The Supreme Court of the United States’s decision striking down many of President Donald Trump’s sweeping emergency tariffs is unlikely to meaningfully alter Canada’s economic outlook, according to trade analysts and Canadian officials, who note that the most economically consequential duties remain untouched.
In a 6–3 ruling issued February 20, the Court held that the International Emergency Economic Powers Act (IEEPA) does not authorize a president to impose tariffs. The decision invalidated a 35 percent duty Trump had applied to most Canadian exports to the United States under emergency authority, citing fentanyl flows and migrant crossings from Canada—claims that have been widely disputed.
Yet the practical reach of that 35 percent measure had already narrowed considerably. The administration exempted goods qualifying under the United States-Mexico-Canada Agreement—known in Canada as CUSMA—effectively shielding the majority of cross-border trade. The Royal Bank of Canada estimated that 89 percent of Canadian exports entered the U.S. tariff-free last month.
Prime Minister Mark Carney, an economist and former central banker, has placed the effective tariff rate on Canadian goods at approximately 5.5 percent, with some private-sector analyses suggesting the figure may have dipped as low as 3.1 percent, according to The New York Times.
More significantly for Canada, the Court’s ruling leaves intact sector-specific tariffs imposed under separate statutory authorities, particularly those justified on national security grounds. These include a 25 percent duty on cars, trucks, and buses; 50 percent on steel and aluminum; and additional levies on softwood lumber—an industry long mired in trade disputes dating to the 1980s.
Dominic LeBlanc, Canada’s minister responsible for U.S. trade relations, underscored that distinction in comments to CBC News on Friday. “What’s hurting the Canadian economy are the sectoral tariffs under a different American law,” he said. “This just reminds us again of the importance of diversifying our trading relationships.”
The ruling does little, however, to address ongoing friction for small Canadian online retailers. The administration previously eliminated the de minimis exemption for shipments valued at $800 or less, meaning tariffs may be assessed even on CUSMA-eligible goods when shipped via postal services. Numerous small exporters have since curtailed or ceased U.S. sales.
Against that backdrop, Carney’s government has accelerated efforts to diversify trade relationships, particularly with China, a move that many believe will hurt Canada in the longrun.
The prime minister is also slated to travel to India next week as part of a broader strategy aimed at expanding commercial ties beyond the United States, which remains Canada’s dominant export market.
