On Saturday, February 1, the White House announced that President Trump had signed an Executive Order imposing tariffs on goods entering America from Canada.
The new U.S. administration announced sweeping punitive trade tariffs of 25 percent on most Canadian goods, while our energy products will be hit with a 10 percent tariff. President Trump claimed that the 10 percent tariff on energy imports is to minimize any disruptive effects on gasoline and home heating oil prices for Americans.
The U.S. President has also imposed tariffs on both Mexico and China. Canada may not be alone in enacting reciprocal tariffs. Mexican President Claudia Sheinbaum said her country will implement a “plan B,” which includes retaliatory tariffs, in response.
Since his inauguration, President Trump has threatened to use tariffs to offset perceived imbalanced trade relationships, and to clamp down on Canada for what he has stated is a failure to stem the flow of cross-border illegal drugs and migrants. President Trump has used the International Emergency Economic Powers Act to execute these tariffs, labelling Canada a national security threat to the United States. Figures show that less than one percent of fentanyl and illegal migrants are coming from Canada into the U.S.
The U.S. tariffs will take effect at 12:01 on Tuesday, February 4, 2025, and will remain in place until the U.S. President considers these crises alleviated. President Trump has also included a retaliation clause in his Executive Order. His directive states if Canada responds with counter-tariffs, he will direct his government to escalate U.S. tariffs to higher levels: “Should Canada retaliate against the United States in response to this action through import duties on United States exports to Canada or similar measures, the President may increase or expand in scope the duties imposed under this order to ensure the efficacy of this action.”
The White House released a Fact Sheet on the tariffs imposed on Canada.
Canada responds
Following meetings on Saturday afternoon with the Canadian Cabinet, and also with Canada’s Provincial and Territorial Premiers, Prime Minister Justin Trudeau announced Canada’s response to the U.S. tariffs. Canada will immediately impose retaliatory tariffs on $155 billion worth of U.S. goods.
In announcing the Canadian countermeasures, Prime Minister Justin Trudeau said, “We will always do what is necessary to defend Canadians, to defend the interest of Canada. We have introduced a suite of measures that are strong, and appropriate. We will continue to defend Canada.” In his address, the Prime Minister also called upon Canadians to ‘Choose Canada’ at the supermarket and when selecting their upcoming travel destinations.
He also stated that he has tried to reach President Trump in advance of the White House’s decision. They have not spoken since the inauguration despite many attempts. The Prime Minister opened his address by speaking directly to Americans stating: “Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities, they will raise costs for you, including food at the grocery store and gas at the pump.”
Highlights of Canada’s response
Canada will impose counter-tariffs of 25 percent on $155B worth of U.S. goods. Starting on Tuesday, February 4, 2025, Canada will levy $30B worth of tariffs and will impose a further $125B worth of tariffs in 21 days. The counter-tariffs will apply to a range of U.S. goods including:
- Consumables: beer, wine, bourbon, fruits, juices and vegetables
- Major consumer goods: furniture, sports goods, perfumes, household appliances
- Materials: lumber, plastics
Canada will also impose non-tariff measures on critical minerals, energy, and procurement. The phased application of tariffs over the next three weeks, according to the Prime Minister, is to allow Canadian companies and supply chains the opportunity to seek to find alternative sources.
Reactions: Opposition leadership and Canada’s premiers
We must put CANADA FIRST. That is why Common Sense Conservatives condemn President Trump’s massive, unjust and unjustified tariffs on Canada’s already weak economy. Canada is the United States’ closest neighbour, greatest ally and best friend…”
— Pierre Poilievre, Leader of the Official Opposition
Mr. Poilievre also stressed the need for the Prime Minister to immediately recall Parliament to pass a Canada First Plan that offers several measures including dollar-for-dollar tariffs targeting U.S. steel and aluminum. He also suggested the government pass an emergency tax cut to bolster the economy and that it greenlight energy and natural resource projects.
Today, Donald Trump has unleashed tariffs on Canada that will hurt all of us – and Americans. Now is a time for Canadians to stand strong and stand together.”
— Jagmeet Singh, Leader, New Democratic Party of Canada
I join Canadians across the country condemning the unjustified tariffs the U.S. introduced on Canadian products entering the American market. These taxes will be paid by Americans, hurting people in both countries.”
— Andrew Furey, Premier of Newfoundland and Labrador
“It’s remarkable to find ourselves at odds with our best friend and neighbour. It will take thoughtfulness and time, but we will get through this. There are things within our control that we must act on. We must ramp up our focus on finding new markets here at home with programs like Nova Scotia Loyal, focus on developing our own resources, eliminate inter-provincial trade barriers and, finally, of course, by looking for international diversification.”
— Tim Houston, Premier of Nova Scotia
In an act that will devastate New Brunswick and American workers, businesses and the economy, Donald Trump announced 25% tariffs on Canadian goods beginning at midnight on February 4th. It is time for Canada to stand strong and united against the threat of tariffs.”
— Susan Holt, Premier of New Brunswick
We’re going to protect ourselves and we’re going to fight Mr. Trump. We didn’t want this trade war, but we’re capable of defending ourselves. We’re capable of overcoming this situation and coming out of it even stronger.”
— François Legault, Premier of Quebec
I’m extremely disappointed that President Trump has chosen to walk away from a trading relationship that for decades has made life better for millions of workers on both sides of the border.”
