Overview

• An executive order issued July 31 elevates duties on most Canadian imports to 35% starting August 1 under IEEPA as pressure for action on fentanyl trafficking.
• Products eligible under the 2020 USMCA remain exempt from the new rate, though attempts at tariff evasion will incur a 40% duty.
• The White House says this year’s fentanyl seizures at the northern border have already exceeded the combined total of the previous three years and alleges Canada hosts “super labs” tied to Mexican cartels.
• Ottawa has rejected U.S. assertions of Canadian inaction, denounced the tariff hike as unjustified, and warned of potential retaliatory measures.
• Experts note that most illicit opioids enter the U.S. via the southern border and caution that broad tariffs risk disrupting integrated supply chains.