*This article was written on March 4.
On March 6, Trump waived the 25 per cent tariffs on Canadian and Mexican goods covered under CUSMA, which, according to CTV News, covers 95 per cent of goods traded between Canada and the U.S.
Canada responded by delaying $125 billion in retaliatory tariffs from March 24 to April 2 but kept $30 billion in tariffs that were already in place.
On March 4, U.S. President Donald Trump followed through with his threat to impose 25 per cent tariffs on everything Canada sends south.
Trump threatened to impose tariffs on Canadian goods on Jan. 20, before pushing it to Feb. 1, then Feb. 4 and finally to March 4. In response, Prime Minister Justin Trudeau implemented 25 per cent counter-tariffs on American imports.
Lars Osberg is a professor in the department of economics at Dalhousie University. Osberg told the Dalhousie Gazette that Trump’s repeated tariff threats have produced “an unprecedented amount of economic uncertainty in Canada coming out of basically nowhere within the last few months.”
Robert Huish, an associate professor in the department of international development studies at Dalhousie, agreed with Osberg.
“We’re looking at a new era of uncertainty,” Huish said. “One that is governed by continuous threat, and we don’t know where the next one’s coming from because it’s so erratic. It’s often so ham-fisted that we’re unsure of how to make anything work in a relationship like that.”
Gabrielle Bardall, a political science professor at Dalhousie, told Dal News, “Canadian leaders are very aware that this is possibly the opening act — not the grand finale — of a potential trade war. Retaliation is likely to be highly targeted, including dollar-for-dollar counter-tariffs, changes to public procurement to prioritize Canadian producers and immediate relief measures for workers directly impacted.”
On March 3, Trudeau released a statement saying Canada will impose 25 per cent retaliatory tariffs on $155 billion of American goods. According to the statement, tariffs on $30 billion of goods will go into effect immediately and tariffs on the remaining $125 billion of goods will go into effect on March 24.
“Tariffs will disrupt an incredibly successful trading relationship. They will violate the very trade agreement that was negotiated by President Trump in his last term,” Trudeau said. “Let me be unequivocally clear – there is no justification for these actions. … Canada will not let this unjustified decision go unanswered.”
The 51st State
Trump has repeatedly made comments since his return to office about taking over Canada and making it the “51st state.”
According to CTV News, Trudeau told business leaders at a summit in Toronto on Feb. 7 that Trump’s threat to make Canada the 51st state is a “real thing” — in part as a way to gain access to Canada’s critical minerals.
Trump confirmed that he’s serious about threatening to annex Canada in a Fox News interview on Feb. 9.
“I think Canada would be much better off being a 51st state because we lose $200 billion a year with Canada, and I’m not going to let that happen,” Trump said. “It’s too much.”
Alternatives for Canada
Huish thinks there are a lot of countries in the Pacific that would benefit greatly by having more interactions and trade with Canada, particularly South Korea and Taiwan.
“I think Canada’s going to find itself in a real tough spot where we’ve got sour relations with China, soured relations with India and quite brutal relationships with the United States at the moment,” Huish said. “We’re really looking for friends because we’re suddenly moved from being perhaps one of the most geographically secure countries in the world to being one of the most vulnerable.”
Broken trust
In November 2018, Trump signed a revised and renamed version of the North American Free Trade Agreement (NAFTA) called the Canada-United States-Mexico Agreement (CUSMA).
“Does it matter that this same president signed an agreement, called it the best trade agreement ever not so many years ago, and now suddenly that’s completely forgotten?” said Osberg. “It’s not entirely clear how a world economic and political system works when the biggest dominant power has a word that can’t be trusted.”
Osberg expressed uncertainty at how much American promises are now worth to Canadians.
“This is what’s happening to somebody with whom [America] had cultural and political ties, as well as economic ties,” he said. “If that’s what happens to [their] friends, what happens to everybody else?”
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