Trump Threatens Tariffs on Canada Over Dairy and Lumber Disputes

U.S. President Donald Trump has renewed his criticism of Canada’s high tariffs on dairy and lumber, warning of potential reciprocal tariffs. Speaking at the Oval Office, Trump accused Canada of unfair trade practices, citing tariffs of up to 250% on dairy products and high duties on lumber.

Trump said the U.S. may impose matching tariffs as early as next week unless Canada reduces its trade barriers. He also mentioned India’s high tariffs but noted that the country has agreed to lower import duties.

The U.S.-Mexico-Canada Agreement (USMCA) allows most trade to flow tariff-free, but Canada’s supply management system enforces strict quotas and high tariffs on dairy imports. The U.S. has long challenged Canada’s allocation of USMCA dairy quotas, claiming unfair restrictions. Meanwhile, U.S. softwood lumber imports from Canada already face anti-dumping and anti-subsidy duties of about 14.5%.

Last week, Trump ordered a national security review of global lumber imports, potentially increasing tariffs on Canadian wood. He also suspended new 25% tariffs on Canadian and Mexican goods for 30 days, citing concerns over the fentanyl crisis and auto industry stability. However, he warned that from April 2, all tariffs would become reciprocal.

White House trade adviser Peter Navarro said the U.S. tariff plan would reflect the imbalance in trade barriers, with adjustments based on country-specific and industry-specific investigations.

Next week, Trump’s administration is set to raise tariffs on steel and aluminum, ending exemptions for Canadian and Mexican imports. The decision, which affects products like steel wire and bulldozer blades, could strain U.S.-Canada trade relations further. Canadian Industry Minister Francois-Philippe Champagne expressed frustration over shifting U.S. demands, urging a return to stable trade relations.