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Following a brief pause on implementing nearly universal 25% tariffs on Canada, President Donald Trump has now threatened to impose new tariffs on Canadian lumber and dairy products by this Friday.
“Canada has been taking advantage of us for years regarding lumber and dairy products,” Trump stated during an Oval Office speech on Friday, referencing Canada’s approximate 250% tariff on US dairy exports. He added that the US plans to match those tariffs one-for-one.
“We might implement them as soon as today, or we could hold off until Monday or Tuesday,” Trump mentioned. “We’re going to impose equivalent charges. It’s unjust. It never should have been this way, and they have treated our farmers poorly.”
Stocks saw a decline at the beginning of the day following a mixed jobs report after Trump’s tariff announcement but managed to recover some losses. The Dow was up roughly 45 points, or 0.1%. The S&P 500 decreased by 0.1%, while the Nasdaq fell by another 0.1%, having already entered correction territory with a 10% drop from its last peak.
Investors, businesses, and consumers experienced whiplash from Trump’s announcement. Just a day prior, Trump had declared a one-month hiatus on all tariffs on Canada and Mexico for products that fall under the US-Mexico-Canada Agreement (USMCA), which provided significant relief to many industries, particularly in the auto and agricultural sectors.
Canada imposes substantial tariffs on various dairy goods, including a staggering 241% on milk, which has outraged American dairy producers. A trade dispute panel ruled in favor of Canada in 2023, stating that such high import tariffs did not breach the USMCA.
Wisconsin’s Democratic Senator Tammy Baldwin criticized the ruling, claiming it places an unfair burden on her state’s dairy industry.
“Wisconsin dairy farmers dedicate themselves to delivering top-quality products to the market, and they deserve a fair competitive landscape with their international counterparts,” Baldwin stated following the November 2023 decision. “This ruling contradicts the agreement our nation reached with Canada, putting Wisconsin-made dairy products at a disadvantage.”
For several weeks, Trump has been vocal about Canadian tariffs on US lumber, asserting that the US should retaliate accordingly. He has mentioned that America could manage without Canadian lumber.
An executive order signed by Trump on Saturday stated that the US possesses “plenty of timber resources that adequately meet our domestic timber production requirements.” However, industry experts caution that tariffs could lead to increased lumber and construction costs, subsequently raising housing prices for consumers.
This story is developing and will be updated accordingly.
