As a non-economist, I have found the constant on-again off-again tariff battles of the last seven months to be very confusing.
But it seems like Trump's so-called tariff strategy has finally reached deadline velocity, and his tariffs are finally all happening. Mostly.
The Toronto Star is tracking what’s active, what’s coming and how Canada has responded
The Toronto Star is tracking what’s active, what’s coming and how Canada has responded
It’s a complex, tangled picture. Here’s a look at what tariffs are currently in place and why, what more is being threatened, and how Canada has reacted to the trade war so far:It still makes my brain hurt to try to understand this.
Active U.S. tariffs against Canada
• 50 per cent tariff on steel and aluminum imports into the U.S., because of an alleged threat to American security. This tariff originally came in at 25 per cent on March 12, but Trump increased it to 50 per cent on June 4.
• 25 per cent tariff on auto parts imported into the U.S. kicked in May 3, except for those that comply with the 2018 Canada-United States-Mexico Agreement (CUSMA), the current North American free trade deal. Trump also imposed a 25 per cent tariff on all cars and light trucks not made in the U.S., including from Canada, which took effect April 3. Trump justified the tariffs again for national security reasons.
• 35 per cent tariff on Canadian goods that don’t comply with CUSMA, and a 10 per cent tariff on energy products from Canada, which was first announced in February and came into effect March 4 at a lower 25 per cent rate on goods. On Aug. 1 the U.S. hiked goods tariffs to 35 per cent. Trump has tied these so-called border tariffs to claims of a national emergency over fentanyl and migrants crossing the U.S. border illegally from Canada. On March 7, Canada won an exemption to these tariffs for all goods that comply with CUSMA. RBC Economics estimated in an April report that, because of this exemption, about 86 per cent of Canadian exports could still cross the border without tariffs.
• 20.56 per cent tariffs on Canadian softwood lumber, over alleged “dumping” of cheaper products into the U.S. market. The Trump administration increased the tariff in late July from 7.66 per cent.
• 50 per cent tariff on some copper imports as of Aug. 1.
Retaliatory Canadian tariffs
• 25 per cent tariffs on $29.8 billion worth of steel and aluminum products from the U.S., implemented March 13 in response to Trump’s tariffs on the same goods from Canada.
• 25 per cent tariff on fully assembled vehicles that don’t comply with CUSMA since they are made with less than 75 per cent North American content. This counter-tariff took effect April 9. Components of compliant cars that aren’t made in Canada or Mexico are subject to the 25 per cent tariff. The tariff targets about $35 billion worth of American vehicles brought into Canada.
Other Canadian actions
• Canada abandoned its long-planned Digital Services Tax on June 29, after Trump said he would walk away from trade talks over the tax that would hit American online giants.
• Canada removed its 25 per cent retaliatory tariffs on American goods that comply with CUSMA, effective Sept. 1. The measure was initially implemented March 4 in response to Trump’s border tariffs.
Threatened U.S. tariffs
• Trump has threatened a “very high” tariff on pharmaceutical imports, possibly as high as 200 per cent.
• The U.S. is considering tariffs on semiconductors and critical minerals as part of national security reviews.
Trump's tariffs causes SSENSE to file for bankruptcy protection. Devastating to small designers, as SSENSE is an important retailer for them.
— derek guy (@dieworkwear.bsky.social) August 28, 2025 at 2:09 PM
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aaaaand -now we have Crown Royal pulling up stakes in Windsor and moving its bottling co. to US - more to sell there, and no tariffs, according to them But, Crown Royal is owned by Diageo now, a global spirits company. So time to boycott Crown Royal - NOT a Cdn co. and not standing with Canada
— BevBaird (@bevbaird.bsky.social) August 28, 2025 at 5:38 PM
CTV reports our trade deficit grew substantially in the spring quarter. Stats Canada says Canada had a $19.5 billion deficit in goods and services trade in the spring quarter, up from just $800 million in the winter quarter. A trade deficit means we are importing more goods than we are exporting.
