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Trump slaps 50% tariffs on Canada and Carney vows to ‘intensify’ trade talks

July 21, 2026
in Business
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Trump slaps 50% tariffs on Canada and Carney vows to ‘intensify’ trade talks
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But there is no mention of wildfires in the executive orders that Trump signed on Monday.

Instead, the three proclamations list US trade irritants that were previously known to Canada related to cars, dairy and alcohol – signalling a breakdown of trade negotiations between the two countries.

On cars, Trump is accusing Canada of charging a tax on US motor vehicles and parts that are not covered under USMCA.

He argues it is “unreasonable” and that Canada has discriminated against the US by not charging other countries a similar tax.

Automotive manufacturing in North America is highly integrated between Canada, the US and Mexico.

But Trump’s Commerce Secretary Howard Lutnick has said in the past that he believes Canada should “come second” to the US.

Trump has also named cars in the past as one issue where the two countries have competing interests.

Dairy, meanwhile, has long been a problem for the US, specifically Canada’s supply management system, which sets limits on foreign imports. Those that exceed the limit are charged a tariff upwards of 300%.

And lastly, the enduring boycott of US booze by most Canadian provinces has become a major sore point for the Americans since it was imposed last year.

Canadian premiers have said repeatedly that the boycott will be lifted if the US removes its tariffs on key Canadian sectors, including metals and automobiles.

Canadian trade negotiators have been working on trying to secure a deal that would at least reduce some of the current US tariffs.

The BBC has contacted the White House and the Canadian government for comment.

Earlier this year, the US chose not to renew the USMCA in its current form.

Canada and Mexico sought a renewal of the trade agreement, but the US wants to make changes to the deal, which was negotiated during Trump’s first term in office.

As it stands, the treaty will continue to govern North American trade over the next decade on a rolling basis, requiring annual reviews.

In February, the US Supreme Court struck down sweeping international tariffs imposed by Trump through the International Emergency Economic Powers Act of 1977.

The justices ruled that the president had exceeded his authority when he announced the duties under a law reserved for national emergencies.

The White House vowed at the time that it would invoke other mechanisms to impose import taxes.

Monday’s duties were being introduced under Section 338 of the 1930 Tariff Act, which covers trade discrimination rather than national emergencies.

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