U.S. slaps duties on fresh Canadian mushrooms over subsidy claims

By

The Canadian Press

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Published: May 19, 2026

In this Sept. 16, 2011, file photo, a mushroom grows at Winslow Park in Freeport, Maine. Maine. (AP Photo/Robert F. Bukaty, File)

WASHINGTON — The United States has put countervailing duties on fresh mushrooms grown in Canada following a U.S. Department of Commerce investigation which the Canadian industry has called “deeply flawed.”

The change, posted in the federal register on Monday, will slap most fresh mushrooms with tariffs of 2.84 per cent.

Two companies received separate duties: Champ’s Fresh Farms Inc. was hit with a tariff rate of 1.62 per cent and Farmers’ Fresh Mushrooms Inc. was hit with a tariff rate of 4.97 per cent.

Separate anti-dumping duties are expected to be added later this month.

The preliminary Commerce investigation said Canadian mushroom producers received unfair government subsidies.

Mushrooms Canada CEO Ryan Koeslag said last week that Canadian growers haven’t engaged in unfair trade practices and producers are not receiving special treatment.

In a news release, Koeslag said the Commerce department’s justification is linked to mainstream agricultural tax treatment, including provincial sales tax exemptions available to farmers generally.

“Treating broad-based agricultural tax measures as unfair subsidies is contrary to common sense and unfairly penalizes Canadian mushroom growers for participating in programs available across the agricultural sector in any number of countries,” Koeslag said.

Mushrooms Canada said under U.S. trade law, a subsidy must meet specific legal requirements before it can be countervailed and the group does not believe those requirements have been met.

“It is difficult to reconcile Commerce’s preliminary approach with the fact that comparable agricultural tax treatment exists in the United States,” Koeslag said.

The Commerce department launched the investigation in January after receiving a complaint from the U.S.-based Fresh Mushrooms Fair Trade Coalition. The group said tax exemptions meant Canadian mushrooms were unfairly subsidized and claimed Canadian mushroom imports had grown in recent years while domestic mushroom consumption remained relatively flat.

Giorgio Mushroom Co., which is part of the U.S. coalition, said in a news release Monday that the duties are an important step.

“For years, American mushroom growers have faced enormous pressure from unfairly subsidized mushroom imports that distorted competition and threatened domestic production,” said Giorgio Mushroom CEO Mark Currie.

William Pellerin, a partner in international trade at McMillan LLP, said the Commerce investigation would not look at the specific agriculture subsidies that U.S. producers might be receiving — even if it is similar to what Canadian companies get.

Pellerin, who is not involved in the mushroom case, noted the preliminary subsidy amount is extremely low but the Commerce investigation into Canadian mushrooms is still ongoing.

When Canadians think of countervailing and anti-dumping duties they often look to lumber tariffs. Those tariffs, which predated the Trump administration, have also increased in the last year.

Pellerin said Commerce investigations like the one around fresh mushrooms generally are not U.S. administration-led tariffs.

The Canadian mushroom industry would be able to push back on the countervailing duties under the appeal mechanism through the Canada-U.S.-Mexico Agreement on trade, better known as CUSMA.

Countervailing and anti-dumping duties are separate from U.S. President Donald Trump’s massive tariff agenda. Trump has used different tools to hit countries around the world with tariffs and Canada is also being hammered by his sector-specific duties on things like steel, aluminum, automobiles and cabinetry.

But Trump’s push to realign global trade through tariffs may see more agricultural industries in the United States follow the mushroom coalitions’ lead and push for Commerce investigations, Pellerin said.

“I think that’s going to be not just the United States,” Pellerin said. “We are seeing them in Canada vastly increase also where Canadian associations are bringing cases against agricultural products from around the world.”

This report by The Canadian Press was first published May 18, 2026.

Kelly Geraldine Malone, The Canadian Press

Canadian mushroom growers warn new U.S. tariffs could ‘flood’ domestic market

By

Jeremie Charron

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Updated: May 17, 2026 

With a July 1 deadline to review the Canada-U.S.-Mexico Agreement (CUSMA) around the corner, new U.S. tariffs are set to take effect next week, this time on Canadian mushrooms.

“This is about 4,300 square feet of growing space,” said Mike Medeiros, owner of Carleton Mushroom Farms in Osgoode, Ont., as he toured his facility Saturday.

It is a massive and modern, but family-run, mushroom farm that grows, harvests and packages mushrooms in house.

