Trump launches trade war against Canada with with 25 per cent tariff on most goods

February 1, 2025 Canuck

President Donald Trump launched a trade war against Canada on Saturday by imposing a 25 per cent tariff on virtually all good from the U.S.’s neighbour — an unprecedented strike against a longstanding ally that has the potential to throw the economy into a tailspin.

Trump’s long-threatened plan to inflict economic pain on Canada has materialized on the day he said it would, and it includes a 10 per cent tariff on Canadian energy products, according to a senior Canadian official who shared details of Trump’s plan with CBC News.

These potentially devastating tariffs will take effect on Tuesday and remain in place until Trump is satisfied Canada is doing enough to stop the flow of fentanyl into the U.S., the government official said.

Canada is expected to hit back later Saturday with retaliatory tariffs of its own to make Trump think twice about taking on his country’s biggest customer.

Prime Minister Justin Trudeau is expected to make an announcement at 6 p.m. ET, sources told CBC News.

Below is an earlier version of this story.

Canadians are waiting to see details of the promised U.S. tariffs that could cripple the Canadian economy.

U.S. President Donald Trump has for months been threatening to slap tariffs on Canada, and pegged Feb. 1 as the day they would come. He indicated on Friday that he intends to go ahead with his promise.

On Saturday, a senior government official told CBC News and Radio-Canada that Ottawa has been informed the White House has made a decision on the tariffs, and the Americans are expected to publicly release details of this trade action at some point today.

White House press secretary Karoline Leavitt has said the president will implement a 25 per cent tariff on both Canada and Mexico, plus a 10 per cent tariff on China.

Trump himself gave reporters in the Oval Office a vague picture of how his plan might take shape, saying:

Tariffs will include oil and gas by or “around” Feb. 18.
The levy on oil would “probably” come down to 10 per cent, but it was unclear whether lower duties would apply from the start.
There would be “a lot of tariffs” on steel and aluminum.
Tariffs would “ultimately” include copper, though that will “take a little bit longer.”
The reaction of financial markets to his plans was not a concern.
Tariffs could “substantially” increase over time.

WATCH | Trump says he’ll hit Canada with 25% tariff, ‘probably’ 10% on oil:

Trump says he’ll hit Canada with 25% tariff, ‘probably’ 10% on oil

21 hours ago

Duration 2:27

U.S. President Donald Trump says he is ‘not looking for concessions’ from Canada as the White House confirmed he’s going forward with 25 per cent levies on imports from Canada on Saturday. Trump added he will ‘probably’ set tariffs on Canadian oil at 10 per cent.

Experts have said just a 10 per cent levy would shave billions of dollars off Canada’s GDP and potentially plunge the country into a painful recession requiring government stimulus to prop up the economy.

Trump has shifted back and forth when stating his reasoning for slapping tariffs on Canada. While he initially indicated the tariffs needed to be levied in order to spur the Canadian government to enhance border security, the president has also complained about trade deficits.

On Friday, Trump accused Canada of “treating us very unfairly” on trade.

The U.S. government’s own data suggests the trade in goods deficit with Canada was $55 billion US as of November 2024. But Canadian officials have argued that when oil exports are excluded, the Americans actually have a trade surplus with Canada. The data also excludes the American services Canadians consume — including from the entertainment industry.

Trump has also consistently brought up migrants and drugs entering the U.S. from Canada, even though data suggests the southern border accounts for the vast majority of those entries.

Figures from U.S. Customs and Border Protection show the agency seized just 19.5 kilograms of fentanyl at the northern border last year, compared to 9,570 kilograms at the southwestern one.

Illegal migration through Canada into the U.S. has grown in recent years.

U.S. Customs and Border Protection officers recorded nearly 200,000 encounters at the northern border between October 2023 and September 2024, according to agency data. That is nearly double the number recorded during the same period in 2022 and six times the number seen in 2020.

That said, the number of incidents on the Canadian border last year amounted to barely one per cent of the total number of people stopped by the U.S. Border Patrol from trying to enter the country between checkpoints.

Meanwhile, the U.S. has been the top source for illegal firearms entering Canada.

Still, Ottawa has shown a willingness to engage with Trump on the border issue, announcing a $1.3-billion border package that will result in more personnel and technology to better police the 49th parallel.

But the president said Friday there is nothing the Canadian government could do to convince him to reverse course.

“We’re not looking for a concession. We’ll just see what happens,” Trump said.

A warning about retaliation

If a tit-for-tat scenario plays out, Canada as a smaller country cannot win, Mark Warner, a Canadian and American international trade lawyer, told CBC on Saturday.

“If Canada retaliates, if I look at what the president did with Colombia last weekend, I would expect that Trump would react massively,” he said.

“Unfortunately, we are a smaller country. There’s not a lot of scope to retaliate.”

Warner said Canada should figure out a way to be useful to the United States, such as providing — and not withholding — critical minerals for such things as solar technology and electric vehicles.

Canada has a “strong,” three-stage retaliation plan ready, Foreign Affairs Minister Mélanie Joly said on Friday while in Washington with other cabinet ministers, making a final diplomatic push against U.S. tariffs.

Liberal leadership candidate Chrystia Freeland, in an interview with The Canadian Press on Friday, said Ottawa should target Tesla vehicles and U.S. alcohol as part of its tariff retaliation package.

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