Ottawa weighs its next move while exporters brace for a third, steeper round of duties
A second set of United States tariffs on Canadian exports took effect on Friday, stacking a new layer of pressure on exporters days after Washington imposed separate 50 percent duties and weeks before those larger levies are due to begin on August 19.
The new duties of 10 percent apply to Canada and dozens of other countries over alleged forced-labour violations, CNBC reported, and replaced a temporary 10 percent global tariff that expired at 12:01 am ET the same day.
Brought under Section 301 of the Trade Act of 1974, the measure covers 99.4 percent of US imports, according to the Office of the US Trade Representative.
Goods compliant under the Canada-United States-Mexico Agreement (CUSMA) may be exempt, though officials have not confirmed that.
The shift toward established trade statutes signals permanence to investors weighing how long the regime will last.
Reuters reported that Trump's team is moving into a new phase, rebuilding tariffs through more traditional and court-tested laws after the US Supreme Court struck down his earlier “Liberation Day” duties in February.
“The tariff wall is being rebuilt strong brick by strong brick, and it's very durable,” Josh Lipsky, chair of international economics at the Atlantic Council, told the Reuters.
Dan Ujczo, associate general counsel at Canadian oil producer Cenovus Energy, put a timeline on it.
The country is "at the end of the beginning of the Trump tariff agenda," he told Reuters, adding that large parts of the policy would be "fully in effect" by summer's end.
The uncertainty is already reshaping corporate spending.
Dennis Darby, president and chief executive of Canadian Manufacturers & Exporters, told BNN Bloomberg the 50 percent tariffs hit roughly US$20bn, or about $28bn, of goods that had crossed the border tariff-free, and that many affected firms had stayed largely exempt through more than a year of friction.
Businesses are now less likely to invest in production, buy equipment, or build factories, Darby said, and 73 percent of the group's members expect a failure to renew CUSMA to weaken their confidence and outlook.
Prime Minister Mark Carney would not rule out retaliation.
"Everything is on the table" in negotiations, Carney said after a four-hour meeting with the premiers in Charlottetown on July 23, according to BNN Bloomberg.
It "would be counterproductive at this stage to respond in advance," he added.
The premiers split on how hard to push back.
Ontario Premier Doug Ford urged Ottawa to answer forcefully, telling reporters, “We have to hit them back with everything we have until they feel the pain,” and calling for limits on exports of potash, minerals, and energy, all of which the New York Times noted sit outside the August tariffs.
Alberta Premier Danielle Smith, by contrast, said using oil as a bargaining chip would not work for her province, and the Times reported that further retaliation is not widely endorsed by economists.
Adding to the unpredictability, Trump opened a fresh front on Friday, threatening tariffs over wildfire smoke drifting into the US.
“We're going to put a big tariff on Canada because of the smoke,” he told reporters, according to CBC News.
Laura Dawson of the Future Borders Coalition told CBC the threat has no legal footing: “there's absolutely no basis in trade law for wildfire smoke,” she said.
Ottawa is moving to cushion the blow and reduce reliance on the US market.
British Columbia Premier David Eby said Carney told him a federal support fund worth $1.5bn remains available to affected businesses, The Canadian Press reported.
The government has signed a free trade agreement with Ecuador and a partnership deal with the United Arab Emirates.
Those deals, Stuart Trew of the Canadian Centre for Policy Alternatives told BNN Bloomberg, "don't achieve the diversification that the Carney government has been saying they need."
With the August 19 deadline set and unofficial talks continuing, McCarthy Tétrault lawyer Ljiljana Stanić told CTV News Channel that Carney may have to concede on long-standing irritants such as dairy and lumber to reach a deal inside the 30-day window.
