US President Donald Trump said on Friday, March 7, that he might impose new tariffs on Canadian lumber and dairy products. His statement came just a day after he paused the 25 per cent tariffs on imports.

Canada Faces Criticism for Unfair Trade

Speaking in the Oval Office, Trump criticized Canada’s trade policies. “Canada has been ripping us off for years on lumber and on dairy products,” he said. Trump noted that Canada charges a 250 per cent tariff on US dairy exports. As a result, he argued that American farmers cannot compete fairly. Frustrated, he added, “We may do it as early as today, or we’ll wait until Monday or Tuesday. We’re going to charge the same thing. It’s not fair. It never has been fair, and they’ve treated our farmers badly.”

Temporary Tariff Suspension

On Thursday, Trump had announced a one-month suspension of tariffs on Canadian and Mexican products under the US-Mexico-Canada Agreement (USMCA). Consequently, this move provided temporary relief for key sectors like agriculture and automobiles, which rely on trade with these countries. However, Trump’s latest remarks suggest he might impose retaliatory tariffs. In fact, he may match Canada’s 250 per cent duty on dairy imports.

Trade Disputes and Industry Reactions

In 2023, a trade panel ruled in Canada’s favor, stating that its high tariffs did not violate the USMCA. Nevertheless, US lawmakers, especially Wisconsin Democratic Senator Tammy Baldwin, strongly opposed the ruling. “Wisconsin dairy farmers work hard every day to bring world-class products to market, and they deserve a level playing field with their global competitors,” Baldwin said before the November 2023 ruling. She argued that the decision “flies in the face of the agreement our country made with Canada and puts our Made in Wisconsin dairy products at a disadvantage.” As a result, tensions between the US and Canada over trade continue to rise. If new tariffs are imposed, both nations could face significant economic consequences.