What Trump’s tariff plan means for Canada

President-elect Donald Trump is making threats that would have dire economic consequences for Canada. Trump said on Monday that he would impose a 25 per cent tariff on all goods from Canada and Mexico, until both countries stop migrants and fentanyl from entering the U.S. If he follows through on this, it could cause a major disruption for Canada’s economy, and some fear it could trigger a recession.

The Globe’s senior parliamentary reporter Steven Chase has been tracking the political fallout of the announcement. He explains how Trump’s plan puts pressure on various sectors of the Canadian economy and how Trudeau and the federal government are planning to face it.

[joelscott]

Grow up Canada. No treaty with the Americans has or ever will be worth the paper it’s written on. In the past (historically) Canadians understood this.

[BobLanctot]

Increase the electricity we send south 25%more.

[rachelleallain]

Way to go Trump... Thanks alot for voting him in.. Good job 😮😮😮😮😢😢😢good job people...

[tdpay]

Canada should impose a 100% export tax on uranium and electricity sent to the US. The tax would be used to remedy domestic dislocations caused by Trump's 25% tariff.

[peterosinga]

I am so old I can remember when the Globe was a credible information source.

[RocketRon]

I believe Canada also has some leverage with Potash. With the war between Russian / Ukraine and China restricting exports, there is a significant shortage globally so not a lot of cheap alternative supply and we supply almost 1/2 of all US fertilizer imports. Lots of options there.

[chucktheperson]

One thing is for sure. Trump will never take the blame for anything.

[ddb]

Stop comparing Canada to Mexico. Even one illegal crossing over the Canadian border is too much. Fix the problem.

[LennyDebo]

what about the water the USA wants from Canada

[jeffDwyer]

Tariffs will increase costs of finished goods and components used throughout US manufacturing. This will be an immediate and huge hike in inflation. To fight inflation the Fed will have to hike interest rates which will be wonderful for the billionaires but possibly take away the middle class. Inflation is so high that consumers are literally taking debt for basic life necessities. Collapse has indeed begun..

[Etaoinshrdlu]

Tax the American stores and restaurants

[MaryM-ri]

I'm shocked that anyone would want to leave Canada for the US

[PaulaTerryLancaster]

I simply can't believe how subliterate the people leaving these comments are. The Globe was once read by fairly intelligent people who'd mastered basic grammar and spelling!

[emilschattner]

Now Canada will find out where it's real friends are, and how fragile the business relationship between America and Canada really is.. Time to come to grips how little America cares for Canada's longtime friendship.
It may be a far better strategy to think of improving the relationship with Europe, China and India, even establishing long term trade agreements with them, do anything to wean off Canada's dependency with this arrogant American bully.
In plain English, cut the umbilical cord which connects Canada to America, because this unhealthy relationship is very likely to become a lot worse in the future!

[scottmarquardt]

I live in Duluth, mn., grew up in Seattle. The only thing I've got from Canada is nasty tasting ducks from Manitoba.

[RyanClarkKaotic]

Nafta was a horrible idea...we voted against it and once Mulroney was in power he flipped his campaign.

[angies.]

Please stop it already. Nothing has happened yet. Stop providing oxygen to his bluster. This is exactly what he wants. Why play into his tiny greasy hand? Let’s wait to see how real any of this is before we start panicking, FCS. Get a grip.

[clydemifflin]

What did Biden's AUG-2024 doubling of sofwood lumber tariffs mean for Canada? What did Biden's signing an executive order to buy and hire American in 2021 mean for Canada? What did Biden cancelling Keystone mean for Canada? I get that Trump is no better but why do we ignore Biden's moves that negatively affect Canada?

[Butterflies-are-free]

I think the Commonwealth countries should ban together against the illiberal government against the States!

[neolithictransitrevolution]

"A 25% rise in Oil Prices" is not going to be the reality. We supply half their oil, but the vast majority goes to the midwest theough Enbridge Mainline system. And we have no alternative market at all for these 4M bbl/day.

Whats going to happen will be generally consistent prices paid by US refineries, kept relatively high by Bakken crude from North Dakota and Barges bringing crude from Texas up to Mississippi, and some increased imports from the Atlantic through Pennsylvania pipelines if our output drops.

Our output won't significantly drop, however, because the SAGD operations that feed the US can't be turned off without long term damage (In Covid, Mining production was down some 40%, insitu output was nearly unchanged) and because they have low operating costs, and producers will accept lower prices. The real loaer will be the Government of Alberta, because Royalities are on a scaled system, and lower profits have a much more dramatic effect on Albertas budget.

The other big issue is the oil mines themselves. They are very expensive to operate and ultimately produce a light oil product, and competitive with US shale oil. If its price is increased, refiners are likely to displace it. To some extent this can be offset by having Ontario and Quebec refiners buy more Syncrude and reduce Bakken imports, and a competent policy might include requiring exports to mix Syncrude into DilBit at some level. But this is the biggest risk point, shutting down the oil mines would kill Fort McMurray and destroy an enormous amount of high wage blue collar employment.