On February 3, 2025, U.S. President Donald Trump's across-the-board tariffs of 25 per cent on Canadian goods, announced two days earlier, were postponed for 30 days after Washington and Ottawa came to a deal that would see Canada bolster surveillance at the border against organized crime, fentanyl, and money laundering.
On March 4, despite these border actions and other diplomatic efforts, Trump followed through on his threat and imposed a punishing 25 per cent tariff on all Canadian goods, with a lower rate for Canadian energy. Canada responded with counter-tariffs that initially target C$30 billion worth of American goods.
As of March 4, Mexico (at 25%) and China (at 20%) – America’s second and third largest trade partners, respectively, after Canada – were are also facing a fresh barrage of U.S. tariffs.
On March 5, Trump granted a one-month exemption on Canadian imports for U.S. automakers to allow the U.S. domestic sector to prepare for the new taxes.
Despite this temporary relief for the auto sector, and continuing hints of ‘de-escalation’ and ‘adjustments’ from within the ranks of the U.S. administration, Canada is now engaged in a trade war with the United States, its long-time ally and largest bilateral trade partner.
On March 6, injecting more uncertainty into the already volatile mix, President Trump paused his tariffs on some Canadian (and Mexican) goods – only those exports that are "compliant" with the Canada-United States-Mexico Agreement (CUSMA) – until April 2.
In the case of Canada and Mexico, Trump's tariffs violate the continental trade agreement CUSMA, that the president himself negotiated in 2020.
Consumers and businesses across Canada – and increasingly, the U.S. – are now alive to the reality of a full-blown trade war and the impacts on industry and consumption.
Meanwhile, it is unclear if these current tensions will be limited to trade or spill over into other areas, including foreign policy and defence and security arrangements.
In this special spotlight on Trump's trade war and implications for Canada — and Asia, and U.S.-Asia and Canada-Asia relations — the Asia Pacific Foundation of Canada presents analysis and commentary on this existential threat to our economy and sovereignty through the publications, podcasts, video presentations, and guest contributions you will find collected below.
Editor’s note: This original February 6, 2025 post has been updated to reflect developments to March 10, 2025.
Main photo: Chip Somodevilla/Getty Images
