2025 U.S.–Canada trade war timeline

In 2025, Canadian businesses and communities face an unprecedented economic challenge as the ongoing trade and tariff war with the United States reshapes decades of cross-border cooperation. This conflict has triggered sweeping tariffs on key sectors — from steel and aluminum to automobiles and consumer goods — prompting robust federal and provincial responses aimed at protecting Canadian jobs, industries, and economic sovereignty.

Behind the headlines and policy announcements lie real impacts felt by workers, manufacturers, farmers, and service providers across the country, along with determined efforts to adapt, innovate, and build resilience.

At Baker Tilly, we understand the uncertainty and complexity this creates for professional services firms and their clients. Our comprehensive insights and guidance are designed to help you navigate this turbulent landscape with clarity and confidence — turning disruption into opportunity through strategic tax planning, compliance expertise, and proactive risk management.

Together, we stand with Canadian businesses in weathering this storm and positioning for long-term success.

Timeline of events

Liberation day developments

U.S. President Donald Trump announced his sweeping "reciprocal tariffs" in a White House address, targeting countries with higher import duties than the U.S. For now, Canada is largely exempt from these global levies due to ongoing negotiations.  

Key U.S. measures:

• Establishes a 10% baseline tariff on imports from all countries not covered by existing trade agreements.
• Imposes higher rates on specific nations: 34% on China, 20% on the EU, 26% on India, and 25% on Japan. 
• Maintains 25% tariffs on foreign-made automobiles (effective April 3), excluding USMCA-compliant vehicles. 
• Leaves steel and aluminum tariffs (25%) unchanged.  

Canada-specific exemptions:

• USMCA-compliant goods are exempt from new reciprocal tariffs.
• Temporary pause on 25% non-energy tariffs (originally tied to border security) remains under review.  

Canada's response

• Prime Minister Mark Carney convenes an emergency cabinet meeting and consults the Canada-U.S. Relations Council to formulate a response. 
  • Retaliatory tariffs: Canada maintains 25% tariffs on $30 billion of U.S. goods (e.g., orange juice, appliances, alcohol) and $29.8 billion in steel/aluminum countermeasures enacted March 12–13. 
  • Strategic proposals: Carney expresses openness to a zero-tariff deal with the U.S. if President Trump unilaterally lifts all duties, as revealed by Ontario Premier Doug Ford.  

Ongoing uncertainties  

• The U.S. has yet to clarify whether the 25% non-energy tariffs (paused since February 3) will be reinstated. 
• Auto sector exemptions under USMCA remain contingent on the U.S. Commerce Department finalizing rules for taxing non-American vehicle components. 
• Inflation risks continue in both countries, with the Canadian dollar hovering near 70 cents USD and markets reacting volatilely to tariff news.  

Future actions  

• Canada’s additional $29.8 billion retaliatory tariffs to take full effect April 2.
• Further negotiations are expected post-Canadian federal election.