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President Donald Trump has issued a fresh warning of new tariffs on Canadian lumber and dairy products, just a day after offering Canada a one-month suspension on widespread 25% tariffs. The new threat could see tariffs imposed as soon as Friday, adding uncertainty to the already volatile trade relations between the two countries.
US to Respond With Equivalent Tariffs
“Canada has been ripping us off for years on lumber and on dairy products,” Trump said during an Oval Office address on Friday. The President specifically pointed to Canada’s approximately 250% tariff on US dairy exports, asserting that the United States would respond with equivalent tariffs.
“We may do it as early as today, or we’ll wait until Monday or Tuesday,” Trump added. “We’re going to charge the same thing. It’s not fair. It never has been fair, and they’ve treated our farmers badly.”
The threat of new tariffs caused a sharp reaction in financial markets. Stocks, which had already opened lower following a mixed jobs report, fell further after Trump’s comments. The Dow Jones Industrial Average dropped by 300 points, or 0.7%. The broader S&P 500 index declined by 0.9%, while the tech-heavy Nasdaq saw a 1.2% drop, deepening its slide into correction territory after a 10% decline from its recent high.
Contradictory Signals for Businesses and Consumers
The latest announcement came as a surprise to many businesses and consumers, especially following Trump’s decision on Thursday to grant a one-month reprieve on tariffs for Canada and Mexico on products compliant with the USMCA free trade treaty. The temporary pause had offered a sense of relief to industries heavily reliant on cross-border trade, particularly the automotive and agricultural sectors.
Trump’s fluctuating stance on tariffs has left investors and businesses grappling with uncertainty. The potential escalation of trade tensions with Canada could have significant implications for both countries’ economies, particularly in sectors like agriculture and manufacturing.
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