U.S Tarrifs

  As Canada faces a bombardment of tariffs by U.S. President Donald Trump, it has strained the United States deep-rooted relationship with Canada. 

Over the course of his second term in office, Trump has threatened Canada’s economy and sovereignty with new import taxes, going as far as suggesting that Canada could join the U.S.A.as the 51st state; those two combined have outraged Canadians, whose government has responded with its own measures, while uncertainty grows for businesses and consumers on both sides of the border. 

What are the tariffs? 

Tariffs are taxes that a government charges on goods that are brought in from other countries. Usually the government sets a tax, usually as a percentage of the items' value. Then the importing business pays the tax to the customs authority when the goods enter the country.  These lead to higher prices because businesses often pass these extra costs on to shoppers, making foreign products more expensive in stores. 

TIMELINE:

Recently, Trump imposed 50% U.S. tariffs on $20 billion dollars' worth of Canadian imports. These kicked in on Saturday after last-ditch negotiations failed, and Canada‘s PM Mark Carney promised to match the new import taxes. 

In the months of January-March 2025, Trump said he expected on his first day of office that he expects to put a 25% tariff on imports from Canada. He did this later by signing an executive order to impose 25% tariffs on imports from Canada starting Feb. 4th, 2025, he invoked his power by declaring a national emergency over undocumented immigration trafficking. Justin Trudeau, who was prime minister, promised retaliatory actions. Those tariffs pushed back, easing tensions. Trump agreed to a 30-day pause, and more limited tariffs on Canadian imports kicked in on March 4th. Within days, the U.S. exempted automakers and postponed the 25% tariff on goods that comply with the US-Mexico-Canada agreement. 

In the months of April and June, there were a lot more. Trump had announced his long promised “reciprocal” tariffs on nearly all of America’s trading partners on April 2, 2026, but didn’t announce levies on Canada anymore. Trump then faces legal challenges to those tariffs that he invoked emergency powers to impose, which went over the “reciprocal levies, and the 25% rate he put on Canadian goods earlier in the year. The U.S. Court of International Trade had ruled that Trump went beyond his power, but a federal appeals court halted that order. Meanwhile, other sectional tariffs pile up. Trump’s 25% tariffs on auto imports also begin in April 2025, and Canada responded by matching that rate with a tariff on non-USMCA-compliant vehicles imported from the U.S. Trump’s new 50% tariffs on nearly all foreign steel and aluminum will take effect in June 2025; Carnet threatened to impose new tariffs on U.S steel and aluminum starting in July. There are pending progress of trade talks, and negotiations hit a pause after Trump aimed at Canada‘s plans to continue with a tax on tech firms.  

In the months of July-October, tensions bubbled up again after Trump threatened and imposed a heightened 35% tariff rate on a range of Canadian goods starting Aug. 1, 2025. Throughout the world, the U.S.’s new 50% tax on imported copper kicked in the same day. 

Later that month, Carney says that Canada will drop many of its retaliatory tariffs to match U.S. exemptions for goods covered under the USMCA pact. Critics decry the move as capitulation to Trump, but the prime minister maintains Canada is in a good position. While Trump imposed more tariffs worldwide in the coming weeks and months, he also ends the de minimis rule on August 29th for low-value imports coming into the U.S. In late October, Carney outlines a plan for Canada to double its non-U.S. exports in the next decade, citing the effects of Trump's tariffs. Trump is also angry over a T.V. ad opposing U.S. tariffs leading to him not discussing trade talks with Canada. Ontario Premier Doug Ford, whose provincial government paid for that ad, later says he will remove the ad so talks may resume, although Trump still threatens an added 10% tariff. 

In November 2025 and February 2026, the tariffs Trump imposed using emergency powers made it to the supreme court, and in a  February 6-3 decisions strike the import taxes and the country-specific levies imposed on Canada. Trump quickly put a temporary 10% levy using a different law. U.S.- Canada trade relations had been deteriorating ahead of that ruling. In January, the prime minister of Canada focused on mending trading ties with China and, in a break from the U.S., soon agreed to cut Canadian tariffs on Chinese EVs. An angry Trump later threatened (but didn't put) a 100% tariff on Canadian goods if Canada moved forward with the deal with China. Trump also threatened a 50% levy on a Canadian aircraft sold to the U.S but didn’t do it, and he also threatened to block the opening of a new Canadian-built bridge across the Detroit River. 

March to today, there were negotiations to renew the US-Mexico-Canada Agreement, or USMCA, and ahead of the official July 1st review date, Canada calls for the pact to be renewed for 16 years. So far, it looks cloudy, and the U.S. eventually rules that it's not ready to new that pact for that length of time, leaving the pact in effect till its 2036 expiration date. Then in July Trump threatens to impose more tariffs, slapping 50% levies on Canadian goods, including those that were previously protected by the USMCA. Those levies were supposed to start on August 19th, but Trump announced that they reached a deal to delay the taxes until August 22nd; its key terms weren't disclosed, and when last-minute negotiations failed, the new tariffs kicked in. 

HOW ARE PEOPLE DEALING WITH THE TARRIFS:  

Small businesses are getting hit. U.S. tariffs on Chinese products went as high as 135% before the Trump administration rolled them back. CEO Beth Benike, owner of Busy Baby, a Minnesota-based company that makes baby products, has been scrambling to figure out how to deal with the changing tariffs on products her company makes in China. They had low revenue and debt was piling up; she didn’t pay herself for the whole summer and cashed in her retirement to keep the business afloat. While some bigger companies like Walmart are reinvesting the tariff refunds following the Supreme Court striking down certain duties and massive retailers received huge federal payouts, Walmart revived a $ 2.9 billion refund. These are just the 2 ways that small businesses and huge chains are coping with the tariffs. 

Prediction of future: 

The Tax Foundation estimates that new tariffs will reduce long-run U.S. GDP by 0.4% and decrease the overall capital stock by 0.3 percent. There are long-term projects that indicate a reduction equivalent to 345,000 full-time jobs due to slowed economic activity. Analysts estimate that tariffs increase average household tax burdens significantly, equivalent to hundreds of dollars per family per year depending on the active tariff rates. 

Written By: Trinity Kejbou

                                   Sources: 

Small business owner shares how Trump's tariffs affected sales: NPR 

Tracking the Economic Effects of Tariffs | The Budget Lab 

Trump's trade wars: A timeline of how we got here | AP News