reciprocal tariffs on April 2, but didn’t impose new tariffs on Canada.
Instead, a senior White House official said the initial broad 25 percent tariff placed on goods from Canada and Mexico in relation to illegal migration and fentanyl trafficking will remain in place. The current exemptions for goods covered by the United States-Mexico-Canada Agreement (USMCA) free trade deal, implemented on March 6, also remain in place. Canada also previously received a 10 percent tariff on its energy exports.
“At this time, Canada and Mexico, they continue to be subject to the national emergency related to fentanyl and migration, and that tariff regime will persist while those conditions persist, and they will be subject to that regime, and not the new regimes,” said the official in speaking to reporters before Trump’s announcement.
The official added that if the fentanyl and migration issues are resolved, Canada would default to the new reciprocal tariff regime.
This new regime will impose a 10 percent baseline tariff rate, which will come into effect on April 5. Higher rates will be imposed on April 9 for the countries considered by the Trump administration to be the “worst offenders” on trade.
During his speech at the White House on April 2, Trump said the tariffs would be the country’s “declaration of economic independence,” and will give the U.S. government trillions of dollars in tariff revenue while bringing jobs and factories “roaring back” into the country. The United States is seeking to address its trade deficit, which stood at over US$918 billion in 2024.
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Trump singled out Canada specifically for its supply management system, saying the country imposes tariffs as high as 300 percent for its dairy products. “When you look a little bit, it’s not a pretty picture, and we don’t like it. It’s not fair to our farmers. It’s not fair to our country,” Trump said.
Trump also repeated his previous claims that the U.S. subsidizes Canada for “close to $200 billion a year,” and said the country needs to “work for yourselves.” According to the U.S. Trade Representative, the United States had a trade deficit in goods of US$63.3 billion with Canada in 2024. Canada is the United States’ largest provider of foreign oil and when those imports are removed from the equation, the United States has a trade surplus in goods with Canada.
The reciprocal tariffs for other countries include 34 percent on China, 26 percent on India, 24 percent on Japan, 20 percent on the European Union, and 10 percent on the United Kingdom and Australia. The White House said these tariffs are equal to or lower than the tariffs imposed on the United States by the countries, “including currency manipulation and trade barriers.”
