US Tariffs News and Updates
Canadian politics has been dominated by the US election and its implications since the results were announced. Early on, the news was largely speculation about how Canada would approach its relationship with the new administration. However, President-elect Trump’s threat to impose 25% tariffs on Canadian goods entering the US unless Canada curbs the flow of drugs and migrants across their borders sent politicians across the country into a frenzy.
Donald Trump's Threats
Trump’s threat spurred a series of high-level meetings between the Prime Minister and Premiers and between the Prime Minister and the president-elect. Premiers of various provinces have also held their own meetings with US agencies to put together plans to meet Trump’s demands.
Before Mr. Trump had made any statements on Canada, Ontario Premier Doug Ford made headlines, suggesting that Canada negotiate a bilateral free trade deal with the United States, to supersede CUSMA and cut out Mexico.[1] The statement caused quite a stir, and Ford went so far as to chair a call with all of the provincial Premiers to discuss the idea. He went on to reiterate his position and claims that the other Provinces were on board with the idea. No Premiers went on record to say otherwise, although Newfoundland and Labrador Premier Andrew Furey did say that that plan was meant as a “contingency”.
The reason for taking this position is out of concerns that Mexico is not living up to the spirit of the decades old free trade agreement between the North American countries. The allegation is that Mexico is acting as a backdoor for foreign countries, especially China, to bypass the lion’s share of tariffs and trade restrictions by using its privileged position as a free trade partner with the United States.
For his part, the Prime Minister raised the issue with Mexico’s president, and both leaders acknowledged genuine concerns exist from Canada’s perspective, although the Prime Minister made it clear he does not share Ford’s opinion on cutting Mexico out of any trade deals.
[1] Ontario Premier Doug Ford wants separate U.S., Mexico trade deals ‘now,’ not in 2026 | CBC News
Post Meeting
After meeting with the Premiers, Prime Minister Trudeau visited Mar-a-lago to discuss the matter with Trump directly. Coming out of that meeting, President Trump described the meeting as “productive”. The President emphasized the illegal drug trade, illegal immigration, and reworking the US’s trading relationship with Canada to better protect American workers. The Prime Minister spoke highly of the exchange between the two, coming as somewhat of a surprise. Trudeau called the meeting “an excellent conversation”.
These statements and meetings have resulted in Canada rapidly exploring ways in which it might ramp up border security. Canada has already committed to procuring drones and additional helicopters to beef up border patrols, and the RCMP commissioner stated that it is considering deploying RCMP cadets to assist with border patrol duties.
It is not clear if Trump intends to carry through on his tariff threats or if they are primarily intended as a bargaining tactic. Regardless of the Trump administration’s plans, the fact remains that 70% of Canada’s exports go to the United States, and tariffs of any kind will be devastating to the Canadian economy.
Industries across Canada re concerned about the impacts tariffs would have. Lisa Baiton, president and CEO of the Calgary-based Canadian Association of Petroleum Producers, said the levy would likely mean Canada producing less oil. However, it is estimated that around 40% of the crude that runs through US oil refineries is imported, and most it comes from Canada. Canadian oil is especially important in the Midwest. Patrick De Haan, a Chicago-based gas prices analyst, estimated that states like Minnesota, Wisconsin and Michigan could see gas prices rising by up to 75 cents a gallon if tariffs are placed on Canadian oil and gas.[2] Americans are already grappling with the high cost of living, a spike in gas prices would most likely cause wide-spread discontent.
Next Steps
The Trudeau administration has already begun organizing a more formal response to the President-elect’s demands. First and foremost will be the announcement of an official plan from the Minister of Public Safety Dominic LeBlanc “in the coming weeks”. Additionally, the Prime Minister has called for a meeting between himself and the various opposition leaders in Parliament in order to present a united front against any threats to the Canadian economy.