An impressive “300,000 pounds per week” is how much Medeiros’s farm produces, making it one of the bigger players in the Canadian mushroom market.

But new U.S. tariffs set to be imposed on Canadian mushrooms Monday will take a toll on his business, even though his mushrooms stay in Canada.

“Forty per cent of the mushrooms in Canada are shipped to the U.S., and so what’s going to happen is as tariffs increase going to the U.S., there might be more mushrooms in Canada and then it would flood our market,” said Medeiros.

Canadian mushroom farmers say new tariffs could lead to layoffs and reduced output. (Credit: Carleton Mushroom Farms)

A fact sheet released this week by the U.S. Department of Commerce showed Canadian mushrooms will face new tariffs of up to five per cent, citing unfair government supports.

“They’re the same in the U.S. as they are in Canada,” said Ryan Koeslag, the executive vice-president of the Canadian Mushroom Growers’ Association, in an interview with CTV News.

“We’ve always been operating under the rules and regulations of fair trade between Canada and the U.S., and so the reason they identified this, I think, is they haven’t been able to find anything else.”

Known as countervailing duties, the same measures used to tariff Canadian softwood lumber, the tariffs are imposed on imports the U.S. deems are being unfairly subsidized.

But Canadian mushroom farms are just the latest example of a clear signal being sent by the Trump administration, targeting Canada’s agricultural sector.

“Ultimately the U.S. farmer is very powerful politically,” said William Pellerin, an international trade lawyer with McMillan LLP in Ottawa.

“There’s a broad trend to look at agricultural products coming into the United States and apply tariffs where the U.S. deems it’s important to do so,” he said.

Medeiros says the move could force him to start producing less.

“Once we start cutting back production, we would definitely have to look at cutting back staff to keep payroll in check,” added Medeiros.

Canadian mushroom farmers export almost exclusively to the U.S., and while industry says it will fight the new tariffs – that will still take time.

Jeremie Charron

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Journalist, CTV National News

U.S.-Canada Trade Relations: Current Tensions And Future Outlook – Analysis

President Donald Trump meets with Canadian Prime Minister Mark Carney, Tuesday, May 6, 2025, in the Oval Office. (Official White House Photo by Daniel Torok)

March 31, 2026
The Congressional Research Service (CRS) 
By Kyla H. Kitamura

The United States and Canada have one of the largest bilateral trade relationships in the world, including highly integrated energy and automotive markets. Since 1989, U.S.-Canada trade has been governed by the U.S.-Canada Free Trade Agreement, then by the 1994 North American Free Trade Agreement (NAFTA), and now by the 2020 United States-Mexico-Canada Agreement (USMCA).

Since 2025, U.S.-Canada trade tensions have increased following the imposition of U.S. tariffs on key Canadian exports. The two countries, along with Mexico, also are scheduled to engage in a review of USMCA in July 2026, which could lead to significant changes in the agreement. Congress implemented USMCA through legislation (P.L. 116-113) and may need to approve revisions. Congress may consider whether to exercise its prerogatives related to the U.S.-Canada economic relationship, including oversight of U.S. tariffs and the USMCA joint review process.

 
U.S.-Canada Trade Overview

According to U.S. Bureau of Economic Analysis (BEA) data, Canada was the second-largest U.S. goods and services trade partner in 2025. Services trade (e.g., financial services, tourism) is particularly robust, with the United States generally running a services trade surplus with Canada.

According to Statistics Canada data for 2025, Canada exported 73% of its goods to, and imported 46% of its goods from, the United States. Per BEA and Statistics Canada, as of 2024 (latest data available), the United States was the largest source of foreign direct investment (FDI) by stock in Canada ($459.6 billion), and Canada was the second-largest source of U.S. FDI ($732.9 billion). Canada is the largest supplier of U.S. energy imports—including crude oil, natural gas, and electricity. Canada’s share of U.S. crude oil imports by quantity increased from 41% (1.1 billion barrels) in 2015 to 64% (1.4 billion barrels) in 2025.

U.S. Tariffs on Canadian Imports

In 2025, President Trump imposed tariffs on Canadian goods under the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. §§1701 et seq.) and Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862). In February 2026, the U.S. Supreme Court held that IEEPA does not give the President authority to impose tariffs. Subsequently, the Administration ended the IEEPA tariff actions and imposed a 10%, 150-day “temporary import surcharge” on most U.S. imports, including from Canada, under Section 122 of the Trade Act of 1974.

