Four things to know about Trump’s big tariff announcement, and what comes next

The Trump administration is charging baseline sweeping tariffs of 10 percent, but CUSMA-compliant goods are tariff-free

Published Apr 02, 2025  •  3 minute read

U.S. President Donald Trump pumps his fist after signing an executive order and announcing reciprocal tariffs during an event entitled "Make America Wealthy Again" at the White House on April 2, 2025. Photo by SAUL LOEB/AFP via Getty Images

United States President Donald Trump on Thursday officially signed reciprocal global tariffs on the country’s trading partners after a press conference at his Make America Wealthy event in the White House Rose Garden.

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Dubbing his latest executive order “a declaration of economic independence,” he said these tariffs are a retaliation for tariff and non-tariff trade barriers imposed by other countries, both friends and foes.

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Here’s how Canada and other countries will be impacted.

What did Trump announce?

The Trump administration is enacting minimum tariffs of 10 per cent on all trading partners, scheduled to take effect on Saturday, but higher, individualized tariff rates will be implemented for certain countries on April 9.

“These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved or mitigated,” a White House fact sheet said.

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During his press conference, Trump held up a chart of countries and their customized reciprocal tariff rates, such as China and the European Union, which face rates of 34 per cent and 20 per cent, respectively.

Canada and Mexico did not appear on the list.

The U.S. government also said it will impose 25 per cent tariffs on automobile imports on April 3, while duties on auto parts will follow on May 3.

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What tariff level did Trump impose on Canada?

The White House fact sheet said the 10 per cent baseline levy will not be added to the tariffs Canada is already facing.

Goods compliant under the Canada-United-States-Mexico Agreement (CUSMA) will continue to be free of tariffs, but non-compliant goods face tariffs of 25 per cent, with a 10 per cent carveout for energy and potash. The 25 per cent tariffs on steel and aluminum are also still in place.

However, if the existing 25 per cent tariffs on Canadian goods (which Trump imposed earlier this year due to what he claimed were concerns about illegal immigration and fentanyl crossing the border) are later axed, non-CUSMA-compliant goods would be only subject to a 12 per cent reciprocal tariff.

“It looks like it’s not a mortal blow, nor is it an existential threat to the country,” Fen Osler Hampson, a professor of international affairs at Carleton University and co-chair of the Expert Group on Canada-U.S. Relations, said. “It means that CUSMA is not dead.”

What’s next for Canada?

Liberal Leader Mark Carney told reporters that reciprocal tariffs will “fundamentally change the international trading system,” but didn’t offer further details on Wednesday.

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Sources say he’s not expected to release a response to reciprocal tariffs until Thursday.

The White House has said it could increase or expand the scope of its reciprocal tariffs if trading partners retaliate or if U.S. manufacturing capacity and output worsen.

It also said reciprocal tariffs could be reduced or limited on countries where “non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters.”

But some economists say Canada needs to stand its ground.

“I remain of the view that when confronted by such zero-sum forces, the pacifist’s dictum that one must roll over and resist retaliation is wrongheaded,” Derek Holt, vice-president and head of capital markets economics at the Bank of Nova Scotia, said in a note on Wednesday.

“The only way to dissuade the U.S. administration from such policies and reassert one’s right to self-determination in unwavering fashion is to shove back just as hard.”

What are the global implications?

Gold, which typically increases amid periods of economic uncertainty, surged to a record high ahead of Trump’s address. After the press conference, S&P 500, Nasdaq 100 and Dow Jones futures plunged.

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Anonymous sources told Bloomberg prior to the press conference that China has begun to pause registration and approvals for local companies trying to invest in the U.S., a possible move to gain leverage in trade negotiations.

“The $64,000 question is: How are (these countries) going to retaliate? If we get into a major tariff war, then we are going to very quickly slide into a global recession,” Hampson said. “It’s not just the tariffs, but the knock-on effects on investment because nobody is going to be investing in anything in this kind of hostile trade environment.”

Still, he said he believes other countries will start trying to negotiate their reciprocal tariffs down.

“(The Trump administration is) going to be overwhelmed by a long line of countries that are going to want to negotiate exemptions or reductions on tariffs, and that’s going to overload the circuits.”

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