Category World News

The return of United States President Donald Trump to the White House has delivered a jolt to the stewards of Canada’s $2. 1 trillion economy.

Already buffeted by domestic pressures such as stagnating growth and a housing crisis, Ottawa is now facing the threat of tariffs from the US, its biggest trading partner.

Trump’s promise to steer the US on a protectionist course sets up hefty challenges for whoever replaces Prime Minister Justin Trudeau, the country’s deeply unpopular outgoing leader, before national elections that could be held as early as May, economists say.

“It’s a daunting task for whoever takes over from Trudeau because from there it’s a short ramp for an early election call,” Tony Stillo, director of Canada Economics at Oxford Economics, told Al Jazeera.

“It’s very tough. The electorate looks ready for a change and Trudeau may shore up popular support for the Liberal Party with a new face, but it may not be enough. ”

While tariffs barely got a mention in Trump’s inaugural speech on Monday, any hope of a reprieve was banished hours later when he announced that he could impose a 25-percent tariff on Canada and Mexico as soon as February 1.

“What happens to Canadian exports in case of a tariff war with the US – that’s a huge determinant of economic outcomes as 80 percent of our exports go to the US and that’s an awful lot of vulnerability,” Lars Olsberg, an economics professor at Dalhousie University in Halifax, Nova Scotia, told Al Jazeera.

Canada’s exports to the US alone make up about 20 percent of its gross domestic product (GDP).

A 25-percent tariff would have a “significant” effect on the Canadian economy, potentially triggering a recession, Stephen Brown, deputy chief North America economist at Capital Economics, told Al Jazeera.

Brown said, however, that Trump’s tariff threats could be posturing to gain leverage in negotiations over the United States–Mexico–Canada Agreement, which is up for review next year. Trump is a negotiator and “will look for concessions so he can say he’s got a good deal”, Brown said.

Trump has been clear that there are three areas of concern with regard to Canada: the trade deficit, border security and Canada’s relatively low defence spending in NATO.

Ottawa could deal with those in one stroke if it chose to buy more defence equipment from the US, Brown said, which enable it to meet NATO spending targets and boost security on the border.

Canadian officials also have some leverage since the country provides about 20 percent of the crude oil consumed south of the border and could theoretically shut off supplies, he said.

Last week, Canadian Foreign Minister Melanie Joly told reporters that Ottawa was ready to respond to tariffs.

“And we are ready for a second round and we are ready for a third round,” Joly said.

After Trump’s Monday night comments, Canada’s Finance Minister Dominic LeBlanc said it would be “a mistake” for the US to proceed with tariffs.

“It would be a mistake in terms of the cost of living in the United States, in terms of jobs in the United States, the security of supply chains,” LeBlanc said.

A North American trade war would deal a “body blow” to the US economy, resulting in slower growth and higher inflation, unemployment and petrol prices, Oxford Economics said in a note on Tuesday.

That said, there is also the reality of a “lame duck” prime minister who will have to deal with the US administration, Stillo said.

Domestic pressures

Trump aside, Trudeau and his Liberal Party are under pressure on the domestic front amid widespread discontent about unaffordable housing and the state of public services such as child care and healthcare.

Another drag on the government’s popularity has been the carbon tax, which has become a rallying cry of the opposition Conservative Party, led by Pierre Poilievre.

Introduced in 2019 to spur the transition to cleaner energy, the tax has risen four-fold to 80 Canadian dollars ($55. 5) per tonne and is scheduled to reach 170 Canadian dollars ($118) by 2030.

To that effect, opposition leader Poilievre has pledged to “axe the tax”.

While a repeal of the tax would reduce petrol pump prices by 25 cents per litre, scrapping the carbon pricing scheme would also halt rebates provided to eligible individuals and families to offset the cost of higher fuel prices.

“While the net impact on the majority households will likely also be a wash, it will vary for individual households depending on their specific driving habits,” Stillo said.

