President Donald Trump said that American industry would be “reborn” as he set off a global trade war — but Canada may have gotten off relatively lightly.
What happened: Trump sent markets tumbling when he announced a detailed list of country-specific tariffs on more than 100 trading partners — shockingly, the list did not include Canada or Mexico.
- As part of the plan, the U.S. will impose a blanket 10% tariff on all imports on April 5, with country-specific higher rates kicking in on April 9.
- Once the tariffs are fully rolled out, major U.S. trading partners will face historically high tariffs — imports from China will be subject to rates of 34%, the European Union 20%, and Japan 24%.
For Canada: Many Canadian exports to the U.S. won’t face the full brunt of the new tariff rules, as imports compliant with the Canada-U.S.-Mexico Agreement (CUSMA) will be exempt from the tariffs.
- Non-compliant imports will face a 25% tariff, except for energy and potash, which will be subject to a 10% rate.
- Aluminum, steel, and “foreign-made automobiles” will still be subject to previously announced tariffs of 25%.
Why it matters: Canada dodged the worst of Trump’s new tariffs, but will still have to contend with already-announced trade barriers that threaten key sectors of the country’s economy.
- Aside from the direct impact on Canadian exports, a global trade war that drags down markets will still hit Canadians’ portfolios and create headwinds for the economy.
What’s next: Trump has made it clear that his trade policy can change on a dime. What happens next is anyone’s guess.