Trade war escalates? Trump says Canada ‘ripping US off,’ eyes new tariffs on dairy, lumber

US President Donald Trump on Friday threatened to impose reciprocal tariffs on Canadian dairy and lumber products, escalating trade tensions just days after temporarily exempting certain imports under the North American trade pact.

"Canada has been ripping us off for years on tariffs for lumber and for dairy products," Trump said, adding that the US would impose identical tariffs unless Canada drops its restrictions. "We may do it as early as today, or we'll wait till Monday or Tuesday."

The warning comes after Trump’s administration imposed tariffs of up to 25% on imports from Canada and Mexico earlier this week, before granting a temporary reprieve on Thursday. However, Trump signaled that future increases were possible, telling Fox Business that "tariffs could go up as time goes by."

White House trade advisor Peter Navarro defended Trump’s approach, saying, "The uncertainty is created by the fact that people don’t take President Trump at his word."

Despite some exemptions under the United States-Mexico-Canada Agreement (USMCA), a White House official confirmed that 62% of Canadian imports and 50% of Mexican imports will still face new levies, mainly on energy resources.

Economists warn that broad tariffs could weigh on US growth and consumer sentiment, but Trump remains firm on his stance: "It's not fair. Never has been fair, and they've treated our farmers badly."

The potential tariff hike adds to ongoing trade disputes between the neighboring countries, with markets closely watching the next move from Washington.