Fighting a trade war is not like fighting a military war. A people’s arsenals and armories can be found in their pantries and closets; our war material is our raw material. The recent threat of increased tariffs between Canada and the United States is a direct result of the “American effect” emphasizing the Canadian urge to reconstruct our foundational framework by buying local and selling global.
Amid recent trade disputes, Canadians are left wondering what industries these added taxes will affect the most, especially with $2 billion of goods crossing the border each day. Canada’s energy and automotive industries are the most highly integrated, with the U.S. supply chain putting them at a high risk of shutdowns and recessions following Trump’s tariff threat. Furthermore, the Canadian Mental Health Association (CMHA) also warned that a 25 percent tariff would strain Ontario’s healthcare system, which will significantly increase mental health and addiction issues. On the other side of the border, analysts have predicted a $3000 rise in automobile prices due to higher costs of imported parts received from Canada like steel and aluminum, should the tariffs resume. Additional effects felt by America’s rising costs would include but are not limited to: housing (Canadian lumber imports), oil, avocados, and of course, maple syrup. Conclusively, both countries are expected to face job losses, shrinking GDPs, and higher costs on goods if a long-term agreement is not reached within the next month.
In the past week, U.S. President Donald Trump has impacted decades of economic progress– with the Canadian dollar rate dropping down to its weakest level in over two decades. On February 4, U.S. trade advisor Peter Navarro stated that the increased tariffs were a result of drug control efforts– claiming that Mexican drug cartels are expanding in Canada. In response to this, both Prime Minister Justin Trudeau and Conservative Party Leader Pierre Poilievre stated that they are committed to enhancing border security. Other Canadian leaders like Premier Scott Moe suggested integrating the Canadian Border Services Agency (CBSA) with the military to repair Canada’s defensive shortcomings and meet NATO spending targets.
While Canadian leaders are working hard to reach an agreement with Trump, Canadians are calling for economic resilience through a less U.S. dependent economy. To reciprocate America’s actions, Canada decided to respond with 25% retaliatory tariffs on U.S. goods and announced boycotting efforts on U.S. imported foods—specifically produce—while encouraging Canadians to start buying frozen or canned produce rather than fresh. In doing this, many Canadians have decided to take matters into their own hands by boycotting all American products and actively supporting local businesses. Grocers in provinces such as Ontario and Newfoundland began to label Canadian goods to help consumers avoid U.S. imports. Additionally, Ontario has cancelled its $100 million contract with Starlink along with other U.S. companies. Seeing that a variety of different sectors are at risk, many industries are calling for a unified response to protect agricultural supply chains and help strengthen domestic manufacturing.
With many stores itching to get rid of their American products, experts are advising against “panic selling” amid the uncertain effects of the tariffs. In response to this, British Columbia, Quebec, and Ontario have paused retaliatory efforts by returning U.S. alcohol to shelves. Additionally, Foreign Affairs Minister Melanie Joly suggested lobbying U.S. officials and implementing a border plan in hopes of pushing Trump to pull back on his Tariff threats. As a response to this, Trudeau has announced that Canada is currently committing a $200 million “Fentanyl Czar” to help mitigate America’s alleged concern over drug trafficking. Poilievre also proposed hiring two thousand border agents while simultaneously deploying Canadian Forces troops in hopes of improving border security. South of the U.S., Mexico has also agreed to cooperate with the U.S. to address arms trafficking. Amid Canada and Mexico’s cooperation with the U.S. the week of February 3, 2025, Trump has agreed to delay the tariffs on both countries for 30 days to allow for further negotiations and determine whether trade hostilities will permanently subside.
Though the imposition of American tariffs on Canadian goods has led to billions of dollars lost in the past, they were also short-lived with President Trump lifting the tariffs the following year after reaching an agreement with both Mexico and Canada as seen with the increased steel and aluminum tariffs in 2018. A tried-and-true strategy adopted by President Trump’s administration that directly aligns with their “America First” agenda; threatening to cut ties to secure better deals without causing immediate economic harm to U.S. consumers. Though the temporary pause on tariffs has brought relief to Canadian politicians and businesses, Canadians are beginning to question their dependence on such an economically unreliable neighbour with former finance minister Chrystia Freeland claiming that “the U.S. is angering its largest customer, Canada” without proper regard to its consequences.