— Doug Ford, Premier of Ontario
Premier Doug Ford has ordered the LCBO to strip its shelves of American products in response to the U.S. imposing 25 per cent tariffs on most Canadian imports starting n February 4. “Every year, LCBO sells nearly $1 billion worth of American wine, beer, spirits and seltzers. Not anymore,” said Ford in a statement on February 2.
It’s really important right now for all Canadians to stand together and for us to be united. Manitoba fully supports the federal government’s response to these tariffs.”
— Wab Kinew, Premier of Manitoba
I am disappointed with U.S. President Donald Trump’s decision to place tariffs on all Canadian goods. This decision will harm Canadians and Americans alike, and strain the important relationship and alliance between our two nations.”
— Danielle Smith, Premier of Alberta
President Trump’s 25% tariffs are a complete betrayal of the historic bond between our countries and a declaration of economic war against a trusted ally. As British Columbians, and as Canadians, we will stand strong and united in the face of this unprecedented attack.”
— David Eby, Premier of British Columbia
The decision by President Trump to impose tariffs on all Canadian products is disappointing and will damage both our countries’ economies, workers and consumer. Saskatchewan’s exports are crucial to supporting food and energy security across North America and around the world. We will also be working to ensure diversification of Saskatchewan markets for our goods.”
— Scott Moe, Premier of Saskatchewan
Third party reactions from Canadian and American stakeholders
Flavio Volpe, President of the Automotive Parts Manufacturers Association
Said the tariffs would likely “tank” the North American automotive market.
“President Trump’s profoundly disturbing decision to impose tariffs will have immediate and direct consequences on Canadian and American livelihoods. Tariffs will drastically increase the cost of everything for everyone: every day these tariffs are in place hurts families, communities, and businesses.” Candace Laing, President and CEO
“The President is right to focus on major problems like our broken border and the scourge of fentanyl, but the imposition of tariffs under IEEPA is unprecedented, won’t solve these problems, and will only raise prices for American families and upend supply chains.” John Murphy, Senior Vice President and Head of International
American Fuel and Petrochemical Manufacturers Association
“American refiners depend on crude oil from Canada and Mexico to produce the affordable, reliable fuels consumers count on every day. Some regions in our country also rely on Canadian refined products, like gasoline, diesel and heating oil. We are hopeful a resolution can be quickly reached with our North American neighbors so that crude oil, refined products and petrochemicals are removed from the tariff schedule before consumers feel the impact.” Chet Thompson, President and CEO
“The North American auto industry is highly integrated and the imposition of tariffs will be detrimental to American jobs, investment, and consumers. These tariffs undermine the USMCA, a landmark trade agreement negotiated by President Trump that led to unprecedented growth and prosperity for the United States. We urge all parties to reach a swift resolution in order to provide clarity and stability for the entire U.S. auto industry.
“U.S. automakers would be better served by policies that reduce barriers for manufacturers, ease regulations that hinder production, and create greater export opportunities—policies that we look forward to working with President Trump to enact.” Jennifer Safavian, President and CEO
National Association of Manufacturers
“Manufacturers understand the need to deal with any sort of crisis that involves illicit drugs crossing our border, and we hope the three countries can come together quickly to confront this challenge.
“At the same time, protecting manufacturing gains that have come from our strong North American partnership is vital. The success of President Trump’s landmark trade agreement, the United States-Mexico-Canada Agreement, has strengthened North American supply chains and bolstered economic power across the region, boosting jobs, wages and investments here in the United States.
“Thanks to this agreement, one-third of critical U.S. manufacturing inputs now come from Canada or Mexico, rather than from competitors like China that often engage in unfair trade practices.
“However, with essential tax reforms left on the cutting room floor by the last Congress and the Biden administration, manufacturers are already facing mounting cost pressures. A 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally. The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs. These businesses—employing millions of American workers—will face significant disruptions. Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk.
“We stand ready to work with President Trump to ensure a trade strategy that reinforces American strength—holding bad actors accountable while preserving the gains of the successful USMCA and advancing policies that sustain manufacturing growth here at home.” Jay Timmons, President and CEO
“Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth across North America. Our industries have thrived due to the level playing field established across our borders.”
“The trade actions announced by the president will almost certainly trigger significant retaliation against U.S. agricultural products. This comes at a time of deep uncertainty for farmers—commodity prices are volatile, input costs remain high, and we still lack an updated farm bill.
“One thing is clear: American family farmers and ranchers are always the first to bear the brunt of unilateral trade actions. While we support efforts to hold trading partners accountable and strengthen American manufacturing, our members have already suffered heavy losses from past trade disputes, especially with China, and have lost valuable market access.
“Before taking any action that might further stress farm and rural economies, we urge the president to put a plan in place to protect and support family farmers and ranchers.” Rob Larew, President
Chemical Industry Association of Canada
“The impact of these tariffs is not limited to the shop floor or the boardroom. Costs will rise and consumers and businesses alike will shoulder the weight of these tariffs at a time when cost-of-living is already high in both countries. This approach threatens the competitive edge that North America has enjoyed in the global market, hindering our ability to innovate and deliver solutions for the long-term viability of both the American and Canadian economies.” Greg Moffatt, CIAC President and CEO.
