President Trump has dramatically escalated trade tensions by raising tariffs on Canadian goods to 35%, marking a significant increase from the previous 25% rate. This move fulfills an earlier warning that higher tariffs were imminent unless Canada reached a new trade agreement with the United States. The new rates will go into effect immediately and are part of a broader set of tariff changes applying to dozens of countries, with new rates ranging from 15% to 40% depending on each country’s negotiation status with the U.S.

The increase in tariffs primarily affects Canadian products that do not meet the origin requirements of the Canada-U.S.-Mexico Agreement, representing a relatively small portion of Canada’s overall exports to the U.S. However, the political and economic implications are substantial, as Canada remains without a specific bilateral deal to exempt its products from the newly raised tariffs. In contrast, other major U.S. allies—such as the United Kingdom, Japan, South Korea, and the European Union—have successfully negotiated separate arrangements to avoid these higher duties.

The decision comes amid a backdrop of strained negotiations, with Canadian officials actively engaged in talks in Washington but little progress reported. President Trump has attributed the tariff hike in part to unresolved issues in Canada’s supply-managed dairy sector and broader concerns about fair trade.

The broader tariff revisions impact a wide group of countries: Syria faces rates as high as 41%, Laos and Myanmar at 40%, and Serbia and Iraq at 35%. Many others now have a base rate of 15% unless separate deals are secured. Businesses in both countries now face increased uncertainty, with potential impacts on prices and supply chains as the new tariffs ripple through the North American market. These developments signal a turn toward more aggressive protectionist trade measures from the White House, with significant implications for global commerce.