Mirror Review
25 March 2025
Remember when crossing the US–Canada border felt like visiting a friendly neighbor? Well, things have taken a sharp turn, and a full-blown Trump trade war with Canada is now brewing. It might sound dramatic, but with new tariffs flying and strong words being exchanged, it’s time to understand what’s happening between the US and Canada and how it could affect us.
The Genesis Of The Trade War With Canada
The current trade troubles aren’t exactly new. Back in 2018, under President Trump’s first term, tariffs were slapped on Canadian steel and aluminum. Canada responded in kind, and things have been a bit tense ever since. But recently, the heat has been turned way up.
Renewed Aggression and Objectives Of Trump Trade War With Canada
The U.S. has now imposed a hefty 25% tariff on most goods coming from Canada and Mexico, with a slightly lower 10% on Canadian energy. The White House says this is due to national security concerns, pointing to issues like drug trafficking and migration.
President Trump has also made some pretty strong statements against Canada in his White House speech on 21st March 2025. His administration has repeatedly claimed unfair trade practices by Canada, citing allegations such as a 270% tariff on dairy products and a $200 billion subsidy.
However, these claims have been disputed and presented as misleading. For instance,
- The assertion of over 270% tariffs on US dairy products only applies if US exports exceed certain duty-free limits, which US dairy manufacturers state they have never approached.
- These tariff levels were established under the USMCA, an agreement signed by President Trump himself.
- Similarly, claims of a $200 billion annual subsidy to Canada have been identified as a significant exaggeration of the actual US trade deficit with Canada, which was closer to $35.7 billion in goods and services in 2024.
Trump even floated the idea of Canada becoming the 51st state! These comments haven’t exactly fostered friendly feelings up north.
Canada’s Response: Public Sentiment and Consumer Boycotts
Following the initial imposition of US tariffs on steel and aluminum, Canada announced immediate reciprocal tariffs on US goods. These tariffs, effective March 13, 2025, targeted $29.8 billion worth of imports from the United States, including steel products valued at $12.6 billion, aluminum products at $3 billion, and an additional $14.2 billion worth of various goods such as computers and sports equipment.
Finance Minister Dominic LeBlanc stated that Canada would impose “dollar-for-dollar” tariffs, targeting a wide range of U.S. products. The government has promised to hit back hard with its own tariffs on over $100 billion worth of American goods. Moreover, Prime Minister Trudeau didn’t hold back either, suggesting the U.S. is deliberately trying to weaken Canada.
It’s not just the government reacting. Many Canadians are choosing to boycott American products, with a “Buy Canadian” movement gaining steam. Some stores have even removed American-made alcohol from their shelves. There’s a real sense of national pride and a desire to support Canadian businesses during this tough time.
The Snap Election and Trade Policy
The snap federal election called in Canada for April 28th has placed the issue of trade relations with the United States squarely at the forefront of political discourse. Canadians are looking to see which leader and party they trust most to handle President Trump and navigate this trade war.
All the big political groups in Canada have shared their ideas on how to handle the US trade situation, with all these extra taxes and tension. The Canadian Labour Congress, for example, put out a plan called ‘Workers Together,’ basically telling the parties to look after working families and deal with the trade war. The Canadian Federation of Independent Business (CFIB) also came up with ideas to help small businesses.
Right now, polls show it’s a pretty close race between the Liberals, with Mark Carney leading, and the Conservatives, led by Pierre Poilievre. The NDP is behind. Both the Liberals and Conservatives have promised things about trade and the economy, like helping workers hurt by the taxes and building stuff. It looks like this election is going to be a big deal for how Canada deals with the US.
How Key Industries Will Feel the Pinch Of The Trade Wars
When countries put extra taxes, called tariffs, on goods, it really messes with businesses. In Canada, some big industries are going to feel this a lot.
- The steel and aluminum sectors, which were the initial targets of US tariffs in 2018 and again in 2025, are particularly vulnerable, given that Canada is the largest foreign supplier of these metals to the United States.
- The automotive sector, characterized by deeply integrated North American supply chains, also faces potential disruption due to the new tariffs. Even though most things are still tax-free under the USMCA deal, the tariffs on steel and aluminum, which are used to make cars, will increase costs.
- Also, the dairy industry is going to be affected. President Trump has talked a lot about dairy, and now, with these tariffs, both Canadian and American dairy companies might lose money.
Experts say this whole trade war could slow down Canada’s economy. People might lose jobs, and things could get more expensive for everyone. Because Canada and the US do so much business together, these tariffs could also hurt businesses and people in America.
What’s Next for Canada-US Trade?
The future of trade relations between Canada and the U.S. is looking pretty uncertain right now. The trust that was once a hallmark of this relationship has been damaged. It’s unclear how long these tariffs will last or if things might escalate further.
Some experts believe that Canada might start looking to build stronger trade ties with other countries to reduce its reliance on the U.S. market. There’s also a feeling that even if these current tariffs are eventually lifted, the U.S. might continue to use the threat of tariffs as a way to gain leverage in future negotiations.
One thing is for sure: this Trump trade war with Canada is more than just a disagreement over dollars and cents. It’s a fundamental challenge to the long-standing alliance between Canada and the United States.
How this unfolds in the coming months and years will have significant consequences for both nations.
