President Donald Trump signed orders Monday to hammer certain Canadian products with 50% tariffs, escalating trade tensions with the United States' northern neighbour.
"President Trump took decisive action to hold Canada accountable for its retaliation and discrimination," United States Trade Representative Jamieson Greer said in a statement.
The new tariffs are set to come into force in 30 days on a wide array of goods, ranging from hockey sticks to wine to cement.
Greer said the measure is a response to provincial bans on U.S. liquor, Canada's supply-managed dairy system and quotas on certain U.S. vehicles.
Prime Minister Mark Carney said the move "is the latest in a series of unilateral U.S. trade actions that began with the U.S. imposing a series of tariffs in direct violation of the Canada-United States-Mexico Agreement," better known as CUSMA.
"In response to these measures and threats to Canadian sovereignty, provinces, territories, and Canadians from coast to coast to coast have stood together, taking the necessary actions to support our economy and defend our workers, farmers, businesses, and families," Carney said in a statement.
Carney said Ottawa has recognized the U.S. is transforming its trade relationships, and his Liberal government has made a series of proposals to resolve disputes and modernize the trilateral trade pact.
The Trump administration said earlier in July that it was not renewing the trade agreement, triggering rolling annual reviews for up to 10 years, at which point CUSMA would expire unless an extension is agreed to.
The opposition Conservatives said "Canadians are not a punching bag" and criticized Carney for not making a deal to protect Canada's workers.
"President Trump is wrong to target Canadian workers and must reverse these tariffs immediately," said a joint statement from Conservative MPs Shuvaloy Majumdar, Eric Duncan, Stephanie Kusie and Pierre Paul-Hus. "And Mark Carney was wrong to surrender Canada's leverage for over a year and a half, without actually working to secure the deal he promised."
A senior White House official, who spoke to reporters on background, said that, unlike many of Trump's other tariffs, the new duties will have no exemptions for goods compliant under CUSMA.
The official said the new tariffs will not apply to energy, potash, critical minerals or other goods already being slammed by Trump's separate sector-specific tariffs on steel, aluminum, automobiles and cabinetry.
The White House official repeated a Trump administration talking point claiming that only two countries have retaliated against U.S. tariffs: China and Canada.
Canada imposed targeted retaliatory tariffs in response to Trump's duties last year. It has since rolled back many of those tariffs to smooth trade relations.
Separately, all of Canada's provincial and territorial liquor boards stopped purchasing American alcohol in response to Trump's tariffs and threats of annexation.
While Saskatchewan and Alberta have since returned American booze to the shelves, major purchasing provinces like Ontario and Quebec have not resumed stocking U.S. alcohol.
The provincial liquor bans have been a thorn in the side of the Trump administration and many Republican lawmakers.
Ontario Premier Doug Ford has said he'll keep liquor off the shelves until CUSMA is renewed. Ford remained defiant Monday in response to the increasing tariff threats.
"If these tariffs proceed, Canada should respond tariff for tariff, dollar for dollar," Ford posted on social media.
Chris Swonger, president of the Distilled Spirits Council of the United States, said Monday they hoped the issue could be resolved without further escalation and there's concern the tariffs could harm the industry more.
Trump's automobile tariffs have been hammering the Canadian industry. But the White House criticized Ottawa's decision to impose tariff-free quotas on imports of vehicles from the United States built by automakers that were moving production out of Canada.
"Canada also administers these quotas in a way that compels U.S. auto companies to invest in production in Canada instead of the United States," a White House fact sheet said.
Canada's supply-managed dairy system has long been an irritant in the Canada-U.S. trade relationship. The White House accused Canada's tariff-rate quotas on U.S. cheese of being more restrictive than those on similar imports from the European Union.
It had been rumoured for months that the Trump administration would use Section 338 of the Tariff Act of 1930 to implement the new duties — even though the law has never been used for that purpose.
The White House said Section 338 empowers the president to impose tariffs when a country puts U.S. exporters at a disadvantage relative to exporters in other countries.
The White House official said the statute doesn't specify conditions that would require the duties to be removed but added the Trump administration is taking it one step at a time.
Alberta Premier Danielle Smith said in a social media post Monday that the new tariffs will hurt both Canadian and American businesses and workers.
"Tariffs are an economically destructive policy and have been proven time and again to hurt the people of the countries that impose them," she said.
These tariffs are not connected to Trump's recent threat to hit Canada with higher tariffs because of wildfire smoke. It is also different from the Trump administration's investigation into forced labour in supply chains, which could also result in new duties.
CUSMA was negotiated during the first Trump administration to replace the North American Free Trade Agreement (NAFTA). The sometimes volatile negotiations were a key test for Ottawa, but ultimately an agreement was reached that was praised by all three countries.
Candace Laing, president and CEO of the Canadian Chamber of Commerce, said they "knew this would get bumpier before landing." In an emailed statement, Laing said it is a "regrettable escalation," but Canada has 30 days before the tariffs come into place.
"Both sides need to use this window to make meaningful progress in advancing formal talks," she said. "There are important discussions to get to that will strengthen, not threaten, our shared prosperity."
This report by The Canadian Press was first published July 21, 2026.
— with files from Nick Murray in Ottawa and Jack Farrell in Edmonton
