A freight truck carrying timber crosses the border to Canada from the U.S. in Champlain, New York, U.S., March 11, 2025.Brendan McDermid/Reuters
Update: This article was updated on Nov. 11, 2025 to reflect the most recent information on U.S. tariffs.
U.S. President Donald Trump has upended global trade with the highest tariffs since the 1930s. These generally fall into two buckets: Blanket tariffs on countries, and duties on specific industries. Canada faces both.
U.S. trade policy is erratic and hard to follow. Mr. Trump has imposed tariffs, paused them, and threatened more. He has cut deals with some countries, and left others – including Canada – in limbo.
So what U.S. tariffs are in place? What‘s been given a reprieve? And how has Canada retaliated?
Sectoral tariffs - Sec. 232
Mr. Trump has placed tariffs on a number of industries, including steel, aluminum and automobile manufacturing. These apply to all countries, but hurt Canada disproportionately, given the highly integrated nature of the North American industrial base.
In general, Mr. Trump is relying on Section 232 of the Trade Expansion Act of 1962 to impose sectoral tariffs. This law allows the President to impose duties on industries for national security reasons, following an investigation by the U.S. Department of Commerce.
Steel, aluminum and copper: 50 per cent tariff
Steel, aluminum and copper face a 50-per-cent tariff. This applies to the raw commodity as well as derivative products that contain the metals.
In August, the U.S. added over 400 new categories of steel and aluminum products that would be subject to the tariffs, ranging from packaging materials to household appliances and large machinery. The duty only applies to the value of the final good that’s made of metal.
For copper, the duty applies to products like pipes, wires, rods, sheets and tubes. But the U.S. is not applying the tariff to copper concentrate, anodes and cathodes, which make up the bulk of Canadian copper exports.
Automobiles and trucks: 25 per cent tariff (with carve-outs)
Cars, light truck, heavy trucks, and SUVs face a 25-per-cent tariff. Buses face a 10-per-cent tariff.
Canada and Mexico have been granted an important carve-out, given their status as signatories to the United States-Mexico-Canada (USMCA) free trade agreement and their importance to U.S. auto supply chains.
Cars manufactured in both countries, which meet USMCA content rules, don’t pay tariffs on the value of U.S. auto parts contained in the finished vehicle.
For example, if a $50,000 made-in-Canada car contains $25,000 worth of American auto parts, the U.S. importer would only pay the 25-per-cent tariff on $25,000. That would make the effective tariff rate 12.5 per cent.
Auto parts from Canada and Mexico are not subject to a tariff. Several other U.S. trading partners, including Japan, the European Union and Britain, have negotiated lower auto tariffs.
Softwood Lumber: Around 45 per cent
Canadian softwood lumber is being hit from two angles, lifting the average U.S. duty to around 45 per cent. As part of the longstanding softwood lumber dispute, Canadian lumber faces U.S. anti-dumping and countervailing duties of around 35 per cent.
The U.S. has also imposed a new 10-per-cent Sec. 232 tariff on lumber, which is being stacked on top of the existing duties.
Kitchen cabinets and upholstered furniture: 25 per cent (and rising)
On Oct. 14, the U.S. imposed a 25 per cent tariff on kitchen cabinets and upholstered furniture. The tariff on cabinets will rise to 50 per cent in January, while the tariff on upholstered furniture will rise to 30 per cent that month.
Threatened tariffs
Mr. Trump has threatened other industry tariffs but not followed through. This includes threatened 100-per-cent duties on non-branded pharmaceuticals and films.
More tariffs, however, are likely on the horizon. The U.S. Department of Commerce has launched Sec. 232 investigations into into the following products, which could result in tariffs:
- Semiconductors and semiconductor manufacturing equipment
- Processed critical minerals and derivative products
- Commercial aircraft and jet engines
- Polysilicon and its derivatives
- Unmanned aircraft systems and their parts and components
- Wind Turbines
- Robotics and industrial machinery
- Personal protective equipment, medical consumables, and medical equipment
Country tariffs - IEEPA
Alongside industry-specific duties, Mr. Trump has placed blanket tariffs on Canada and other trading partners. This are the so-called “fentanyl tariffs” placed on Canada and Mexico, and the “reciprocal tariffs” placed on other countries.
Here, Mr. Trump is using The International Emergency Economic Powers Act (IEEPA), which gives the President the ability to impose tariffs in the event of a national emergency.
The President’s use of IEEPA is being challenged in the courts, and these tariffs may ultimately be declared illegal. The U.S. Court of International Trade determined earlier this year that Mr. Trump had exceeded his authority in using IEEPA. This was upheld by a federal court of appeal, and the case was heard by the U.S. Supreme Court on Nov. 5. A ruling is expected some time in the new year.
Fentanyl tariffs: 35 per cent (with carve-outs)
Shortly after taking office, Mr. Trump placed a broad-based 25-per-cent tariff on Canada and Mexico, which he claimed was needed to push both countries to do more to address fentanyl trafficking and illegal migration. This tariff was raised to 35-per-cent on Canada in July after trade talks between Ottawa and Washington broke down.
While the headline tariff number is large, the U.S. has given Canada and Mexico a significant carve-out. Products that comply with USMCA rules of origin are not subject to the “fentanyl tariff.”
Because of the high-level of USMCA-compliance, most Canadian exports are not paying the “fentanyl” tariff. In July, more than 90 per cent of the value of Canadian exports to the U.S. were duty-free.
The Bank of Canada estimates that the average U.S. effective tariff rate on Canadian goods was 5.9 per cent in October. That’s up from 0.1 per cent before Mr. Trump’s return to the White House, but far below the 35-per-cent headline rate.
The fact that the USMCA-exemption has shielded most Canadian trade from tariffs has raised the stakes of a successful renewal of the continental trade deal, which is up for review next year.
Reciprocal tariffs: Rates differ by country
Mr. Trump has placed a baseline 10-per-cent IEEPA tariff on all trading partners, with higher rates on dozens of countries. These so-called “reciprocal” tariffs have formed the basis of trade negotiations the President has had with a number of countries.
Since the spring, the U.S. has struck deals with the following countries, which differ considerably in their details:
- The United Kingdom
- The European Union
- Japan
- South Korea
- Vietnam
- Cambodia
- China
- Indonesia
- Malaysia
- Pakistan
- Philippines
How has Canada responded?
Canada is one of only two countries, alongside China, that retaliated against U.S. tariffs with its own counter-tariffs. Most of these measures, however, have been walked-back in an effort to keep the Trump administration at the trade negotiating table.
In the spring, the federal government responded to Mr. Trump’s IEEPA and Sec. 232 tariffs with three tranches of retaliatory tariffs targeting around $100-billion worth of U.S. imports to Canada.
Ottawa quickly watered these down, offering carve-outs for U.S. products used in Canadian manufacturing and developing an remission scheme, which allowed U.S. carmakers to avoid tariffs if they maintained production in Canada.
In September, Ottawa removed most of its retaliatory tariffs, although Canadian tariffs on U.S. steel, aluminum and autos remain in place, with carve-outs.
Provincial and municipal governments have responded in their own ways, including removing alcohol from liquor store shelves and changing procurement policies to penalize U.S. companies.