Trump hikes tariff on Canada to 35% amid fentanyl crisis
The decision comes under emergency powers invoked through the International Emergency Economic Powers Act (IEEPA), originally declared to address what the White House called 'an unusual and extraordinary threat' posed by the influx of fentanyl and other synthetic opioids from Canada.
President Donald Trump has raised tariffs on Canadian imports from 25 per cent to 35 per cent, effective August 1, 2025, citing Canada's failure to curb fentanyl trafficking and retaliatory trade actions. The order, issued under IEEPA, exempts USMCA-eligible goods. Transhipped goods will face a 40 per cent duty as the US intensifies efforts to combat the opioid crisis.
The order accuses Canada of failing to take meaningful steps to dismantle cross-border drug networks, including 'super labs' allegedly operating in western Canada capable of producing up to 66 pounds of fentanyl per week. US officials say fentanyl seizures at the northern border this fiscal have already exceeded the combined total of the past three years, with the quantity seized reportedly potent enough to kill over 16 million Americans.
President Trump also cited Canadian retaliation against earlier US trade actions, framing the tariff hike as both a national security response and a proportional countermeasure.
'Canada's refusal to cooperate in dismantling these trafficking operations and their retaliatory stance on trade measures leave the United States no choice,' the Executive Order states.
The higher tariffs will not apply to goods qualifying under the US–Mexico–Canada Agreement (USMCA), which remain exempt. However, any Canadian goods found to be transhipped through third countries to avoid the new tariff will be subjected to a punitive 40 per cent duty rate.
The latest move follows Trump's November 2024 pledge to impose tariffs on both Mexico and Canada for what he called 'ridiculous Open Borders.' Canada received a 25 per cent tariff in February under EO 14193, followed by further presidential determinations in March citing Canada's inadequate progress on narcotics control.
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