TORONTO (AP) — U.S. President Donald Trump raised the tariffs on Canadian goods to 35% last week, but a key exemption for Canada and Mexico shields the vast majority of goods from the punishing duties.
Goods that comply with the 2020 United States-Mexico-Canada Agreement that Trump negotiated during his first term are excluded from the tariffs.
Here's a look at Trump's tariffs on the two countries and their exemptions:
Canada’s central bank says 100% of energy exports and 95% of other exports are compliant with the trade pact, known as USMCA. The Royal Bank estimated that almost 90% of Canadian exports appear to have accessed the U.S. market duty free in April.
Canadian Prime Minister Mark Carney said the commitment of the U.S. to the core of USMCA, reaffirmed again last week, means the U.S. average tariff rate on Canadian goods remains one of its lowest, and over 85% of Canada-U.S. trade continues to be tariff free.
“Canada is better off than any of the trading partners right now because the Americans appear to be relying as a default on USMCA,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. “That gives them the tough tariff headline but also allows them the access to the stuff they need from us. Because of that we’re in a relative better position.”
Canadian and Mexican companies can claim preferential treatment under the USMCA based on where the products are made.
“The headline news is 35% tariffs but it’s somewhat targeted,” said John Manley, Canada’s former industry minister, finance minister, foreign affairs minister and deputy prime minister.
Manley said Canada is doing okay despite the economic uncertainty.
“There is a lot of resilience I’d say. The Canadian economy has done relatively well, better than most of us expected, and remember that there is no tariffs on any of our energy exports," he said.
Trump said last week he would enter into a 90-day negotiating period with Mexico, also one of America's largest trading partners. The current 25% tariff rates are staying in place, down from the 30% he had threatened earlier.
But that 25% only applies to the fraction of Mexico's trade with the U.S. that isn't covered by the USMCA. Shortly after speaking with Trump on Thursday, President Claudia Sheinbaum said that within the “new commercial world order,” Mexico was still the best positioned nation because of the free trade agreement.
“What’s within (USMCA) has no tariff, with the exception of what we already know: autos, steel and aluminum; and what is outside the treaty has 25%,” Sheinbaum said.
But Economy Secretary Marcelo Ebrard pointed out that under the USMCA no tariffs were paid on more than 84% of Mexico's trade with the United States.
Most imports from Canada and Mexico are still protected by the USMCA, but the deal is up for review next year. U.S. Commerce Secretary Howard Lutnick said last month: “I think the president is absolutely going to renegotiate USMCA."
Preserving the free trade pact will be critical for Canada and Mexico.
“It would be an incredible disruption to lose it especially if you lost it to the levels of tariffs Trump is imposing, 30%, 25% or even 20%. You can absorb a single digit tariff level across the board but you can’t adjust that kind of increase,” Manley said.
More than 75% of Canada's exports go to the U.S. while more than 80% of Mexico's exports go there.
Manley said that depending on how the trade war plays out the risk to the USMCA is very high. “Uncertainty in business is the enemy of decision making," he said.
Carney said in a series of recent agreements with other countries that America is, in effect, charging for access to its economy.
Manley said the investment thesis for Canada is pretty straightforward as Canada is rich in natural resources, has a skilled labor force, is open to immigration and has unfettered access to the U.S. market, the largest economy in the world.
“If that latter point is no longer the case, we’ve still got all the others, but we’ve got to really redevelop the investment thesis for attracting investment to Canada,” Manley said.
Trump has some sector specific tariffs, known as 232 tariffs, that are having an impact. There is a 50% tariff on steel and aluminum imports and a 25% tariff on auto imports, though there is a carve-out for Canadian and Mexican made cars.
“Despite our advantages, certain major Canadian industries are being severely impacted by U.S. trade actions. These strategic sectors include autos, steel, aluminum, copper, pharmaceuticals, semiconductors, and of course, softwood lumber,” Carney said on Tuesday as he announced an aid package for the lumber industry as the U.S, ratches up duties.
“It is clear we cannot count or fully rely on what has been our most valued trading relationship for our prosperity,” he added.
Associated Press writer Fabiola Sánchez in Mexico City contributed to this report.
FILE - Shipping containers are loaded onto trucks at CSX Intermodal Terminals, a supplier of rail-based freight transportation, at CSX Queensgate Rail Yard, May 7, 2025, in Cincinnati. (AP Photo/Carolyn Kaster, File)
SEOUL, South Korea (AP) — A South Korean court sentenced former President Yoon Suk Yeol to five years in prison Friday in the first verdict from eight criminal trials over the martial law debacle that forced him out of office and other allegations.
