25% tariffs on Canada and Mexico

Summary

President Trump signed executive orders on February 1, 2025, imposing 25% tariffs on all goods from Canada and Mexico (10% on Canadian energy), invoking IEEPA authority over a declared national emergency. These tariffs undercut the USMCA trade agreement that his own first administration negotiated.

What happened

The tariffs took effect March 4, 2025. Canada responded the same day with 25% tariffs on C$30 billion of U.S. goods, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025. Executive orders signed March 6, 2025 exempted goods qualifying under USMCA from the duties from March 7 (and cut the rate on non-qualifying Canadian potash to 10%); the April 2, 2025 reciprocal-tariff order kept that exemption in place. The Supreme Court's February 20, 2026, IEEPA ruling ultimately invalidated the legal basis, and a replacement 10% Section 122 import surcharge was proclaimed the same day, in effect from February 24 through July 24, 2026.

Impact on the United States

The Brookings Institution projected the tariffs would reduce U.S. economic growth, reduce jobs, cause wages to fall and prices to rise, calling them a "blow to all 3 economies"; in its model U.S. motor vehicle exports to Canada contract 25%, and 55% with Canadian retaliation.

Global ripple effects

Canada's retaliatory tariffs targeted U.S. agricultural products, orange juice, appliances, and other consumer goods, reducing revenues for U.S. exporters. Mexico's retaliatory posture added to American agricultural export losses.

Documented effects

1. Mar 4, 2025Canada imposed 25% retaliatory tariffs on C$30 billion of U.S. goods (including orange juice, appliances and apparel) effective March 4, 2025, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025.[6]
2. Aug 2025Yale Budget Lab estimated all 2025 tariffs (including Canada/Mexico duties) cost the average U.S. household an equivalent of $2,400 in lost income in the short run (as of August 2025).[2]

Why this is rated severe

25% tariffs on Canada and Mexico were projected to lower US growth and jobs and raise prices (Brookings), and disrupted integrated North American supply chains.

IEEPA legal basis struck down by the Supreme Court on Feb 20, 2026; the duties were ended by Executive Order 14389 of Feb 20, 2026

Corrections & updates [9]

Every change to a fact on this page after publication is logged here, newest first.

1. Sep 29, 2026CorrectedStatus

   The entry was marked "in effect (modified)", but the IEEPA duties on Canada and Mexico no longer apply: the Supreme Court held on Feb 20, 2026 (6-3) that IEEPA does not authorize tariffs, and Executive Order 14389 of the same day ended the duties imposed under Executive Orders 14193 (Canada) and 14194 (Mexico).[3][4]

   Previously

   in-effect (modified)

   Now

   reversed (IEEPA legal basis struck down by the Supreme Court on Feb 20, 2026; the duties were ended by Executive Order 14389 of Feb 20, 2026)

2. Sep 29, 2026CorrectedDate

   The entry said the tariffs took effect February 4, 2025 and that Canada retaliated on $155 billion CAD of U.S. goods. The Tax Foundation tariff tracker dates the imposition of the Canada/Mexico tariffs to March 4, 2025, and Canada's Department of Finance states its counter-tariffs took effect March 4, 2025 on C$30 billion of U.S. goods (later adding steel, aluminum and auto tariffs) and that the C$30 billion tranche was removed September 1, 2025. The replacement Section 122 surcharge was proclaimed Feb 20, 2026 and took effect Feb 24, 2026 (Proclamation 11012).[5][6]

3. Sep 29, 2026ClarifiedSource

   Source housekeeping: the Yale Budget Lab "State of U.S. Tariffs: July 30, 2025" URL now redirects to the lab's latest report; it is replaced with an archived copy of the July 30, 2025 report, which states the $2,400 per-household short-run loss from all 2025 tariffs. Brookings is a think tank and is relabeled Tier 3.[2]

4. Sep 29, 2026ClarifiedSummary

   The entry said replacement Section 122 tariffs were "imposed within hours" of the Feb 20, 2026 ruling. Proclamation 11012 was signed Feb 20, 2026 and the 10% surcharge took effect Feb 24, 2026; it ran through July 24, 2026.[7]

   + Show previous and current text- Hide previous and current text

   Previously

   The tariffs took effect March 4, 2025. Canada responded the same day with 25% tariffs on C$30 billion of U.S. goods, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025. A March 6, 2025, USMCA-compliant goods exemption covered roughly 38% of Canadian imports until April 2. The Supreme Court's February 20, 2026, IEEPA ruling ultimately invalidated the legal basis, but replacement tariffs under Section 122 were imposed within hours.

