The conflict between Canada and the United States has been roaring on for a while, but with Prime Minister Justin Trudeau and President Donald Trump directing other kings’ moves, the trade war has gotten intense. It’s the recently imposed heavy tariffs by the U.S. government on Canadian imports that have triggered reactions from Canada whose prime minister has already fled into defensive mode.
On March 3, 2025, President Trump made an announcement that tariffs on Canadian imports into the United States would now be increased by 25% on the grounds of national security and the import of illicit substances, particularly citing fentanyl, a synthetic opioid, as the biggest hindrance.
Trump stated that the imposition of the tariffs would improve American businesses by reducing the influx of illegal drugs into the United States. Prime Minister Trudeau could not hide his disdain directed at the tariffs, calling them “unjustified” and “very dumb,” and claimed: “Canada has been a good buddy and a trading partner to the United States.”
He pointed out that the facts show that less than one percent of fentanyl intercepted at the U.S. border comes from Canada; hence, the U.S. reasons for the tariffs are simply baseless. And Trudeau further declared that Canada would impose counter-tariffs worth more than $100 billion on U.S. products to match the disappeared U.S. tariffs. Canada’s counter-tariffs are thus aimed at creating pressure on key industries in the United States.
First off, a 25% tariff will be added on the $30 billion worth of goods imported from the U.S., which, if the U.S. carries on with these tariffs, could later affect other imports to the tune of $125 billion. It would be directed against agriculture and industrial goods, impacting the type of the economy the United States operates.
With Ontario Premier Doug Ford having escalated the situation by speaking of cutting electricity exports to the United States, Ontario supplies power to several U.S. states, including Michigan, New York, and Minnesota.
Ford stated, “If they would like to try and annihilate Ontario, I will do everything, including cut off their energy, with a smile on my face.” This threat indicates that Canada’s response is becoming more serious and that it is willing to wield a significant commodity in the dispute over trade.
Risks to the economy and politics
Tariffs and counter-tariffs have far-reaching repercussions for both economies. For example, consumers in the U.S. could pay more for food, gasoline, and cars because of higher import prices. American factories that rely on Canadian materials and components will have their supply chains disrupted, resulting in job loss and increased manufacturing costs.
Public sentiment and nationalism
Canadians have reacted by boycotting American-produced goods and booing the US national anthem at hockey games in recent weeks. This was encapsulated in a statement by Trudeau: “Canadians are hurt. Canadians are angried. We are going to choose to not go on vacation in Florida. We are going to choose to try and buy Canadian products… and Yeah, we are probably going to keep booing the American anthem.”
At the same time, the administration’s tough position stands in support for many within the United States who espouse a protectionist approach, placing American industries in a preferred position. There is great concern, however, among consumers and businesses about the potential adverse impact of a prolonged trade war. As this trade war unfolds, both nations are increasingly under pressure to reach a compromise. While diplomatic channels remain open, there is entrenched leadership on both sides of an immediate resolution.