“We’re exporting substantially less stuff to our major trade partner,” said Moshe Lander of Concordia University’s economics department. “So, the fact that the trade deficit is getting bigger is not at all surprising.”The Globe and Mail thinks Carney should be giving us doom and gloom speechifying instead of hockey metaphors:
“Canada is an export-based economy. We are huge exporters … Even though the deficit is 20 some odd billion dollars, let’s not forget that we’re exporting about half a trillion dollars’ worth of stuff. It just means that we’re importing close to half a trillion dollars’ worth of stuff as well.”
...Goods exports to countries other than the U.S. also dropped, though more gently, from $31.8 billion in the first quarter to $29.6 billion in the second quarter.
Growing Canada’s footprint in the global marketplace has been a cornerstone of Prime Minister Mark Carney’s plan to weather a changing commercial relationship with the States.
....Canada has been largely shielded from the effects of Trump’s tariffs because of its free trade agreement with the United States, which Carney has cited when telling reporters this country has the “best trade deal” of any U.S. trade partner.
But that agreement is up for review next year. By Lander’s account, Canada does not appear to have sufficient leverage to come out of negotiations unscathed.
“He’s got a large brain. He (Carney) knows he’s the smartest person in the room,” said Lander. “And so, try and use those skills to negotiate at least to the best settlement that Canada can get, even if it’s not to the settlement that we had eight months ago when we were under free trade with the Americans.”
Prime Minister Mark Carney caught a lot people off-guard last week when he said Canada was eliminating some of its retaliatory tariffs on U.S. goods.Myself, I like Carney's hockey stories -- makes it hella easier to understand what is happening, how he is dealing with it, and why.
He of the “Elbows up!” campaign slogan was accused by, among others, Manitoba Premier Wab Kinew and Opposition Leader Pierre Poilievre, of lowering his metaphorical weapon of choice without getting anything in return.
The critics’ reasoning was that the move didn’t result in the U.S. dropping its high tariffs on Canadian aluminum, steel, cars and car parts. Mr. Carney had to resort to defending himself with a tortured analogy about late-period hockey tactics when the score is close and “you want the puck.”
Others argued, and we agree, that eliminating tariffs on American goods that are compliant with the rules of the United States-Mexico-Canada free trade deal, as the United States had already done for Canadian goods, was sensible.
It was a garden-variety negotiating tactic designed to restart trade talks with the U.S., and it succeeded. It will also have the beneficial effect of lowering the cost in Canada of a lot of grocery and household items as the drop in tariffs works its way through the system.
More to the point though, tariffs on things such as orange juice, kitchen cloths and imitation jewellery were never going to bring the world’s biggest economy to its senses or its knees. Anyone who thinks otherwise is probably not the right person to manage Canada’s trade negotiations. The only requirement for Canada’s negotiators is that they maintain a firm grip on the fact that this country’s reality is changing rapidly. Old assumptions are useless, and rah-rah hockey metaphors come nowhere near capturing the complexity and risk of a moment in which the governing principles of Canada’s two biggest trading partners appear to be merging.
Premier Kinew was correct when he said in June that Ottawa needs to spell out its strategy for dealing with Canada’s second-largest trading partner, China. That country’s tariffs on canola, seafood and pork, implemented in retaliation for Canada’s tariffs on Chinese electric vehicles, steel and aluminum, are hurting.
Fixing Ottawa’s strained relations with Beijing has become all the more critical because of Canada’s broken trust with the United States under President Donald Trump.
... The bottom line is that, in the not very far off future, Canada could well be a mid-size power caught between two superpowers whose economies – a tense mix of feral capitalism and command economy – will have more in common with each other than with that of any western democracy, and whose leaders are ruthlessly transactional and completely unreliable the minute their interests shift.
Navigating this will require diplomatic skill, political courage and tenacity. Policies must focus on Canada’s interests and Canada’s interests alone. It will take time to procure trade deals, and there will be setbacks when either superpower’s leadership decides to flex its muscles. There will be few consistent rules, if any, for Ottawa to follow.
