USA vs Canada: why the “customs war” started between the countries and what you need to know about it
4 March 21:11
The United States and Canada have entered a new phase of the trade war: Washington is ready to increase duties for Canada if Ottawa imposes them on American goods. US President Donald Trump wrote about this on March 4 on his Truth Social page, Komersant ukrainskyi reports.
“Please explain to Canadian Governor Trudeau that if he imposes retaliatory tariffs on the United States, our mutual tariff will immediately increase by the same amount,” the American leader warned.
This was Donald Trump’s response to Canadian Prime Minister Justin Trudeau ‘s statement that the United States had launched a trade war against Canada. After all, on March 4, US punitive duties on Canada and Mexico came into effect. Now imports from these countries are subject to a 25% tax, and a 10% duty is imposed on energy products from Canada.
On the same day, the Premier of the Canadian province of Ontario, Doug Ford, announced at a briefing the anti-American measures he would take in response to the duties imposed by the United States on Canadian goods:
- All American companies will be banned from public procurement.
- The province terminates the contract with Elon Musk’s Starlink.
- If the tariffs are maintained, Ontario will immediately apply a 25% surcharge to electricity exported to New York, Michigan, and Minnesota.
- Ontario will impose a 25% tax on electricity exports to the United States.
Trade war between Canada and the United States: what you need to know
In early 2025, the escalation of trade tensions between the United States and Canada culminated in the imposition of significant tariffs on each other’s goods, marking a significant change in North American trade relations.
US tariffs on Canadian imports
on February 1, 2025, President Donald Trump declared a national security emergency under the International Emergency Economic Powers Act and the National Emergencies Act, announcing the imposition of 25% tariffs on all Canadian imports, including a 10% tariff on Canadian crude oil and energy products. The administration explained these measures as necessary to combat illegal immigration, the flow of fentanyl, and to reduce the US trade deficit.
Canada’s response
In response, Canadian Prime Minister Justin Trudeau condemned the US tariffs as “unjustified” and immediately announced retaliatory measures. Canada imposed a 25% tariff on 30 billion Canadian dollars (approximately 20.7 billion US dollars) worth of American goods, including products such as orange juice, peanut butter, wine, spirits, beer, coffee, household appliances, clothing, footwear, motorcycles, cosmetics, and pulp and paper products. Trudeau emphasized that these measures are necessary to protect Canadian interests and will remain in effect until the US lifts its trade actions.
Economic consequences
The mutual introduction of tariffs has raised concerns about the potential economic consequences for both countries. Experts predict an increase in consumer prices, disruptions in supply chains, and potential job losses in industries that depend on cross-border trade. The tariffs have also led to instability in financial markets, with major indices such as the S&P 500 and Dow Jones experiencing significant declines amid fears of a broader trade war.
