President Donald Trump said he may implement reciprocal tariffs on Canadian lumber and dairy products as soon as Friday, threatening again to disrupt trade with a major US partner and reigniting a fight over two industries that have long been the center of cross-border disputes.
“Canada has been ripping us off for years on tariffs for lumber and for dairy products. 250% — nobody ever talks about that — 250% tariff — which is taking advantage of our farmers. So that’s not going to happen anymore,” Trump said Friday in the Oval Office.
“They’ll be met with the exact same tariff unless they drop it, and that’s what reciprocal means. And we may do it as early as today, or we’ll wait till Monday or Tuesday, but that’s what we’re going to do. We’re going to charge the same thing. It’s not fair,” he added.
Trump’s comments cap a tumultuous week that saw him impose 25% tariffs on the largest U.S. trading partners, Mexico and Canada, and double levies against the world’s second-largest economy, China, to 20%. Those moves sparked worries that Trump’s sweeping trade agenda would further strain a US economy facing headwinds that include stagnating factory activity, still simmering inflation and ebbing consumer confidence.
Trump’s comments cap a tumultuous week that saw him impose 25% tariffs on the largest U.S. trading partners, Mexico and Canada, and double levies against the world’s second-largest economy, China, to 20%. Those moves sparked worries that Trump’s sweeping trade agenda would further strain a US economy facing headwinds that include stagnating factory activity, still simmering inflation and ebbing consumer confidence.
Trump on Thursday delayed those tariffs for Mexican and Canadian goods covered under a free trade agreement until April 2, offering a brief reprieve but spurring uncertainty over a trade strategy that has gripped markets and businesses. He’s still promising further tariffs on Canada — including the lumber and dairy duties mentioned Friday, steel and aluminum tariffs set to be enacted this coming Wednesday and a wave of sectoral and country-specific tariffs he’s planning for April 2.
“Our top priority is to work to get these tariffs removed and we just must do that every single day,” Canadian Trade Minister Mary Ng said Friday at a press conference. “With respect to dairy, I learned about it just as I was walking into this press conference and these tariffs, if imposed in that order of magnitude, are completely unjustified.”
Key Sectors
The US and Canada have long been at odds over dairy and lumber, as Trump targets two critical sectors where the chances of Canada clawing back their levies are low.
American lumber producers have alleged that the Canadian lumber system amounts to a subsidy — a charge Canadians deny — and the countries have fought over tariffs on those products for decades. Even before Trump’s tariff barrage began this week, the US already applied levies to Canadian lumber, ranging from a combined rate of 11.5% to 17.3%, according to Canadian government data.
Canada’s dairy system, meanwhile, is set up with domestic import and production quotas — accompanied by high tariffs. Major changes to that system, which concentrates production in domestic hands and is a political lightning rod, are unlikely and would almost surely require large-scale payouts to Canadian farmers.
Still, Canada is the second-largest dairy export market for American producers, who have been grappling with oversupply. Trump’s renegotiation of the continental trade pact in his first term included key dairy concessions from Canada — posing one of the final issues resolved in talks. The US-Mexico-Canada agreement expanded the amount of dairy products that US farmers and companies can export to Canada — but if they exceed quotas, the products are subject to very high tariffs.
Trump on Friday described his proposed lumber and dairy tariffs as reciprocal, which is the same phrasing he’s used to describe the broader April duties he plans to implement on many countries. The US is preparing a set percentage for each country that the administration says would match both tariff and other barriers to American imports.
Manufacturing Jobs
Trump defended his tariff strategy on Friday, saying that it was helping spur domestic manufacturing jobs in the US — in particular with the auto industry — reversing what he said was a downward slide under his predecessor, Joe Biden.
“We’ve not only stopped that manufacturing collapse, but we’ve begun to rapidly reverse it and get major gains,” Trump said. “We created almost 9,000 new jobs in the auto production field. And the reason for that is largely they think things are happening so they’re already geared up.”
Still, auto industry leaders had pushed for relief from Trump’s initial tariff declaration against Canada and Mexico. Auto production is highly integrated with supply chains that crisscross those countries and the US. Automobiles and parts that meet requirements under the free trade pact are among the products Trump delayed tariffs on Thursday.
Trump’s comments followed a jobs report that presented a mixed snapshot of the labor market as the president overhauls US government policy by implementing tariff hikes and moving to slash federal agencies’ spending and workers. Job growth steadied in February, with nonfarm payrolls increasing 151,000 after a downward revision to the prior month. The unemployment rate, though, rose to 4.1%.
Adding to Trump’s woes, the Nasdaq 100 Index on Friday sank into a correction — a more than 10% drop — as investors soured on tech stocks that have led a market rally in recent years. Trump has long looked to the markets as validation for his economic policies, even though he sought to downplay that metric earlier this week following an selloff sparked by his tariffs on Canada and Mexico
