WASHINGTON — U.S. President Donald Trump will hit Canada with 25 per cent tariffs on Tuesday, with a lower 10 per cent duty for energy — laying the foundation for a trade war with America's closest neighbours.
Trump signed the executive order Saturday at his Mar-a-Lago resort in Florida after spending much of the day at a golf course. It included a retaliation clause that says if Canada responds with duties on American products, the levies could be increased.
The president, in a post on Truth Social, said he implemented tariffs against Canada, Mexico and China to stop what he calls the illegal flow of fentanyl and people across America's border.
"We need to protect Americans, and it is my duty as president to ensure the safety of all," Trump said.
The volume of drugs and people crossing from Canada into the United States is miniscule compared to Mexico. U.S border statistics show less than one per cent of all fentanyl seized comes from the northern border.
Canadian officials were dismayed that Trump made good on his threats to impose devastating duties which could upend trade in North America, devastate the Canadian economy and trigger inflation in Canada and the United States.
NDP Leader Jagmeet Singh said Canadians must "stand strong and stand together." Conservative Leader Pierre Poilievre said "we must put CANADA FIRST" in a statement on social media in which he called for Parliament to return to deal with the crisis.
The federal government has said it has multiple options for retaliatory tariffs ready to deploy.
Premiers have disagreed on how Canada should respond. Some say everything must be on the table, while Alberta Premier Danielle Smith and Saskatchewan Premier Scott Moe have said exports of oil and other resources like potash should not be included in retaliation plans.
Smith, who recently visited Trump at Mar-a-Lago, said she was disappointed.
"Alberta will do everything in its power to convince the U.S. president and Congress, as well as the American people, to reverse this mutually destructive policy," she posted on social media.
Ontario Premier Doug Ford said in a statement that "Trump has chosen to walk away from a trading relationship that for decades has made life better for millions of workers on both sides of the border."
Industry, business organizations and labour unions are sharing their concern that the duties have destroyed decades of goodwill and market integration between the countries. The tariffs will have immediate consequences on Canadian and American livelihoods, they say.
Unifor, Canada's largest private sector union, said Trump has declared a trade war and there needs to be swift retaliation.
"We will never forget this act of hostility against our workers, and we must take every measure possible — utilize every ounce of creativity we have — to build a strong, resilient, and diverse economy to never be held hostage by America again," Unifor National President Lana Payne said in a news release.
Trump pushed ahead with the levies using the International Economic Emergency Powers Act (IEEPA), expanding his earlier declaration of an emergency at the southern border to the north.
IEEPA is a national security statute that gives the U.S. president authority to control economic transactions after declaring an emergency.
While its predecessor, the Trading With The Enemy Act, was used during the Nixon administration to briefly impose a 10 per cent tariff on all imports into the U.S., no president has used IEEPA for tariffs.
Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said the move is "not only an aggressive tariff action in size and scope, but it is also an aggressive assertion of the president's power to impose those tariffs."
Trump is testing the boundaries of his power, said Peisch, a partner at Wiley Rein LLP in Washington, D.C. The coming days and weeks will show whether Congress or importers push back.
The order said the lower energy tariff applies to resources such as crude oil, natural gas natural gas liquids, uranium, coal and critical minerals.
Secretary of Homeland Security Kristi Noem will tell the president if Canada has taken enough steps to alleviate the "public health crisis through cooperative enforcement actions," the order said. Only then will tariffs be removed.
The order doesn't clarify what appropriate measures would suffice.
Ottawa put forward a $1.3 billion border security plan to alleviate Trump's concerns. More helicopters and drones are already in the sky and additional boots are on the ground.
Some provinces have also increased law enforcement resources.
Despite what the order states and Ottawa's efforts made to date, it's unlikely that strengthening border security would have made a difference to the president.
Trump himself said Friday that there were no concessions that would stop Canada, Mexico or China from being hit with the levies.
Trump has said that the government should raise more of its revenues from tariffs, pushing aside concerns from economists that duties could stoke inflation after the Republican president campaigned on making life more affordable for Americans.
Scott Bessent, Trump's treasury secretary, has said the president utilizes tariffs in three ways: to remedy unfair trade practices; to raise revenue for the federal government, and as a negotiating tactic.
Experts have said the duties are likely a first step in Trump's plan to rattle Canada and Mexico ahead of a mandatory review of the Canada-U.S.-Mexico Agreement. The trilateral pact was negotiated to replace the North American Free Trade Agreement under the first Trump administration.
During negotiations in 2018, Trump floated the idea of a 25 per cent tariff on the Canadian auto sector, but it was never implemented. However, he did use his national security powers to impose a 25 per cent tariff on steel and a 10 per cent tariff on aluminum imports.
Canada and Mexico were eventually able to negotiate exemptions.
— With files from Aaron Sousa and Lisa Johnson in Edmonton, Joe Bongiorno in Montreal and The Associated Press
This report by The Canadian Press was first published Feb. 1, 2025.
Kelly Geraldine Malone, The Canadian Press
