Canada Slaps 25% Tariffs on US Goods in Retaliation to Trump’s New Measures

Ottawa, February 1, 2025 — In a decisive move that is sure to deepen tensions between the two countries, Canadian Prime Minister Justin Trudeau announced that Canada will impose retaliatory tariffs on a wide range of U.S. imports. The tariffs, set at 25%, will target C$155 billion ($107 billion) worth of U.S. goods, including American beer, wine, bourbon, clothing, and even orange juice from U.S. President Donald Trump’s home state of Florida.

The tariffs are a direct response to President Trump’s recent decision to impose 25% tariffs on Canadian and Mexican imports, along with a 10% tariff on goods from China. Trump’s actions have prompted fears of a full-blown trade war, which economists say could hurt global economic growth and contribute to rising inflation.

In a press conference on Saturday, Trudeau laid out the details of Canada’s retaliatory measures, confirming that duties on C$30 billion worth of U.S. products would take effect on Tuesday, February 4—coinciding with the launch of Trump’s own tariffs. The remaining C$125 billion in tariffs will be phased in over the following three weeks, with full implementation expected by the end of the month.

“Tariffs against Canada will put your jobs at risk, potentially shutting down American auto assembly plants and other manufacturing facilities,” Trudeau warned U.S. citizens during the briefing. “They will raise costs for you, including food at the grocery store and gas at the pump.”

Canada’s Trade Relationship with the U.S.

The U.S. and Canada share the world’s longest border, stretching 9,000 km (5,600 miles), and their trade relationship is a vital part of both economies. In 2023 alone, more than $2.5 billion worth of goods crossed the border daily, with energy and manufacturing being key drivers of this trade.

Canada is the U.S.’s largest trading partner, and the relationship has been central to Canada’s economy. In 2023, Canada exported nearly C$550 billion worth of goods and services to the U.S., accounting for over three-quarters of Canada’s total exports. Energy products made up 30% of these exports, while manufacturing contributed around 15%. Exports to the U.S. represent roughly 17.8% of Canada’s GDP and support over 2.4 million jobs across the country.

This trade surplus, which has often been a point of contention for President Trump, has now become a focal point in the ongoing dispute. Trump has frequently criticized Canada for this surplus, arguing that it disadvantages U.S. workers and industries.

Economic Fallout and Political Tensions

The trade war comes at a particularly challenging time for Canada, as the country grapples with a political crisis and a leadership race within Trudeau’s Liberal Party. With Trudeau facing low approval ratings, he has announced plans to step down once a new party leader is chosen. Recent opinion polls suggest that the opposition Conservative Party could win the next federal election by a substantial margin.

In his speech, Trudeau acknowledged the deep, historical ties between Canada and the U.S., invoking the shared sacrifices both countries have made in conflicts over the years. Flanked by his foreign affairs and finance ministers, a somber Trudeau reminded the press of the longstanding bilateral relationship.

“From the beaches of Normandy to the mountains of the Korean Peninsula, from the fields of Flanders to the streets of Kandahar, we have fought and died alongside you during your darkest hours,” Trudeau said. “We’ve built the most successful economic, military, and security partnership the world has ever seen.”

Despite the political pressure at home, Trudeau reiterated that Canada would not back down in the face of these new tariffs.

“We didn’t ask for this, but we will not back down,” he said, urging Canadians to support their own economy by buying Canadian products and vacationing at home rather than traveling to the U.S.

Non-Tariff Measures on the Table

In addition to the tariffs, the Canadian government is exploring a range of non-tariff measures aimed at mitigating the economic impact of U.S. actions. These may include leveraging Canada’s critical minerals and energy resources, as well as examining other strategic partnerships that could help shift the balance of power in future negotiations.

Trudeau has emphasised that energy imports will likely be a target for additional non-tariff measures. Given the deep interconnection between Canada’s energy sector and the U.S. economy, these resources could become a significant bargaining chip in ongoing trade talks.

The Path Forward

With the full implementation of retaliatory tariffs set to unfold in the coming weeks, both Canada and the U.S. face an uncertain economic and diplomatic future. As the world’s two largest trading partners move toward a full-scale trade war, global markets will be closely watching how both nations navigate this escalating conflict.

For now, Trudeau’s government is working to protect Canadian workers and industries while ensuring that Canadian interests are defended. The Prime Minister’s message to U.S. consumers is clear: the effects of this trade war will not only be felt in Canada, but also in the U.S., where jobs and prices could be at risk.

As Canada braces for the impact of these new tariffs, the international community will be watching closely to see if diplomatic efforts can quell the growing trade tensions or if they will continue to spiral.