Then there is immigration.

While immigration helped Canada’s population grow by about 1 percent on average each year over the past decade, the number of residents surged 3. 2 percent between 2023 and 2024, the biggest annual rise since the 1950s.

Blamed for exacerbating pressures on Canada’s housing, healthcare and education, Trudeau in October announced a sharp cut in the migrant intake, upending many lives and business plans in the process.

“One of the tragedies of the Trudeau period is that the consensus on immigration is looking pretty shaky,” said Dalhousie University’s Osberg.

In an October poll released by the Environics Institute for Survey Research, 58 percent of Canadians said the country accepts too many immigrants, up 14 percentage points since 2023. That followed a 17 percentage point increase between 2022 and 2023.

The rise in negative sentiment toward immigration over the two-year period was the most rapid change since the Environics Institute began asking the question in 1977, the institute said.

The results also showed that the proportion of Canadians who say there is too much immigration reached its largest since 1998.

While anti-immigration political parties have made little headway, an increasing number of Canadians are for the first time expressing doubts about who is being admitted to the country and how well they are integrating into Canadian society.

For years, Canada focused its immigration policy on skilled migrants, Olsberg said, except for a brief period after the COVID pandemic when small businesses complained they couldn’t find workers.

“Now you have people working in [coffee chain] Tim Hortons and [department store] Canadian Tire on temporary worker visas. Those are permanent jobs, but now you’re stuck with the consequences,” he said.

Some of the policy changes on immigration are already starting to trickle down to the economy including the reduced number of temporary resident visas being issued. Along with looser mortgage lending rules, housing availability is easing up and rents are starting to drop.

In addition to a slowdown in immigration that has helped drive growth, the next government will also face longstanding structural problems, including low productivity and weak business investment, experts said.

“Increasing inequality and increasing insecurity creates a lot of anger and anxiety,” said Olsberg.

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The administration of United States President Donald Trump has rolled back a decade-old policy that prohibited immigration authorities from making arrests at sensitive locations, including schools, churches and hospitals.

As the repercussions of the move set in on Wednesday, many of those living without documentation in the US expressed fears about the effects it would have on the few aspects of life where they felt secure.

“I don’t sleep,” Iris Gonzalez told The Associated Press news agency from Boston, Massachusetts, where her children have attended school for a decade.

Gonzalez, who came to the US from Guatemala 14 years ago, wondered what will happen if she comes into contact with immigration authorities while attending a court hearing or driving.

“What if they stop me? ” she said.

She also questioned whether she should continue to look for work under the new administration. Still, she was adamant that her children would continue to go to school, where she hoped they would be safe.

“Education is important,” she told the news agency in Spanish.

‘Devastating consequences’

Gonzalez’s story underscores the daily negotiations of those seeking to avoid possible immigration enforcement under Trump, whose political comeback has been predicated on a pledge to undertake “mass deportations”  and limit immigration into the US.

His first days in office have been defined by a slew of executive orders and actions related to immigration enforcement. That has included declaring a national emergency at the US border to surge personnel and resources there, laying the groundwork for expedited deportations, and suspending the CBP One application upon which thousands of asylum seekers were relying for appointments.

Trump has also sought to end so-called birthright citizenship, a move that has already been challenged in court by state officials and rights groups.

And on Tuesday, the second day of Trump’s second term, the Department of Homeland Security (DHS) announced it had ended the policy of avoiding immigration raids on “sensitive” locations.

The shift largely affects two agencies: Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP), both of which had guidance barring enforcement at places like medical centres.

So far, no major immigration enforcements have been reported in the US since Trump took office, but speaking to reporters on Monday, the incoming president said it was only a matter of time.

“I don’t want to say when, but it’s going to happen. It has to happen, or we’re not going to have a country left,” he said.

Rights groups, meanwhile, have spent the weeks since Trump’s November 5 election victory holding trainings with community groups on how best to respond to the forthcoming crackdown.

