Trump’s tariff hike still hits goods that are not covered by the USMCA. The Bank of Canada forecast this week that up to 95 percent of Canadian exports could qualify for exemptions under that agreement. Meanwhile, the share of Canadian companies claiming tariff exemptions has soared.

Trump has justified tariffs on goods from Canada, the top U.S. export market, by accusing it of failing to stop the cross-border flow of fentanyl, even though U.S. government data shows Canada accounts for only 1% of the fentanyl that enters the United States.

President Trump announced Thursday that the U.S. would raise tariffs on certain Canadian goods from 25 percent to 35 percent beginning Friday. Goods that are covered under the 2020 United States-Mexico-Canada Agreement will be exempt from the tariff rate,