Canada Claps Back At 'Unjustified' Trump Tariffs On Dairy, Lumber

President Donald Trump threatened to impose reciprocal tariffs on Canadian lumber and dairy products as early as Friday, reigniting trade tensions with a key U.S. partner and ally.

What Happened: Trump accused Canada of “ripping us off for years” with a 250% tariff on U.S. dairy, which he said hurts American farmers.

He warned that Canada would face matching tariffs unless it reduced its own, Bloomberg reports.

This announcement comes just days after Trump imposed 25% tariffs on Mexico and Canada only to delay some tariffs until April 2.

Canada's Trade Minister Mary Ng called the potential dairy tariffs “completely unjustified” and emphasized efforts to remove existing tariffs.

The U.S. and Canada have longstanding disputes over dairy and lumber. American lumber producers claim that Canada's system effectively subsidizes its industry, a charge Canada denies. Before the new tariffs, U.S. duties on Canadian lumber ranged from 11.5% to 17.3%.

Canada’s dairy system employs quotas and high tariffs to protect domestic production.

See Also: Powell Stresses Patience As Fed Navigates Market Uncertainty, Trade Turmoil

Why It Matters: Uncertainty about Trump’s broader trade strategy remains.

These actions stoked fears about the impact on the U.S. economy, which is grappling with sluggish factory activity, inflation, and declining consumer confidence.

Trump argues that his tariff approach is boosting U.S. manufacturing jobs, but critics insist trade levies will do the opposite.

Nobel laureate Paul Krugman says the tariffs could rewind economic progress back 90 years.

"What the tariffs would do is shrink our economy. They would cause us to sell less of the goods we currently export — that is, stuff we’re relatively good at producing — and more stuff we aren’t that good at producing,” he warned in October. “The effect would be to make the economy less efficient and poorer.”

Trump’s announcement coincided with a mixed February jobs report.

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