President Donald Trump announced a plan to impose 50% tariffs on a range of Canadian imports from wine to hockey sticks, escalating trade tensions between the neighbors. The duties, invoked under the Depression-era Smoot-Hawley Tariff Act, are expected to affect roughly $20 billion worth of goods, according to economist Julian Karaguesian at McGill University.
The tariffs follow Canada's 25% retaliatory duties on U.S. autos enacted after Trump's April 2025 "Liberation Day" order. Canadian imports of American vehicles have since fallen more than 22%, while purchases from Japan, Germany, and Korea rose by nearly $3 billion. Nearly three-quarters of Canadian exports flow to the United States.
Amid the dispute, Canada is pivoting toward Europe. Trade between the EU and Canada reached 130.8 billion euros in 2025, an 81% increase from 2016. Ottawa also signed a preliminary energy deal with Germany to ship liquefied natural gas to Europe.