Many condemned the Department of Homeland Security’s policy shift as setting a dangerous precedent, noting the “sensitive location” policy was designed to assure that those living in the country without documentation were able to access basic services.

“This action could have devastating consequences for immigrant families and their children, including US citizen children, deterring them from receiving medical attention, seeking out disaster relief, attending school, and carrying out everyday activities,” Olivia Golden, the interim executive director of the Center for Law and Social Policy, said in a statement.

“Should ICE presence near such locations become more common, the likelihood also increases that children could witness a parent’s detention, arrest, or other encounters with ICE agents,” Golden said.

‘I can’t imagine why they would do that’

For its part, in a statement announcing the policy change, the Department of Homeland Security claimed that “criminals” used sensitive locations to avoid arrest, without providing data to back up the claim.

“Criminals will no longer be able to hide in America’s schools and churches to avoid arrest,” the statement said.

“The Trump Administration will not tie the hands of our brave law enforcement, and instead trusts them to use common sense. ”

In another sign that Trump is seeking to roll back safeguards for undocumented communities, the Department of Justice has also begun directing its federal prosecutors to investigate state or local officials who stand in the way of increased federal immigration enforcement, according to a memo obtained by The Associated Press on Wednesday.

The move is an apparent salvo against so-called “sanctuary” jurisdictions, where local officials instruct the law enforcement under their control not to coordinate with federal immigration agents.

The Justice Department memo also called for federal prosecutors to return to the practice of charging defendants with the most serious crime it can prove, limiting a prosecutor’s discretion in those cases.

Responding to the Trump administration’s shift on “sensitive” locations, Carmen, an immigrant from Mexico, was incredulous.

“Oh, dead God! ” she told The Associated Press. “I can’t imagine why they would do that. ”

Still, Carmen said she had faith that her local San Francisco Bay Area school system would inform her if it became unsafe for her to bring her four-year-old and six-year-old grandchildren to school.

Among the host of executive orders signed by United States President Donald Trump following his inauguration on Monday was the lifting of sanctions imposed on more than 30 Israeli settler groups and entities by the administration of former President Joe Biden.

Settler violence has long been a fact of life for Palestinians living within the occupied West Bank. But attacks and the theft of Palestinian land have soared since the beginning of Israel’s war on Gaza.

Trump’s move has been celebrated by Israel’s far-right, although it came soon after the new president pushed for a ceasefire in Gaza, much to that faction’s anger. So what can we learn from the removal of sanctions, and what will Trump’s policy on Israel and Palestine be?

What were the sanctions imposed on the settlers?

Under the terms of the sanctions individuals and entities were blocked from accessing all US property, assets, as well as the US financial system.

Who did the sanctions target?

Illegal Israeli settlements have been built across the West Bank since it was seized by Israel in 1967. The settlements are built on seized Palestinian land, and are part of an effort by the setter movement and the Israeli government to increase control over the West Bank. Palestinians emphasise that the settlements – where they are not allowed to live – effectively make it impossible to establish a Palestinian state.

A number of individuals and entities had been hit by the sanctions. Among them were the settlement development organisation Amana, as well as its subsidiary Binyanei Bar Amana Ltd, both of which were determined by US officials to be among the organisations serving as umbrella bodies for violent and extremist settler activity.

Individuals, such as David Chai Chasdai, with convictions in Israel for violence against Palestinians reaching back more than a decade, were also included, as well as many settlers determined by US officials to have established illegal outposts or settlements on Palestinian land, such as the Svis Farm, established by a settler, Zvi Bar Yosef, described by the anti-occupation researcher Dror Etkes, as having been responsible for the “most brutal assaults I’ve ever heard about in terms of settler attacks”.

However, despite the Biden administration’s uncompromising rhetoric, plans to sanction the ultra-Orthodox Netzah Yehuda battalion following a string of alleged abuses, including the arbitrary killing and torture of Palestinian civilians, were shelved after Israeli Prime Minister Benjamin Netanyahu publicly objected.

