Canada Shifts Strategy After US Raises Tariffs

U.S. President Donald Trump raised tariffs on Canadian goods not covered by the US-Mexico-Canada Agreement (CUSMA) from 25% to 35%, citing Canada's alleged failure to curb fentanyl smuggling, though Canada accounts for only 1% of U.S. fentanyl imports. Canadian Prime Minister Mark Carney expressed disappointment but reaffirmed Canada's commitment to CUSMA while emphasizing the negative impact on key sectors such as lumber, steel, aluminum, and automobiles. In response, Canada pledged to protect domestic jobs, invest in industrial competitiveness, promote 'buy Canadian' policies, and intensify efforts to build a stronger internal economy. The Canadian government also highlighted the need to cut domestic trade barriers and reduce reliance on U.S. trade. The U.S. threatened a 40% transshipment levy on goods rerouted through third countries to evade tariffs. Trade negotiations remain ongoing, with Canada focusing on strengthening its economy amid escalating tensions.