Under USMCA, Canadian goods that are certified as having met product-specific rules can enter the United States largely duty-free; such goods also are largely, but not wholly, exempt from U.S. tariff actions (see Table 1). In 2025, the United States imposed duties on about 13% of U.S. imports from Canada (worth about $50.5 billion total). Most Canadian goods entered duty-free, likely because goods were certified as USMCA-compliant.

Table 1. U.S. Presidential Tariffs on Canada

Authority Canadian Goods Affected (Tariff Rates) Exemption for USMCA-compliant goods
Sec. 122 Most goods (10%) Yes
Sec. 232 Steel, aluminum, and copper (50%) No
Sec. 232 Passenger vehicles and auto parts (25%); trucks (25%), buses (10%), and related parts (25%) Yes (full exemption for parts, partial for vehicles)
Sec. 232 Timber and lumber (10%), certain wooden products (25%), certain semiconductors (25%) No
Source: CRS, compiled from U.S. government documents, as of March 30, 2026.

In March 2025, President Trump imposed 25% tariffs on most Canadian imports (10% on energy and potash) under IEEPA, citing a national emergency at the border with Canada related to illicit fentanyl. President Trump later increased tariffs on Canadian goods to 35%. USMCA-compliant goods were exempt. These tariffs were ended following the February 2026 Supreme Court ruling.

USMCA-compliant goods are exempt from the Section 122 10% global tariffs, as are energy products and fertilizers. President Trump stated, invoking IEEPA, that he would continue to suspend duty-free treatment for all goods shipments valued at less than $800, including from Canada (19 U.S.C. §1321(a)(2)(C), referred to as de minimis). This action is facing legal challenges.


In March 2026, the Office of the U.S. Trade Representative (USTR) launched an investigation into 60 partners, including Canada, regarding their “failure to impose and effectively enforce a prohibition on the importation of goods produced with forced labor” under Section 301 of the Trade Act of 1974 (19 U.S.C. §§2411–2420); depending on the outcome, this could lead to tariffs on Canadian goods.

Sectoral Tariffs. In 2025, President Trump eliminated nearly all exemptions, including for Canada, from Section 232 steel and aluminum tariffs (currently 50%). President Trump has also imposed tariffs on key Canadian sectors, including certain copper products, certain lumber and timber products, and vehicles and auto parts.

Canadian Retaliation. Canada initially responded to U.S. IEEPA tariffs with 25% tariffs on C$30 billion (about $21.8 billion) worth of U.S. imports. Separately, Canadian provinces and territories announced retaliatory measures related to the sale of U.S. alcohol and government procurement. In response to U.S. sectoral tariffs, the Canadian government imposed 25% tariffs on C$29.8 billion (about $21.7 billion) worth of U.S. imports and on non-USMCA-compliant vehicles from the United States, and the non-Canadian, non-Mexican content of vehicles traded under USMCA. Canada has challenged the Section 232 tariffs at the World Trade Organization (WTO).

In April 2025, Canada exempted certain sectors and companies from its retaliatory tariffs on U.S. goods. From September 2025, Canada terminated the retaliatory tariffs it imposed in response to IEEPA and some retaliatory tariffs it imposed in response to U.S. steel and aluminum tariffs. Canadian tariffs remain on U.S. vehicles and C$15.6 billion ($11.3 billion) worth of U.S. steel and aluminum imports. Canadian Prime Minister Mark Carney has announced policies to support the Canadian steel and lumber industries, including prioritizing the use of Canadian materials in government contracts (“Buy Canadian”).

Other Selected Trade Issues

Digital Services Tax Act. In June 2024, the Canadian government enacted a 3% digital services tax (DST) on certain revenue of large digital services providers, retroactive to January 2022. Canada was to begin collecting the DST in June 2025, but the Canadian government announced it would not collect the tax and would take steps to rescind the legislation after President Trump stated that he would terminate trade talks with Canada over the DST. The Canadian government included a repeal of the DST in budget legislation enacted in March 2026.

Online Streaming Act. The Canadian Radio-Television and Telecommunications Commission (CRTC) requires television and radio companies operating in Canada to fund and broadcast a certain percentage of Canadian content. Canada’s Online Streaming Act enables CRTC to regulate entities that broadcast through social media or online streaming services (e.g., Meta, Netflix, YouTube). In June 2024, CRTC announced that it would require online streaming services with annual revenues of C$25 million ($18 million) or more to contribute toward or directly fund Canadian content. The first substantive payment was due in August 2025. Some Members of Congress have proposed legislation directing USTR to investigate whether the act is unfair to U.S. firms (H.R. 8025). Congress may examine the act’s potential impacts on U.S. companies and whether it violates Canada’s commitments under USMCA. USMCA permits Canada to adopt or maintain measures related to a “cultural industry” that would be otherwise inconsistent under the agreement. The other Parties are allowed to take “a measure of equivalent commercial effect” in response.


