Canada-U.S. trade war heats up, as many urge U.S. to reconsider tariffs

The trade war between Canada and the U.S. continues to boil over as the Trump Administration launched 25 per cent tariffs on Canadian goods March 4, which was swiftly followed by counter measures from Canada.

Canadian Prime Minster Justin Trudeau voiced his disappointment on social media yesterday, saying the U.S. had begun a “trade war against Canada: their closest partner and ally – their closest friend.”

“The moment U.S. tariffs came into effect this morning, so did the Canadian response,” Trudeau posted on X March 4. “Canada will be implementing 25% tariffs against $155 billion of American products. Starting with $30 billion worth of goods immediately, and the remaining $125 billion in 21 days’ time.”

U.S. President Donald Trump responded to the Canada’s retaliatory tariffs on Truth Social, saying, “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”

Trump said prior to the implementation of the tariffs that any country that places retaliatory tariffs on the U.S. would see the same additional tariff on any imported goods to the U.S. from that country.

Trudeau spoke to the media March 4, and news reports indicate that he believes Trump is attempting to cripple the Canadian economy in an effort to make it easier to annex the country, or in Trump’s words, make Canada the 51^st state.

Trump has made several claims about the current trade agreement between Canada and the U.S., as well as voicing concerns about the flow of illegal drugs, particularly fentanyl, across the border.

In response, Canada has appointed Kevin Brosseau as the country’s fentanyl czar in an effort to work with the U.S. on the issue.

“As fentanyl czar, Mr. Brosseau will work closely with U.S. counterparts and law enforcement agencies to accelerate Canada’s ongoing work to detect, disrupt and dismantle the fentanyl trade,” the Prime Minister’s Office said in a statement. “While less than one per cent of the fentanyl intercepted at the U.S. border comes from Canada, any amount of fentanyl is too much. With Canada’s $1.3-billion border plan, we are reinforcing our strong border and stopping the fentanyl trade—with new Black Hawk helicopters, drones, mobile surveillance towers and nearly 10,000 frontline personnel protecting the border.

Organizations and businesses voice concern

Several Canadian organizations and U.S. businesses have voiced concern over the U.S. and Canadian tariffs.

Candace Laing, president and CEO, of the Canadian Chamber of Commerce released a statement saying: “Today’s reckless decision by the U.S. administration is forcing Canada and the U.S. toward recessions, job losses and economic disaster.

“The U.S. government’s self-defeating tariff policy disregards decades of success and trillions in trade to try and revive a failed economic model from the 1800s. Tariffs are a tax on the American people. Rather than bringing back affordability or creating a ‘golden age’ for business, tariffs will cost consumers at the checkout, cost producers more at every point along the supply chain, and force businesses to find alternate suppliers that are less reliable than Canadian ones.

“The U.S. can claim this policy is about hitting Canada where it hurts, but it will soon see the disastrous impacts at home in cities like Detroit, Pittsburgh, and Louisville. The U.S. can save its people from pain by stopping to reassess, as it did in 2018 when it realized the true cost of steel and aluminum tariffs was paid by American manufacturers.

“As for us, now is the time to double down on protecting our economic sovereignty and security. Recent announcements from the federal and provincial governments on internal trade are steps in the right direction, but what we do in this moment can’t be incremental, it must be transformational. To build a resilient, self-reliant and future-proof economy, we need to diversify our trade partners, revamp the tax and regulatory system, and do even more to streamline internal trade.

“Canada is resource and talent rich. Our economic future is ours to determine — it’s time to join our economic strategy with concrete action to not only minimize the short-term damage but to chart a more prosperous path long-term.”

Canadian Manufacturers and Exports said the implementation of tariffs undermines the principles of the United States-Mexico-Canada Agreement (USMCA) and threatens the future of the most successful economic relationship in the world.

“Canada and the U.S. share an integrated manufacturing sector that has been built up over decades supporting millions of jobs on both sides of the border,” CM&E said in a statement. “At a time of global economic uncertainty, our two countries should be working together to strengthen North American industry – not implementing measures that will hurt businesses, workers, and consumers in both nations.

“CME calls on federal government to act swiftly to protect jobs and provide relief to manufacturers most affected by these tariffs. We cannot afford to let these punitive measures weaken Canada’s industrial base.”

The Canadian Agri-Food Trade Alliance (CAFTA) also released a statement saying that the U.S. administration’s decision to impose tariffs on Canadian and Mexican agri-food imports will have negative consequences for Americans, Canadians and Mexicans alike.

“The tariffs announced today leave consumers and businesses in all three countries worse off. They increase costs, disrupt supply chains, and harm American, Canadian, and Mexican consumers and producers,” said Greg Northey, president of CAFTA. “CAFTA will continue to advocate for free and open trade in agriculture and agri-food to benefit consumers, farmers and producers, and we will not relent until order is restored to our integrated North American market.”

“Today’s decision has weakened the United States, along with Canada and Mexico,” added Michael Harvey, executive director of CAFTA. “CAFTA supports the efforts of the Government of Canada to achieve a lifting of the tariffs and return to focus on a rational, rules-based, free trading system that benefits both producers and consumers, regardless of which side of the border they are on.”

South of the border, the U.S. Chamber of Commerce and small business owners are also concerned over the impact the tariffs will have on their operations.

The U.S. Chamber posted on its website that it would like to see the Trump Administration reconsider its policy and remove the tariffs.

“The Chamber supports the administration’s efforts to roll back excessive regulations, decrease taxation, and fix serious problems like our broken border and stopping the flow of fentanyl. We also want to work together to keep costs down, but tariffs will only raise prices and increase the economic pain being felt by everyday Americans across the country.

“Thousands of businesses of all sizes nationwide suddenly facing higher costs and uncertainty will be watching to hear details. Many are beginning to speak out about the impact.

“The Chamber urges reconsideration of this policy and a swift end to these tariffs.”

The U.S. Chamber also posted statements from concerned business owners on the impact of the tariffs.

“My company will feel an immediate, detrimental impact as a result of these tariffs,” Traci Tapani, co-president of Wyoming Machine, said in a statement. “The threats and uncertainty have made it hard to make business decisions, and these kinds of tariffs will make it extremely difficult for small businesses like mine to grow.”

Bill Baburek, owner of Crescent Moon in Omaha, Ne., said: “Ever since the announcement there was going to be tariffs on Mexico and Canada, we saw prices on all materials, including domestic materials, start to increase… we’re talking 75 cents or so on a case of any of our beverages being produced.”