Canada Will Stand Firm Despite Trump’s Disastrous Tariffs | Opinion

Tariffs on. Tariffs off. Tariffs on. Tariffs off. Just a day after President Donald Trump imposed long-awaited tariffs on Canada, his administration swiftly granted exemptions for the auto industry until April 2 and effectively removed goods shipped under the U.S.-Mexico-Canada Agreement—amounting to 38 percent of Canadian exports—from the tariff list until next month.

Last week was a whirlwind of chaos. Rapid trade policy shifts left businesses scrambling, markets uncertain, and governments frustrated. Canadian manufacturers rushed to revise production plans, while once-stable supply chains plunged into turmoil. Financial analysts struggled to gauge the long-term effects of ever-changing policies. Meanwhile, U.S. firms reliant on Canadian materials faced a costly dilemma: absorb rising costs or pass them to consumers.

Canada’s foreign affairs minister calls it a “psychodrama”—instability is the only constant. The Trump administration favors bluster over diplomacy, treating Canada with disdain. For Canada, it’s an existential threat; for Trump, a game. He mocks Justin Trudeau, claiming the Canadian prime minister is exploiting tariffs to stay in power—which he isn’t.

For more than a century, the U.S. and Canada built a close, prosperous partnership—standing together in war, mutually fueling their economies through trade, and maintaining the world’s longest undefended border. Trump has upended that relationship, sparking a trade war that threatens families, businesses, and political stability.

Trump’s 25 percent tariffs on Canadian imports—auto parts, steel, aluminum, and food—escalate his economic nationalism. What began under the pretext of stopping fentanyl and migration, then was framed as job protection, will end up disrupting a vital supply chain. The fallout is clear: U.S. automakers warn of pricier vehicles, grocers brace for higher food costs, and Ontario Premier Doug Ford threatens to cut and tax energy exports in retaliation.

Trump is using tariffs to pressure Canada, demanding Trudeau drop counter-tariffs. But Canada stands firm, reinforcing economic independence from the U.S. by expanding trade with Europe, Japan, and South Korea.

Mark Carney’s decisive election victory as the new leader of Canada’s Liberal Party—and by extension, its next prime minister—underscored this resolve. In his victory speech, Carney delivered a defiant message: “The Americans want our resources, our water, our land, our country…. If they succeed, they would destroy our way of life.” He framed Trump’s trade war as an existential threat to Canadian sovereignty, rallying the country around economic independence and a renewed national identity. Carney rejected the notion that Canada should bow to U.S. pressure, vowing instead to forge new trade corridors and build a self-reliant economy. “We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves,” he declared, making clear that Canada would not back down.

In Ontario, meanwhile, Doug Ford has rebranded himself as “Captain Canada,” rallying voters to resist U.S. trade aggression.

This nationalist rhetoric reflects a broader shift in Canada’s stance—one of defiance, resilience, and a growing determination to reduce reliance on an increasingly unpredictable U.S.

Trudeau announced a tit-for-tat 25 percent tariff on $20.7 billion worth of U.S. imports, with an additional $86.2 billion in tariffs planned if Trump does not back down. The provinces have also taken aggressive action, with Ontario saying it will impose a 25 percent surcharge on energy exports to New York, Michigan, and Minnesota, and many provinces removing American alcohol from government-run stores.

This trade war is fundamentally self-defeating. The U.S.-Canada trade relationship is the world’s largest and most integrated bilateral economic partnership. In 2023, nearly $3.6 billion CAD ($2.7 billion USD) in goods and services crossed the border daily, making Canada the top market for U.S. exports. Ontario alone ranks as America’s third-largest trading partner, supporting millions of U.S. jobs through a near-balanced $365.3 billion USD trade relationship. It is the top export destination for 17 U.S. states and the second largest for 11 others. Its role in North American commerce is critical.

The U.S. runs a modest $45 billion trade deficit with Canada, primarily due to energy imports. Former Prime Minister Stephen Harper—who once called himself “the most pro-American prime minister in the history of our country”—has argued this deficit is misleading, as it stems from the U.S. buying Canadian oil and gas at discounted prices. “It’s actually Canada that subsidizes the United States in this regard,” Harper noted.

Additionally, over 76 percent of Canadian exports to the U.S. serve as inputs for American industries, highlighting deep economic interdependence. Because of this mutual reliance, tariffs would disrupt supply chains, raise prices, and fuel economic uncertainty on both sides of the border.

Ford has warned that a trade war would hurt not only Canada but also American workers, businesses, and consumers. The Tax Foundation found that Trump’s 2018-2019 tariffs—which Joe Biden largely retained—reduced long-run GDP by 0.2 percent, shrank the capital stock by 0.1 percent, and cost 142,000 full-time jobs. Rising production costs led to job losses in key industries like automotive manufacturing, construction, and agriculture. Economists warn that repeating this policy would further weaken the U.S. economy, yet Trump’s protectionist rhetoric—framed as “saving American jobs”—continues to resonate with his base.

While Trump’s base views protectionism as a winning strategy, key economic regions like Michigan, Pennsylvania, and Wisconsin risk job losses—fueling potential political backlash. Even beyond the Rust Belt, states like New York, California, and Arizona have raised supply chain concerns, while Vermont worries about its $2.6 billion in Canadian imports, over half from the energy sector.

By imposing tariffs, Trump is not only hurting Canada—he is hurting American businesses that rely on Canadian suppliers and consumers. The Federal Reserve Bank of Atlanta estimates that tariffs could lead to price hikes on around a quarter of all consumer goods, increasing household costs by up to 1.63 percent if companies pass along the full cost.

Contributing to these economic concerns is the growing “Boycott America” movement, which threatens not only U.S. exports but also tourism. Canadians make up the largest group of foreign visitors to the U.S. The U.S. Travel Association warned that a travel boycott by Canadians could cost $2.1 billion.

Frustration among Canadians is mounting. Trump’s rhetoric—including suggestions that Canada would be better off as “the 51st state”—has fueled nationalist sentiment​. Canadian fans repeatedly booed the U.S. national anthem at recent sporting events. A recent poll found that only 15 percent of Canadians now see the U.S. as a trusted ally and partner, while 52 percent of Americans still feel that way about Canada. Worse, a survey conducted just before the tariffs took effect revealed that 27 percent of Canadians now view the U.S. as an enemy, while only 30 percent still see it as an ally. I have no doubt those numbers have worsened. Another poll showed that 85 percent of Canadians are looking to replace U.S. goods with alternatives.

Trump’s tariffs will make Canadian goods costlier and boost European and Asian competitors. Germany, Japan, and South Korea will gain U.S. market share, weakening North American trade and undermining America’s own economy. In effect, Trump is cutting off America’s nose to spite its face, weakening its own economic position while strengthening global competitors.

The damage extends beyond economics. Trump’s trade war is straining U.S.-Canada ties across political, military, social, and cultural spheres, eroding a partnership built over generations. Having lived in both countries, I’ve seen firsthand how deeply connected we are—not just in trade, but as allies, neighbors, and cultural partners. Now, that bond is unraveling.

Faisal Kutty is a lawyer, law professor, and regular contributor to The Toronto Star.

The views expressed in this article are the writer’s own.