Automotive. USMCA tightened content requirements for duty-free automotive trade in North America. Mexico and Canada challenged the U.S. interpretation of the requirement—the United States argued for a stricter approach to calculating North American content, while Mexico and Canada advanced a more flexible interpretation of the content requirements. In 2022, a USMCA panel decided in favor of Mexico and Canada but did not determine how the issue was to be resolved. The parties have not reached a resolution.

Critical Minerals Canada is a top U.S. source of key critical minerals. The Defense Production Act (50 U.S.C. §§4501 et seq.) grants Canadian firms eligibility to receive U.S. federal funding, including for critical minerals projects in Canada. At President Trump’s direction USTR sought public comments on a potential plurilateral agreement on critical minerals trade. Canadian officials have expressed a preference for discussing critical minerals as part of overall USMCA talks rather than in a separate sectoral agreement.

Dairy and Supply Management. Canada supports its dairy, poultry, and egg sectors by limiting production, setting prices, and restricting imports (“supply management”). Under USMCA, Canada committed to provide greater access for U.S. dairy exports through 14 U.S.-specific tariff-rate quotas (TRQs), which allow specified quantities to be imported into Canada at preferential duty rates. USTR has challenged Canada’s dairy TRQs twice under USMCA with mixed results. President Trump has criticized Canada’s dairy market policies and suggested imposing tariffs on Canadian dairy products. In June 2025, Canada enacted legislation preventing the government from increasing TRQs or reducing over-quota tariffs for dairy, poultry, or eggs in future negotiations.

Softwood Lumber. The United States and Canada have had a decades-long dispute over trade in softwood lumber—primarily used in residential construction. The last agreement governing U.S.-Canada softwood lumber trade expired in October 2015. Since the agreement’s expiration, the United States has imposed antidumping (AD) and countervailing duties (CVD) on imports of Canadian softwood lumber. Canada has challenged the duties through NAFTA, USMCA, the WTO, and the U.S. Court of International Trade. AD/CVDs apply on top of Section 232 tariffs on timber and lumber imports.

Issues for Congress

Congress has a constitutional role in U.S. trade policy and may consider whether to bolster or curb presidential authorities related to tariffs and trade talks. For example, the Senate-passed S.J.Res. 37 and S.J.Res. 77 and the House- passed H.J.Res. 72 would terminate the national emergency underlying the previously-imposed IEEPA tariffs on Canada. Members seeking greater oversight may direct the Administration and/or agencies such as the U.S. International Trade Commission to assess the economic impacts of U.S. tariffs and Canadian retaliatory measures. Members of Congress could consider whether and how to engage with the USMCA joint review, including seeking changes or preserving existing provisions. Congress also could codify specific U.S. tariff rates on Canada. Such action could prompt consideration about consistency with U.S. trade obligations under USMCA.

About the author: Kyla H. Kitamura, Analyst in International Trade and Finance

Source: This article was published by the Congressional Research Service (CRS)

CRS

The Congressional Research Service (CRS) works exclusively for the United States Congress, providing policy and legal analysis to committees and Members of both the House and Senate, regardless of party affiliation. As a legislative branch agency within the Library of Congress, CRS has been a valued and respected resource on Capitol Hill for nearly a century.

 CANADA

Tariff-hit industries struggling as trade war drags into second year

By

The Canadian Press

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Published: March 24, 2026 

Algoma Steel Inc., the second largest steel producer in Canada, along the St. Marys River in Sault Ste. Marie, Ont., Thursday, July 24, 2025. THE CANADIAN PRESS/Nick Iwanyshyn

TORONTO — From rolled steel to kitchen cabinets, Canadian businesses hit by targeted U.S. tariffs are struggling to respond as the trade war drags into its second year.

While most exports continue to flow tariff-free under the Canada-U.S.-Mexico trade agreement, industries like metal production, lumber and automobiles continue to face steep duties more than a year after U.S. President Donald Trump upended the global status quo. Companies have cut staff, pulled back on production and pushed for government action as the heavy duties continue to shake the crucial and long-standing trade relationship with the U.S.

