Canadian officials are reportedly in talks with Donald Trump’s inner circle about what trade policy would look like between the countries under a second Trump administration.
Catch-up: As part of his 2024 re-election campaign, Trump has proposed a universal 10% tariff on all imports and 60% on imports from China. He said the move will protect American jobs and raise money to pay for tax cuts, but some experts say it will lead to higher prices.
- There is reportedly no guarantee that Canada would be exempt from the tariffs, and the trade agreement with the U.S. and Mexico (the USMCA) is up for review in 2026.
Why it matters: In 2023, half of Canada’s merchandise imports came from the U.S., while 77% of exports were sent there. A universal tariff, which Canada could match in retaliation, would raise prices for Canadians and deal a blow to businesses with U.S. customers.
Yes, but: Since nearly 14% of U.S. imports come from Canada and 17% of U.S. exports are sold in Canada, Canada could try to work any new trade policy in its favour with concessions on other points of trade tension, like dairy policies and the new digital services tax.—TS, SB