Canada and the U.S. Are in a Trade War — and Their Old Friendship May Never Be the Same

For many years, Canada and the United States were among the closest trading partners in the world. After trade talks fell apart, the U.S. placed 50% tariffs on about $20 billion worth of Canadian goods. Canada fired back with matching tariffs of its own. Prime Minister Mark Carney said the two countries would 'not return to our old relationship.'

President Trump has pushed hard on Canada in several ways. He questioned whether Canada can survive as its own country, suggested it become the 51st U.S. state, and used tariffs to push for more production inside the U.S. These moves have angered many Canadians, who had long seen Americans as their closest allies. Travel from Canada to the U.S. fell sharply, with car trips down nearly 29% and air travel down 27% compared to the year before.

Nearly three-quarters of everything Canada sells abroad goes to the United States. This makes Canada very dependent on its neighbor. The U.S. economy is about 10 times bigger than Canada's, so Canada must be careful about how hard it retaliates. Hitting back too hard could hurt Canadian workers and businesses just as much as it hurts the U.S.

Canada does have some leverage, though. It supplies about two-thirds of the crude oil the U.S. imports, making Canadian energy critical to American homes and factories. Trump's tariffs have focused on cars, steel, and aluminum — sectors where he wants more jobs in the U.S. Many Canadians see this as an effort to weaken key parts of their economy.

Leaders across Canada have rallied behind a tough response. Ontario Premier Doug Ford said he fully supported retaliation 'tariff for tariff, dollar for dollar.' Saskatchewan Premier Scott Moe said 'the old status quo is not possible.' Even former Alberta Premier Jason Kenney, a conservative, praised Canada for standing firm and not giving in to pressure.

Canada's business community says the shift could be permanent. Goldy Hyder of the Business Council of Canada warned that new trade rules could stay in place even after Trump leaves office. 'There is a new trade and investment model, one that could well be kept in place by future U.S. administrations, whether Democrat or Republican,' he said. This means the old, open trade relationship may be gone for good.

Canada is now working to find new trading partners around the world. Prime Minister Carney is traveling abroad to attract investment and sign new trade deals. His goal is to bring in roughly $730 billion U.S. dollars by 2030 and to double non-U.S. trade over the next decade. Canada also moved forward with a new Pacific Coast oil pipeline to reach buyers in Asia.

Political experts say this change is likely to last well beyond Trump's presidency. Daniel Béland, a professor at McGill University, said the countries are at 'the beginning of a full-scale trade war.' He warned that U.S. protectionism will probably remain strong under future presidents too. 'Things will never be the same,' Béland said, even if the relationship improves someday.