Trump Threatens New Canada Tariffs Over Wildfire Smoke

President Trump is opening a new front in the Canada trade fight, this time tying tariffs to wildfire smoke drifting south. Trump threatened on Friday to impose additional tariffs on Canada, accusing the country’s government of “willful negligence” in its handling of massive wildfires that have wafted heavy smoke and worsened air quality in parts of the Midwest and East Coast.

The threat lands on top of an already tense trade backdrop with Ottawa and adds a fresh headline risk for cross-border names.

What Trump actually said

“This is Willful Negligence, and becoming a yearly occurrence, costing the United States Billions of Dollars, which cost of this pollution must of necessity be added to the TARIFFS Canada is currently paying,” the president wrote on Truth Social.

Trump said he would call Prime Minister Mark Carney on Friday to discuss the issue, and made no concrete proposal for what tariffs, if any, he could apply. The U.S. Supreme Court, in a ruling earlier this year, constrained Trump from summarily imposing tariffs on an emergency basis.

The trade backdrop

Canada has long been a thorn in Trump’s side, and Trump has saved some of his highest tariffs for America’s northern neighbor. He has accused the country of unfair lumber trade and stealing US auto jobs.

Despite that animosity, Canada has been largely insulated by the USMCA trade pact that Trump himself negotiated in his first term, which exempted thousands of goods that otherwise would have been subject to some of the highest tariffs the administration charged. The Trump administration, however, declined to renew USMCA in its current form earlier this month.

Translation for traders: the USMCA safety net is thinning just as new tariff rhetoric ramps up.

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Scale of the smoke event

More than 100 million people in 18 states and the District of Columbia are under air quality alerts, with “very unhealthy” and “hazardous” air quality stretching from northeast Minnesota to southeast Virginia.

Smoke from nearly 850 active wildfires across Canada, including more than 180 in Ontario, has drifted into the United States, prompting air quality alerts in more than 20 states from the Upper Midwest to the Northeast, according to NASA.

Canada’s response

Carney brushed off the criticism during a news conference in London, Ont. on Thursday, while also taking a subtle jab at the Trump administration’s environmental and energy policies. “Fighting climate change is the responsibility of all countries, including the United States,” Carney told reporters in French, according to The Canadian Press.

Sen. Bernie Moreno (R-Ohio) said on X that he planned to introduce legislation that would impose sanctions on Canada and Canadian officials “for this atrocity.”

Options market and stocks to watch

Any real tariff move on Canada would ripple through lumber, autos, energy, and rails. A few names to keep on the radar:

• WFG (West Fraser Timber) and WY (Weyerhaeuser): watch for reaction on any signal that softwood lumber duties could climb further.
• F (Ford) and GM: watch for cross-border auto supply chain headline risk given the USMCA overhang.
• CP (Canadian Pacific Kansas City) and CNI (Canadian National): watch for tariff-sensitive volume assumptions on cross-border freight.
• ENB (Enbridge): watch for any spillover into Canadian energy exporters if the tariff scope broadens.

For more on tariff moves, USMCA developments, and cross-border trade risk, see other news on Unusual Whales.

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