Yoon was impeached, arrested and dismissed as president after his short-lived imposition of martial law in December 2024 triggered huge public protests calling for his ouster.
The most significant criminal charge against him alleges that his martial law enforcement amounted to a rebellion, and the independent counsel has requested the death sentence in the case that is to be decided in a ruling next month.
Yoon has maintained he didn’t intend to place the country under military rule for an extended period, saying his decree was only meant to inform the people about the danger of the liberal-controlled parliament obstructing his agenda. But investigators have viewed Yoon’s decree as an attempt to bolster and prolong his rule, charging him with rebellion, abuse of power and other criminal offenses.
In Friday’s case, the Seoul Central District Court sentenced Yoon for defying attempts to detain him, fabricating the martial law proclamation, and sidestepping a legally mandated full Cabinet meeting and thus depriving some Cabinet members who were not convened of their due rights to deliberate on his decree.
Judge Baek Dae-hyun said in the televised ruling that imposing “a grave punishment” was necessary because Yoon hasn’t shown remorse and has only repeated “hard-to-comprehend excuses.” The judge also restoring legal systems damaged by Yoon’s action was necessary.
Yoon’s defense team said they will appeal the ruling, which they believe was “politicized” and reflected “the unliberal arguments by the independent counsel.” Yoon’s defense team argued the ruling “oversimplified the boundary between the exercise of the president’s constitutional powers and criminal liability.”
Prison sentences in the multiple, smaller trials Yoon faces would matter if he is spared the death penalty or life imprisonment at the rebellion trial.
Park SungBae, a lawyer who specializes in criminal law, said there is little chance the court would decide Yoon should face the death penalty in the rebellion case. He said the court will likely issue a life sentence or a sentence of 30 years or more in prison.
South Korea has maintained a de facto moratorium on executions since 1997 and courts rarely hand down death sentences. Park said the court would take into account that Yoon’s decree didn’t cause casualties and didn’t last long, although Yoon hasn’t shown genuine remorse for his action.
South Korea has a history of pardoning former presidents who were jailed over diverse crimes in the name of promoting national unity. Those pardoned include strongman Chun Doo-hwan, who received the death penalty at a district court over his 1979 coup, the bloody 1980 crackdowns of pro-democracy protests that killed about 200 people, and other crimes.
Some observers say Yoon will likely retain a defiant attitude in the ongoing trials to maintain his support base in the belief that he cannot avoid a lengthy sentence but could be pardoned in the future.
On the night of Dec. 3, 2024, Yoon abruptly declared martial law in a televised speech, saying he would eliminate “anti-state forces” and protect “the constitutional democratic order.” Yoon sent troops and police officers to encircle the National Assembly, but many apparently didn’t aggressively cordon off the area, allowing enough lawmakers to get into an assembly hall to vote down Yoon’s decree.
No major violence occurred, but Yoon's stunt caused the biggest political crisis in South Korea and rattled its diplomacy and financial markets. For many, his decree, the first of its kind in more than four decades in South Korea, brought back harrowing memories of past dictatorships in the 1970s and 1980s, when military-backed leaders used martial law and emergency measures to deploy soldiers and tanks on the streets to suppress demonstrations.
After Yoon's ouster, his liberal rival Lee Jae Myung became president via a snap election last June. After taking office, Lee appointed three independent counsels to look into allegations involving Yoon, his wife and associates.
Yoon's other trials deal with charges like ordering drone flights over North Korea to deliberately inflame animosities to look for a pretext to declare martial law. Other charges accuse Yoon of manipulating the investigation into a marine’s drowning in 2023 and receiving free opinion surveys from an election broker in return for a political favor.
A supporter of former South Korean President Yoon Suk Yeol shouts slogans outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
Supporters of former South Korean President Yoon Suk Yeol hold signs and flags outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
A supporter of former South Korean President Yoon Suk Yeol waits for a bus carrying former South Korean President Yoon Suk Yeol outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
Supporters of former South Korean President Yoon Suk Yeol hold signs as police officers stand guard outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
Supporters of former South Korean President Yoon Suk Yeol hold signs and flags outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
Supporters of former South Korean President Yoon Suk Yeol hold signs outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
A picture of former South Korean President Yoon Suk Yeol is placed on a board as supporters gather outside Seoul Central District Court, in Seoul, South Korea, Friday, Jan. 16, 2026. (AP Photo/Lee Jin-man)
