US and Canada Maintain Trade War Over Reciprocal Tariffs

The United States and Canada remain locked in a trade war that began in February 2025, defined by reciprocal tariffs on billions of dollars in goods. Donald Trump initiated the dispute by imposing tariffs on Canadian products, prompting the Canadian government to respond with 25% retaliatory tariffs on nearly $30 billion of American goods.

The conflict escalated in May 2025 when the United States increased levies on automobiles and parts. Although the Supreme Court of the United States ruled that President Trump exceeded his authority by using the International Emergency Economic Powers Act of 1977, the administration maintained the tariffs by invoking the Trade Act of 1974.

In response to the sustained economic pressure, Canada is pursuing a closer economic relationship with the European Union. President Trump has maintained that current trade terms favor Canada and stated that the United States is in no rush to resolve the dispute.