Canada's finance minister says US is unlikely to lift tariffs

February 26, 2026

Following Donald Trump's State of the Union address where he expressed intentions to replace income taxes with tariff revenue, Canadian Finance Minister François-Philippe Champagne acknowledged that Canada may need to accept baseline tariffs as the cost of accessing the American market. This shift in tone comes after the US Supreme Court struck down Trump's previous tariff policy in a 6-3 decision, prompting the president to implement new 10% global tariffs under Section 122 of the 1974 Trade Act. US Trade Chief Jamieson Greer has indicated Canada must accept higher tariffs while opening its own markets, particularly in sectors like dairy.

Who is affected

Canada (specifically Canadian exporters and the Canadian government)
The United States government and American administration
All countries exporting to the United States
Canadian Prime Minister Mark Carney
Canadian Finance Minister François-Philippe Champagne
US Trade Chief Jamieson Greer
US President Donald Trump
Canadian industries including steel, aluminum, softwood lumber, dairy, metals, and automotive sectors

What action is being taken

Trump is imposing a 10% worldwide tariff under Section 122 of the 1974 Trade Act (effective Tuesday)
Canada is paying tariffs, though at the lowest rate according to Champagne
The US is enforcing steeper tariffs on Canadian steel, aluminum, and softwood lumber
Greer is engaging in conversations with Canada about opening markets in exchange for accepting higher tariffs
Prime Minister Carney is working to double Canada's non-US exports by the next decade

Why it matters

This represents a fundamental shift in US trade policy that could reshape the global trading system, as Trump seeks to make tariffs America's primary revenue source instead of income taxes. For Canada, this is particularly significant because the US accounts for 75% of its exports, making the country highly vulnerable to American tariff policies. The acceptance by Canadian officials that baseline tariffs may be unavoidable signals a major change in the traditionally close economic relationship between the two neighbors and could force Canada to fundamentally restructure its export economy toward diversification.

What's next

Congress must step in after 150 days regarding the Section 122 tariffs
Canada aims to double its non-US exports by the next decade, particularly in metals and cars
Potential negotiations between the US and Canada regarding market access in sectors like dairy in exchange for accepting higher tariff levels

Read full article from source: BBC