Trump’s tariffs unleash ‘existential fight’ for Canada

Donald Trump, president of the United States, has trumped his threats.

The Trump administration imposed 25% blanket tariffs on Canadian imports, not including energy, which was severely affected on Tuesday.

Trump also imposed a 25% tariff on Mexico and increased it to 20% from China.

Francis Donald and Cynthia Leach, economists at the Royal Bank of Canada, claim that this has been the country’s biggest trade shock in nearly a century.

The Asia Pacific Foundation of Canada’s vice president of research and strategy, Vina Nadjibulla, referred to the tariffs as an “existential fight” for the country.

Regardless of the impact, all economists concur that a US-Canada trade war has begun.

In retaliation, Canada imposed 25% tariffs on 30 billion Canadian dollars ($21 billion) worth of US imports, and it has stated that it will apply to additional 125 billion Canadian dollars ($87 billion) in goods if necessary in 21 days.

Mexico has promised to respond in kind, but it has delayed any action until Sunday.

From March 10, China has announced the imposition of 10 to 15% tariffs on some US imports, as well as a number of new export restrictions for specific US entities.

In addition to the actions of Tuesday, it has complained to the World Trade Organization.

The length of the tariff war is still “in the US’s court,” according to Rachel Ziemba, an adjunct senior fellow at the Center for a New American Security.

However, Ziemba said, more tailored tariffs are still in place and will likely lead to inflation, which will hurt the economies of all the participating nations.

According to Ziemba, “the economic impact will be significant on all sides as prices and inflation rise, and businesses struggle to plan both for these tariffs and the upcoming additional tariffs,” Ziemba cited Trump’s pledge to impose reciprocal tariffs on all nations that impose levies on US products.

It’s very difficult to predict where this will lead, according to professor Brett House at Columbia Business School.

According to House, “There will be more tariffs on more countries before any rollbacks will occur,” while adding that “The Trump White House moves capriciously and changes its mind” frequently.

While negotiations are possible, Trump’s claims that his tariffs on Canada were based on “absolutely false” information and that unauthorised migrants, guns, and drugs have been moving in the opposite direction have been true.

Recent data from the Canada Border Services Agency (CBSA) revealed a growing influx of illegal US weapons and drugs in recent months, according to a report from CBC News in Canada. For instance, drug hauls increased from 3.8 million grams (600 stone) to 8.3 million grams (301 stone) in 2024, surpassing the amount seized by their US counterparts along the border.

A “profound shift”

Trump typically responds to flattery or force, according to House, and Canada has already tried flattery, even though everything is negotiable.

House claimed that “the Prime Minister’s office is now reversing to force.”

Canada is considering imposing tariffs on US electricity exports in addition to the tariffs it has announced so far.

In addition, the situation has brought a question that has raged in response to threats from Ottawa’s closest ally: What is the future of the US-Canada relationship?

According to some Canadian estimates, Trump’s tariffs could result in the loss of up to 1.5 million jobs and a recession for the country.

Trump’s plan to “cause the total collapse of the Canadian economy because that will make it easier to annex us,” according to Canadian Prime Minister Justin Trudeau on Tuesday.

“This is more than just tariffs,” he said. The relationship between Canada and the US is the most disturbing and profound shift right now, according to Nadjibulla, vice president of research and strategy at the Asia Pacific Foundation of Canada.

No one knows what the future holds, so this is an existential conflict that will call for leadership from all provinces and parties.

Nadjibulla said it was not clear whether the current tensions will be resolved solely through trade or through negotiations in other areas, such as defense and security.

There has now been a paradigm shift in how to view the relationship between the US and its traditional allies, she continued.

“It’s obvious that we need to strengthen our own national resilience,” she said. “We also need to strengthen our ability to trade and collaborate with others all over the world.” It’s a “wake-up call for Canada,” he said.

However, it also serves as a wake-up call for Mexico, as some Canadian premiers suggested that Canada draft a new US-Mexico-Canada Agreement.

According to House, “there is strength in numbers,” and “any bully like the US president has the strategy of dividing and ensuring his counterparts are negotiating individually.”

House warned that suggestions that Canada might leave Mexico out of a pending trade agreement, which fits Trump’s plan to break up the parties so they don’t negotiate from a position of solidarity, could damage Ottawa’s relationship with Mexico.

US Commerce Secretary Howard Lutnick told Fox Business on Tuesday that Trump will negotiate tariff agreements with Canada and Mexico, and that a decision will be made on Wednesday.

Whatever agreement is reached, it won’t completely repair the damage that has been done to the North American trade partners, Ziemba said, especially given the potential for additional tariffs on a number of sectors in the future.

That being said, “a truce is possible and the cost of a trade war is great.”

Source: Aljazeera