This is no game, in other words. Metaphors about the angle of an elbow relative to the playing surface are too smug by half. Canadians and their leaders need to talk about the emerging world order in a serious and adult manner. The puck stops here.
Good coaches always have a plan, even if they don’t explain it to you. PM Carney has a plan. He is planning into next yeah, when CUSMA can be re-negotiated. Stay strong, stay smart. Keep buying Canadian, boycott American. IT’S WORKING.
— Breanne 🇨🇦 💜🇺🇦🏳️🌈🏳️⚧️🇵🇸💜 - part Owner of Canada (@breannewieler.bsky.social) August 23, 2025 at 10:53 AM
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But as the tariffs affect the world economy, I think Canada will be on our own.
Trump's inconsistent and nonsensical tariff policies are crazy, and it means the world, and the United States, will find themselves in a shitstorm of delays and work-arounds and chaos.
Trump's inconsistent and nonsensical tariff policies are crazy, and it means the world, and the United States, will find themselves in a shitstorm of delays and work-arounds and chaos.
American bureaucrats and tariff negotiators will have much more to worry about than whether Canada wants to restart trade negotiations. The ineptitude in US tariff decisions will lead to industrial chaos, like this:
Thanks to tariffs (especially re: Canada), US aluminium prices are now roughly 50% higher than in Europe & Japan, thus putting US manufacturers at a competitive disadvantage. Heckuva industrial strategy.
— Paul Graf (@paulginva.bsky.social) August 28, 2025 at 11:10 AM
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As well as slamming tariffs on every country in the world, Trump also decided to end the small package tariff exemption. This will delay the handling of billions of parcels, and the postal services of many countries have decided not to send parcels to the States anymore:
And Trump is going to be under tremendous pressure now to change it back - he'll likely do it if people are sufficiently obsequious:
Trump Administration Ends Duty-Free Exemption on Small Imports — Starting Friday, the Trump administration ended the tariff exemption for low-value packages entering the US, imposing duties on millions of small shipments. This move is set to impact consumers and international shipping…
— RawDiary (@rawdiary.com) August 28, 2025 at 11:02 PM
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Americans are going to be PISSED when they can't get anything sent from overseas:Watching my overseas packages arrive like they got off the last chopper into Vietnam
— SwiftOnSecurity (@swiftonsecurity.com) August 26, 2025 at 1:45 PM
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And Trump is going to be under tremendous pressure now to change it back - he'll likely do it if people are sufficiently obsequious:
But its definitely hurting us too:[slightly higher pitched voice] Sir, please, make it harder for me to get packages. Please sir, we love you,
— Patrick Monahan (@pattymo.com) August 28, 2025 at 2:26 PM
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4 comments:
Watching tRump lead his country down the shithole ....
This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.
Yes indeed, The Wasteland is happening isn't it.
They have gone crazy and they're taking us with them.
In the long run, maybe we can replace all this trade with other trade. But that could take a long time, so if that's all we do we could be seeing major recessions, falling employment, reduced economic activity that could spiral as consumer demand drops. Bad stuff.
Ideally, what we need is for the government to act as employer of last resort. Actually hire people to directly accomplish all those nation-building things Carney was talking about. Ideally it would also involve NOT adding to the unemployment by sacking huge numbers from the civil service, Trump-style. We need the opposite of austerity, we need Keynesianism.
All this would require spending a good deal of money, and not offsetting the stimulus with cuts elsewhere. That in turn requires either a tolerance of deficits, or taxing the rich. Let me know if Carney signals a willingness to do what's needed.
In the mean while, one place we could quickly increase trade would be by not having a trade war with China. Either that, or AT LEAST use the threat of Canadian rapprochement with China as a bargaining chip with the US, which would really prefer we stay in the anti-China camp.
Yes I definitely think we need to drop the tariffs on China - right now they are stupid and costing us millions. And Trump would be mad but so what, he will just move on anyway
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