Why did the US impose sanctions on its ally’s citizens

The sanctions came as the Biden administration faced pressure to use its power to stop Israel’s war on Gaza, including by suspending arms sales.

Unwilling to do so, the administration instead carried out several lesser measures seeking to influence Israel’s actions and signal its displeasure, such as the sanctions on select settler groups and individuals.

In November, former Department of State spokesperson Matthew Miller said that both Biden and his Secretary of State Antony Blinken had “repeatedly stressed with their Israeli counterparts that Israel must do more to stop violence against civilians in the West Bank and hold accountable those responsible for it”.

The Israeli government has been dominated by far-right pro-settlement figures, including Finance Minister Bezalel Smotrich and Itamar Ben-Gvir, who was National Security Minister until last weekend, when he resigned in protest against the ceasefire agreement between Israel and Hamas.

In November, Ben-Gvir responded to an arrest warrant issued by the International Criminal Court for Netanyahu by suggesting Israel should annex the West Bank. Earlier the same month, in anticipation of a Trump presidency, Smotrich went further, ordering preparations be made for the annexation of the occupied territory this year.

Did the sanctions limit the violence?

No.

Through 2024, the period when the US sanctions were imposed, the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) recorded the highest numbers of attacks in the nearly two decades since OCHA began documenting such incidents, noting “approximately 4,250 Palestinians displaced 1,760 structures destroyed, and about 1,400 incidents involving Israeli settlers across the West Bank, including East Jerusalem”.

Al Jazeera and rights groups, including Amnesty International, have tracked numerous incidents of settler violence against Palestinian homes over the course of Israel’s war on Gaza and consistently found settler attacks to have either been ignored or even abetted by security forces under the command of Ben-Gvir.

What has been the Israeli response to the sanctions lifting?

Both Smotrich and Ben-Gvir celebrated the sanctions revocation by Trump.

Posting on social media Ben-Gvir wrote that he welcomed the “historic decision of incoming US President Donald Trump to lift the sanctions imposed by the Biden administration on the settlers of Judea and Samaria”, he said, using the term for the occupied West Bank used by the Israeli government.

Finance Minister Smotrich was equally explicit, characterising the sanctions as “a severe and blatant foreign intervention in Israel’s internal affairs”

I sincerely thank President Donald Trump for his just decision to lift the sanctions imposed by the Biden administration against settlers and activists in right-wing organizations. These sanctions were a severe and blatant foreign intervention in Israel’s internal affairs and an… pic. twitter. com/Lp1I8oFixa

Is this a sign of what Trump’s policy on Israel and Palestine will be?

While many in the pro-Palestinian camp have given Trump credit for pushing for a ceasefire in Gaza, he was overwhelmingly pro-Israel in his first term and is likely to be the same in the next four years.

Trump has been willing to give the Israeli right-wing several wins in the past even when it has gone against long-term US policy. For example, he moved the US embassy to Jerusalem and recognised Israel’s illegal annexation of the Syrian Golan Heights in his first term in office. He also presented an initiative that would have recognised Israeli sovereignty over illegal settlement blocs in the West Bank.

Members of his current circle include Mike Huckabee, Trump’s evangelical and pro-settlement pick for US Ambassador to Israel, as well as “mega-donor” billionaire Miriam Adelson, who is reported to support the Israeli annexation of the West Bank, suggest that Israeli ambitions for the territory may be drawing closer, HA Hellyer, a senior fellow at the Royal United Services Institute, said.

The Trump administration has also nominated Republican congresswoman Elise Stefanik as US Ambassador to the United Nations. Stefanik has spoken of Israel’s “biblical right” to the West Bank, and has characterised the number of times UN votes have gone against Israel as evidence of the organisation’s “anti-Semitic rot”.