Trump announces plan to remove Canadian firms from federal contracting schedules

Canadian tariffs on $20B of US goods took effect Tuesday

President Trump said Tuesday he would direct two federal agencies to remove Canadian firms from US government contracting schedules, retaliating for Canadian tariffs that took effect the same morning. The announcement, posted on Truth Social, targeted the General Services Administration’s “Multiple Award Schedules” — a federal procurement system that connects federal, state and local government agencies with suppliers of a wide variety of products.

“I am hereby directing the GSA, working with the USTR, to take all necessary steps to REMOVE Canadian-origin products from GSA’s Multiple Award Schedules unless Canada restores full and fair reciprocity for American Farmers and Companies,” Trump wrote in his post. He argued that the Canadian government blocks US firms from receiving similar contracts, though he did not specifically name the Canadian policy he was targeting.

The Canadian tariffs that prompted the response took effect Tuesday morning, ranging from 15% to 50% on about $20 billion of US goods — roughly 6% of US exports to its northern neighbor. The levies covered electronics, appliances and dairy products, among other items.

Those Canadian tariffs were themselves retaliation for US tariffs imposed in late August on about $20 billion of Canadian goods — approximately 5% of Canadian exports to the United States. The two rounds of levies have deepened a trade war that has run through much of Trump’s second term in office.

Trump said in his post that the GSA’s contracting schedule accounts for more than “50 BILLION DOLLARS a year.” The scale of the action’s impact on Canadian businesses was not immediately clear on Tuesday, and Trump did not provide details on when the prohibition would take effect. The White House had posted no official proclamations or actions to implement the directive as of Tuesday.

The contracting prohibition stops short of fresh tariff hikes, which could have invited further Canadian retaliation that would hit industries in border states like Michigan, New Hampshire and Maine — all of which have competitive midterm elections.

Trump has instead postponed his next round of tariff retaliation until Jan. 1, when he has threatened to increase tariffs on Canadian metals and vehicles. The delay gives the two nations time to come back to the negotiating table.

The escalation follows last month’s near-deal on tariffs. In August, the two nations looked close to a deal that would have averted the latest wave of tariffs, but talks broke down in the final hours before a US-imposed deadline, with each government blaming the other for walking away from the table.

Canada instituted a “Buy Canadian” policy last year to push government agencies to prioritize Canadian goods in their purchases, after Trump’s tariffs and threats of annexation.