U.S. President Donald Trump continues to single out Canada as a bad trading partner, claiming in a recent social media post that his northern neighbour is a “tariff abuser” that charges high rates on American goods.
The vast majority of U.S. products are not subject to any tariffs under the terms of the North American free trade pact signed by the president during his first term, though recent events have muddied those waters somewhat.
"Ninety-eight or 97 per cent of goods that come into Canada flow in tariff-free," said Clifford Sosnow, who heads the Fasken law firm’s international trade and investment group.
Dairy and poultry products as well as eggs do face steep tariffs once those imports reach a certain quantity under Canada’s supply management system. The so-called tariff rate quotas put a limit on the amount of a particular good that can be imported before a higher rate applies.
For example, Canada places a tariff of 7.5 per cent on many milk and cream products if they are "within access commitment," meaning the items do not exceed an agreed-upon limit, according to the federal customs tariff schedule.
If an importer wants to go over that threshold, they face a tariff between 241 per cent and nearly 300 per cent.
In a post on Truth Social on Monday night, Trump called out the hefty duties on some farm goods, but falsely claimed that they reach 390 per cent. The steepest of them tops out at 313.5 per cent, according to the federal government's tariff schedule.
"It's a highly inaccurate description of the situation. It gives the reader the sense there's this immediate wall where dairy product can't come into Canada. And that's not true. It can come into Canada at a significant amount that's tariff-free," said Sosnow.
The U.S. also has its own tariff rate quotas in place on commodities such as sugar, he noted.
"The president doesn't mention that."
Traditionally, an administration unsatisfied with a free trade deal might negotiate for a better one, as Trump did with the Canada-United States-Mexico Agreement signed in 2018. That deal replaced the North American Free Trade Agreement, which had been in place since the 1990s and had in turn updated the U.S.-Canada Free Trade Agreement and its predecessor, the auto pact.
Dispute settlement processes baked into the CUSMA deal also allow for trade-rule tweaks. In 2023, a panel of experts ruled in Canada's favour after American dairy farmers argued that Canada's system of tariff-free dairy import permits blocks full access to the 3.5 per cent share of the Canadian market they thought they'd been granted under the revised pact.
Framing Canada as an abusive trading partner warps the nature of the two countries' long history of rules-based commerce and friendly relations, Sosnow said.
Last week, Canada imposed a 25 per cent tariff on $30 billion worth of American items ranging from melons to motorcycles in response to Trump’s sweeping tariffs on Canadian imports.
Most imports from the United States are also subject to Canada’s five per cent goods and services tax, while Canadian products face no such premium when they cross into the U.S. But that federal tax is meant to ensure American items don't enjoy an edge over those made in Canada, which are likewise subject to GST.
The U.S. has no federal sales tax on consumer goods, American-made or otherwise.
This report by The Canadian Press was first published March 11, 2025.
Christopher Reynolds, The Canadian Press
