Trump tariffs on Canada hit 50% as Carney weighs all options

Canadian Prime Minister Mark Carney declared that his government is considering “all options” after Donald Trump announced a dramatic escalation in the trade war between the two countries, slapping 50% tariffs on Canadian goods in a move that stunned officials in Ottawa and rattled markets on both sides of the border.

The announcement, made by Trump on Thursday, represents a sharp jump from the 25% duties that had already been straining Canada-U.S. relations for months. The new rate applies broadly across Canadian exports, including auto parts, lumber, and agricultural products — sectors that together account for hundreds of billions of dollars in annual trade.

Carney’s response: measured but firm

Speaking to reporters outside Rideau Cottage, Carney didn’t mince words. He called the tariffs “unjustified and damaging” and said his government would respond with “equivalent force” if diplomatic channels failed to produce results within days. He stopped short of announcing specific retaliatory measures but made clear that nothing is off the table.

“Canada will not be pushed around,” Carney said. “We have tools available to us and we will use them.”

A senior government official, speaking on background, confirmed that Ottawa is reviewing a package of countermeasures that could target American goods worth up to $60 billion CAD. That’s a significant jump from the roughly $30 billion CAD in retaliatory tariffs Canada had previously threatened.

Markets rattled, industries alarmed

The loonie dropped nearly 1.4 cents against the U.S. dollar within hours of Trump’s announcement. The TSX fell sharply, with auto and energy stocks taking the worst of it. Ford and GM suppliers with Canadian operations saw shares slide between 4% and 7% by midday.

The Canadian Manufacturers and Exporters association said the new tariffs could cost the sector more than 150,000 jobs if left in place through the end of the year. That’s not a hypothetical — it’s a projection based on what the 25% rate was already doing to order books.

This is a five-alarm moment for Canadian industry.

What’s driving Trump’s escalation

Trump framed the move as a response to what he called Canada’s “unfair trade practices” and its failure to do enough to stop fentanyl from crossing into the United States. But trade analysts pointed out that Canadian exports of fentanyl precursors are negligible compared to those from other countries. The timing, many observers noted, looks more political than practical.

Still, the White House showed no sign of backing down. A spokesperson said the 50% rate would remain until Canada “meets its obligations” — without defining what that means in concrete terms.

What comes next

Carney is expected to speak with Trump directly in the coming days, and Canadian officials are already working the phones in Washington. The G7 summit in Alberta this June now looms as a potential flashpoint. Whether cooler heads prevail or the dispute deepens into a full-blown trade war could depend on the next 72 hours.