Canadian Prime Minister Mark Carney is accusing the U.S. of violating the U.S.-Mexico-Canada Agreement, following new 50% tariffs against Canada announced by President Donald Trump.
In a statement posted to social media on July 20, Carney labeled the new tariffs "the latest in a series of unilateral U.S. trade actions ... in direct violation" of the USMCA. The new levies, due to take effect August 19, target more than 500 Canadian goods, including wine, hockey sticks, cement and more, nearly all of which are covered under the USCMA.
"This trade dispute has raised costs for families, particularly in the U.S.," Carney said. "Canada stands ready to engage intensively to address outstanding issues with the U.S. to the mutual benefit of our citizens."
U.S. Trade Representative Jamieson Greer defended the tariffs in a July 20 statement, claiming that Canada has continued to retaliate against the U.S. "for its efforts to rebalance trade and protect U.S. industry in national-security sensitive sectors." In response to previous Trump administration tariffs, Canada had taken American liquor off its shelves, while also imposing retaliatory tariffs on billions of dollars' worth of U.S. exports, including steel, aluminum and a range of consumer goods. The new tariffs will exclude energy products, fish, critical minerals and potash, the values of which dwarf the products targeted now.
Trump plans to implement the new tariffs under Section 338 of the Tariff Act of 1930, which gives the president the power to enact levies of up to 50% on any countries viewed to be unfairly discriminating against U.S. commerce. Unlike the tariffs overturned by the U.S. Supreme Court earlier in 2026, Section 338 grants broad powers to impose country-specific levies without the approval of Congress. However, legal challenges could still call into question whether Canada has met the statute's standard for discrimination.
As the U.S. has taken a more adversarial approach to trade with its allies, Canada has sought to plot an economic path forward that no longer includes its southern neighbor. In July, Canadian provinces Ontario and Alberta proposed a new oil pipeline between the two regions that would bypass the U.S. (the existing Enbridge Line 5 crosses through Michigan), and allow for more oil exports to Europe. In an April speech, Carney also described Canada's ties to the U.S. as a weakness that must be corrected, while pledging to double trade with non-U.S. nations by 2035.
Although the USMCA remains in place for now, Trump opted in July not to renew it, instead prompting annual reviews of the pact for the next decade, opening the door for years of contentious negotiations. Trump had originally pushed for the USMCA as a replacement for the North American Free Trade Agreement, and at the time it was signed in 2018, he praised the deal as "the largest, fairest, most balanced, and modern trade agreement ever achieved." Since then, he's criticized the pact as a temporary agreement that no longer serves U.S. interests.
