President Trump signed an Executive Order to increase the tariff on Canada from 25% to 35%, effective August 1, 2025, as part of addressing a national emergency related to drug trafficking.

The Prediction in Context

Source: www.whitehouse.gov

Today, President Donald J. Trump signed an Executive Order increasing the tariff on Canada from 25% to 35%, with the higher tariff set to go into effect on August 1, 2025. Shortly after returning to office, President Trump declared a national emergency under the International Emergency Economic Powers Act (IEEPA) to address, among other things, the public health crisis caused by fentanyl and illicit drugs flowing across the northern border into the United States. Canada has failed to cooperate in curbing the ongoing flood of fentanyl and other illicit drugs, and it has retaliated against the United States for the President's actions to address this unusual and extraordinary threat to the United States. In response to Canada's continued inaction and retaliation, President Trump has found it necessary to increase the tariff on Canada from 25% to 35% to effectively address the existing emergency. Goods qualifying for preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA) continue to remain not subject to the IEEPA Canada tariffs.