Take Daniel Drapeau, CEO of Quebec-based custom cabinet maker Miralis. His company has invested $43 million since 2022 as it built two plants, with plenty of automation to boost productivity, but like so many others in the industry, it’s now operating well below capacity.

The problem, like with other sectors hit by the Section 232 tariffs, is not only the loss of the U.S. market, but that all the other countries blocked from the world’s largest economy are also looking for buyers, leading many to try and sell more into Canada.

“We were ready to grow after all those crises,” Drapeau said in an interview, citing the COVID-19 pandemic, interest rates and inflation.

“But now we’re being hit by the fact that there is a surge. There is too much product coming from other countries.”

To respond to the twin threats of headwinds in exports and increased imports, cabinet makers in Canada have teamed up with wood flooring and furniture makers to form the Canada Wood Products Alliance. The group is pushing the government to introduce barriers to foreign competitors sending goods into the country.

Drapeau says the action is needed because most of the members of the alliance have had to significantly cut back on operations.

“The manufacturers in Canada are running at maybe 50 per cent of their capacity, which is the strict minimum to stay alive.”

The federal government announced on March 13 that it is reviewing a request from the alliance for safeguard measures. The review comes after the sector was hit by 25 per cent tariffs in October, and was set for a further rise to 50 per cent in January until the Trump administration backed down at the last minute.

Other sectors like steel, which have faced tariffs since March last year, have already seen the government work to crack down on imports, especially those originating in China, in several rounds of increasingly strict limits.

The latest restrictions only went into place on Dec. 26 so it’s still too early to tell how well they’re working, said Catherine Cobden, CEO of the Canadian Steel Producers Association.

But she said there’s no doubt the help is needed.

“They, frankly, have had a significant impact on the Canadian industry. Thousands of jobs lost, loss of production and a significant drop in our shipments to the United States. A very, very challenging year.”

In December, Canadian steel exports to the U.S. were down 50 per cent from a year earlier, she said.

“Every month we see further drops, and that’s a direct reflection of just the loss of that market access due to the tariffs.”

Some of the effects are being felt this week in Sault Ste. Marie, Ont., where Algoma Steel Inc. is starting to lay off upwards of 1,000 workers.

The job cuts are part of a long-planned shift to more efficient equipment, but the company accelerated the plan because of tariffs.

Some companies have managed to avoid or reduce layoffs through the use of government initiatives like work-share programs, which allow companies to keep workers on reduced hours and have employment insurance help make up the pay difference.

Drapeau said they’re being widely used in the wood products industries, while Cobden said she thinks the steel sector is the largest user of the program, in part to avoid longer-term effects.

“If we lose our workers, will we ever get them back? And so people are really working hard to try to keep workers in place.”

The work share programs, along with the time it takes to unwind contracts and supply chains, help explain why the effects aren’t even more pronounced on these sectors already, though some cracks are starting to show.

The auto parts sector is one of the hardest hit. Statistics Canada reported there were 64,828 autoworkers employed on the parts side as of December, down 9.5 per cent from a year earlier.

The drop is despite manufacturing employment as a whole growing slightly last year, showing how specific sectors are bearing the brunt, said Claire Fan, senior economist at RBC.

“Because of the way that these tariffs are imposed ... five to six key manufacturing subsectors are really, really hurting versus the rest of the economy.”

And some have been hurting for a while. The softwood lumber industry was hit by harsh duties back in 2017, which Trump has since added to, resulting in production down over 25 per cent since the first round, she noted.

The result is 22 mills closed since 2022 and another 50 with reduced operations, the federal government said as it announced further industry supports last November.

While production and job cuts are some of the most obvious impacts, Fan said that the uncertainty around trade will also mean less investment, and less help for Canada’s wider productivity problems.

“There’s not going to be a huge amount of new investment flowing into these sectors, just because the outlook a decade ahead is perhaps not that optimistic.”

That uncertainty is also leading to fewer orders in the near-term.

While kitchen cabinets didn’t get hit by doubled tariffs, the potential alone creates its own problem.

“We’re still under this threat of adding 50 per cent,” said Drapeau.

“I believe that the Americans are seeing this as a risk, to order from Canada, because of this possible increase.”

He said that while there have already been impacts, worse could be yet to come.

“Hundreds of jobs have been lost, and thousands are in work-share, and there will be more unfortunately in the next months or years if we can’t find solutions.”

This report by The Canadian Press was first published March 24, 2026.

Ian Bickis, The Canadian Press