Overview

• President Trump signed an executive order effective August 1 that raises duties on Canadian goods not covered by CUSMA from 25% to 35%.
• A 40% transshipment levy will apply to Canadian products rerouted through third countries to bypass the higher tariffs.
• Most Canadian exports remain exempt under CUSMA’s rules of origin, preserving roughly 90% of bilateral trade availability without new duties.
• Prime Minister Mark Carney expressed disappointment, noted that only about 1% of U.S. fentanyl seizures originate at the northern border, and pledged to continue CUSMA negotiations and strengthen border controls.
• Trump paired the Canada tariff hike with sweeping orders revising reciprocal duties on dozens of other trading partners under national-security authorities.