   Now

   The tariffs took effect March 4, 2025. Canada responded the same day with 25% tariffs on C$30 billion of U.S. goods, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025. A March 6, 2025, USMCA-compliant goods exemption covered roughly 38% of Canadian imports until April 2. The Supreme Court's February 20, 2026, IEEPA ruling ultimately invalidated the legal basis, and a replacement 10% Section 122 import surcharge was proclaimed the same day, in effect from February 24 through July 24, 2026.

5. Sep 29, 2026CorrectedSummary

   The entry said a March 6, 2025 exemption for USMCA-compliant goods covered "roughly 38%" of Canadian imports "until April 2". No source supports the 38% figure, and the exemption did not end on April 2: Executive Orders 14231 and 14232 (signed March 6, 2025) exempted USMCA-qualifying goods of Canada and Mexico from 12:01 a.m. March 7, and the April 2 reciprocal-tariff order (EO 14257) states those goods "continue to be eligible" for USMCA terms. The text now says what the orders say.[8][9][10]

   + Show previous and current text- Hide previous and current text

   Previously

   The tariffs took effect March 4, 2025. Canada responded the same day with 25% tariffs on C$30 billion of U.S. goods, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025. A March 6, 2025, USMCA-compliant goods exemption covered roughly 38% of Canadian imports until April 2. The Supreme Court's February 20, 2026, IEEPA ruling ultimately invalidated the legal basis, and a replacement 10% Section 122 import surcharge was proclaimed the same day, in effect from February 24 through July 24, 2026.

   Now

   The tariffs took effect March 4, 2025. Canada responded the same day with 25% tariffs on C$30 billion of U.S. goods, later adding tariffs on U.S. steel, aluminum and autos; it removed the C$30 billion tranche on September 1, 2025. Executive orders signed March 6, 2025 exempted goods qualifying under USMCA from the duties from March 7 (and cut the rate on non-qualifying Canadian potash to 10%); the April 2, 2025 reciprocal-tariff order kept that exemption in place. The Supreme Court's February 20, 2026, IEEPA ruling ultimately invalidated the legal basis, and a replacement 10% Section 122 import surcharge was proclaimed the same day, in effect from February 24 through July 24, 2026.

6. Sep 29, 2026CorrectedUS impact

   The US-impact text named specific price effects (Canadian lumber, oil, potash, Mexican produce) and said automakers faced cost increases "estimated at billions of dollars", but none of the entry's sources gives those figures. It now states what the cited Brookings analysis projects: lower US growth, fewer jobs, lower wages and higher prices, with US motor-vehicle exports to Canada falling 25% (55% with retaliation).[1][6][8]

7. Sep 29, 2026ClarifiedSeverity rationale

   The severity rationale said the tariffs "raised prices on lumber, food, and autos"; no cited source measures those specific price effects. It now cites the Brookings projection instead. The severity rating is unchanged.[1]

   Previously

   25% tariffs on the two largest trade partners raised prices on lumber, food, and autos for US consumers and disrupted integrated supply chains nationwide.

   Now

   25% tariffs on Canada and Mexico were projected to lower US growth and jobs and raise prices (Brookings), and disrupted integrated North American supply chains.

8. Sep 29, 2026CorrectedDisplay copy

   The summary line said the tariffs 'raised prices.' The record gives Brookings' projection that prices would rise, not a measured increase; the text now says so.[1]

   Previously

   Tariffs on the two largest US trading partners raised prices and triggered retaliation.

   Now

   Tariffs on the two largest US trading partners were projected to raise prices (Brookings) and triggered retaliation.

9. Sep 29, 2026CorrectedCost estimate

   The 10- and 15-year federal figures re-counted costs already booked elsewhere (IEEPA tariff refunds and interest under the Supreme Court ruling entry; farm aid under China's agricultural retaliation), so they are now 0. The broader 10-year cost used an unsourced household figure; it now uses Brookings' published estimate of lost US output with retaliation ($75B).

   Previously

   $38B / $40B federal 10/15-yr; $120B broader

   Now

   $0 / $0 federal 10/15-yr; $75B broader

Sources [10]