Donald Trump is to impose a 50% tariff on most Canadian goods, the White House announced, accusing Canada of unfairly discriminating against American cars, alcohol and dairy products. The move, likely to trigger fresh economic turmoil and raise inflation risks, marks a sharp escalation in tensions between the two closely linked economies and comes after Canada retaliated against earlier US tariffs.

The tariffs, due to take effect in 30 days, will cover a broad range of goods including wine, hockey sticks and cement, and extend to products previously shielded under the USMCA trade agreement. Energy, fish, critical minerals, potash, and items already subject to separate steel and aluminium tariffs are excluded. Trump signed three proclamations under Section 338 of the 1930 Trade Act, citing Canadian tariffs on US vehicles, restrictions on US alcohol sales in most provinces, and treatment of US cheese. Canadian prime minister Mark Carney said his government had made comprehensive proposals to resolve the dispute, arguing Trump's earlier tariffs breached the trade pact and had raised costs for US families.