Tariffs in Canada: What’s The Latest?

On February 20, 2026, the U.S. Supreme Court ruled that President Donald Trump couldn’t use emergency powers to impose certain tariffs, clearing the way for many of the levies implemented in 2025 to be reversed.

Trump had relied on the International Emergency Economic Powers Act (IEEPA) as a basis for the tariff offensive, asserting that tariffs were needed to address dual “emergencies”:

The Supreme Court disagreed and rejected his approach, ruling the IEEPA does not give the president authority to create tariffs. That means tariffs based on the IEEPA have been struck down.

That said, not all tariffs disappeared. Any tariff based on what the Supreme Court deems a legitimate, legal justification is allowed to remain. That includes several disruptive, sector-specific tariffs on Canadian cars, aluminum, steel and lumber, which were imposed under different legal authorities than the IEEPA tariffs

After the Court handed down its decision, Trump wasted no time rolling out new blanket tariffs. On February 20, he declared 10% levies on goods coming into America, citing Section 122 of the Trade Act of 1974, which allows temporary, across-the-board tariffs for up to 150 days. In a Truth Social post on February 22, he said he was intending to up the tariff rate to 15%.

These new tariffs are expected to have a limited impact on Canadian goods, as they don’t apply to imports that comply with the Canada-US-Mexico Agreement (CUSMA), or those that are already subject to Trump’s legitimate tariffs.

Trump last increased tariffs on Canada — an additional 10% charge on goods that don’t comply with CUSMA — on October 25, 2025, in response to a television ad paid for by the Ontario government. According to RBC, about 6% of the goods Canada ships to the U.S. are non-CUSMA compliant.

A tariff timeline

Why is the U.S. imposing tariffs on Canada?

A country may put tariffs into place for a variety of reasons, such as:

Trump's justification for the tariffs mostly focused on the "flow" of fentanyl and undocumented immigrants into the U.S. from Canada — claims with little statistical basis that proved somewhat useful as a bargaining chip.

"The United States has justified its most recent trade action on the basis of the cross-border flow of fentanyl, despite the fact that Canada accounts for only 1% of U.S. fentanyl imports and has been working intensively to further reduce these volumes," Carney stated on August 1.

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Canada's retaliatory tariffs

On September 1, 2025, Canada removed the counter-tariffs that had been placed on U.S. goods since March 2025. Prior to the repeal, tariffs had affected over 1,800 goods, including:

Counter-tariffs are still being charged on U.S. steel, aluminum and automobiles.

How could these tariffs affect you?

Whatever the intention, tariffs often have negative consequences for consumers — in both countries involved.

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The potential effects of Trump’s tariffs on Canada include:

Canada exports billions of dollars in goods and services to the United States each day.

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If demand for these goods were to suddenly dry up because American companies don’t want — or can't afford — to pay tariffs, it could have dire consequences for the economy, adding to broader fears of a recession.

While a recession has yet to reveal itself, tariffs are chipping away at Canada’s economic growth. The Bank of Canada highlighted weak export activity in its January 2026 Monetary Policy Report, calculating that exports dipped by approximately 4% since tariffs were implemented.

“Growth in gross domestic product (GDP) likely stalled in the fourth quarter [of 2025],” the Bank wrote. “Quarterly growth has been volatile, largely due to sharp movements in trade and inventories.”

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Tariff basics you should know

At their simplest, tariffs are taxes applied to goods that are imported from a foreign country. Tariffs aren’t new, in fact, nearly all developed countries impose some kind of tariff.

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There are a few main types:

Who pays tariffs?

Tariffs are paid by the companies who import foreign goods — not the exporting countries.

The U.S. companies that import Canadian goods will pay the tariffs announced by Trump. Canadian companies will pay the tariffs maintained by Carney.

Companies often raise their prices to offset the cost of tariffs. In these cases, consumers might wind up “paying for” the tariffs, but they don’t literally pay the tariffs themselves.

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This story will be updated as events progress.