Trump imposes 50% tariffs on Canada as Carney vows to consider ‘All Options’ in response

US President Donald Trump has imposed a 50% tariff on a wide range of goods imported from Canada, retaliating against what he called “unequal treatment” of US cars, dairy, and alcohol. Everyday consumer items like wine and hockey sticks, as well as industrial goods such as cement, are on the target list, though several key exports including energy, potash, critical minerals, and fish will be spared.

Prime Minister Mark Carney said he had spoken to Trump and both leaders agreed to “intensify” trade talks in a bid to calm growing tensions between the North American neighbours. However, Carney warned that “all options” were on the table in terms of how Canada could respond to the fresh tariff threat. Since the tariff war broke out more than 18 months ago, Carney said Canadians have “stood together” by buying home-produced goods and agreeing new trade routes with other countries. “[The] country is stronger, stronger because we are united, and we will remain united,” he told reporters.

Tensions between the major trading partners have been simmering since Trump returned to office in January last year and unleashed a wide-ranging global programme of tariffs. Asked about the latest tariffs, which the White House says will take effect in 30 days, Trump said Canada had been “very, very tough on us over the years” and “no other presidents done anything about it.” He added: “I love Canada, I love the people of Canada, many friends that live in Canada. Without us, there’s no way they can survive.”

The latest move comes after the US Supreme Court ruled earlier this year that many of the tariffs imposed globally under emergency powers were illegally enacted. Trump has since sought other legal avenues to push through his flagship trade policy. Trump has said the levies will boost American manufacturing and jobs, but some economists have warned that higher charges on imported goods risk pushing up prices for consumers.

This new round of duties on Canadian goods has also fuelled speculation about a potential wider tariff announcement by the US on countries across the world. US Trade Representative Jamieson Greer said on Tuesday that he expected to “see some action soon” when asked about the possibility of forthcoming levies. Canada, which is one of the US’s closest trading partners, was one of the few countries to retaliate last year against Trump’s tariffs, placing a 25% levy of its own on about C$30 billion worth of US goods. Carney later dropped some of them.

As the trade war escalates, the implications for both economies remain significant. Canada’s reliance on US markets for exports and the interconnected nature of North American supply chains mean that any prolonged tariff dispute could have far-reaching consequences. Carney’s warning that “all options” are on the table suggests that Canada is prepared to respond forcefully if necessary, potentially escalating the conflict further. The coming weeks will be critical in determining whether diplomatic efforts can de-escalate the tensions or whether the trade war will intensify, impacting businesses and consumers on both sides of the border. The international community will be watching closely as two of the world’s largest trading partners navigate this dangerous standoff.