The United States of America and Canada have had a significant impact on each other’s history, culture, and economy. Both countries consider themselves the closest of allies of each other, they share the longest border of 8891 Kilometers and both have significant military interoperability. Both nations have considered themselves as one of their respective favorite nations. Still, the relationship between the US and Canada has had its complexities from time to time. Things do not seem to be running smoothly after President Trump took charge for the second time on January 20th.

Trump during his election campaign announced that his priority is to make America great again. It is therefore being assumed by political pundits that the next four years of Trump 2.0 will remain crucial for countries like Canada, China and Mexico

Trump during his election campaign announced that his priority is to make America great again. It is therefore being assumed by political pundits that the next four years of Trump 2.0 will remain crucial for countries like Canada, China and Mexico. As per the Canadian official statement, for the first nine months of 2024, the trade between the US and Canada was CA$800 billion (US$550 billion); however, in November 2024, the US government has stated that there has occurred a deficit in trade with Canada worth US$55 during November 2024.

This trade deficit is based on American demand for Canadian oil. Roughly, it is estimated that the USA imports 60% of oil from Canada, and for this reason Canada is known as the largest supplier of U.S. energy, ever since the Russian-Ukraine conflict started. Energy prices have risen since the Russian invasion of Ukraine in 2022.  President Trump in a statement on March 3, 2025, imposed a steep tariff of 25% on Canadian and Mexican goods. He also warned the U.S. automakers to produce their products and grant them a month’s exemption. This means that Trump has announced a trade battle in the first month of office as US President.

Canada is the third country after China and Mexico that suffers the financial burden generated after the newly elected president Trump’s statement

The American government has also increased its tariff tax from 10% to 20% on Chinese products in America. Most people are unaware of what a Tariff is and how it is levied. For their benefit, Tariffs are those taxes, that are charged on goods by the host countries on imported items from other countries.  Canada is the third country after China and Mexico that suffers the financial burden generated after the newly elected president Trump’s statement regarding Tariffs. In a report, Candace Laing, who is the CEO of the Canadian Chamber of Commerce, has retaliated by saying that this is an incredibly destructive statement by the U.S. Government since it has imposed a heavy tariff of 50% on Steel and Aluminum. Laing has also said that this economic chaos must end because the stock market volatility is a glaring signal for both America and Canada.

The scholars of international politics view Trump’s initial foreign policy moves as rattling many countries across the globe. It is also assumed that the U.S. will not only aggressively pursue its interests in trade and tariffs, but will resist pro-climate policies and its opposition to immigration etc.  The policymakers of America are pursuing their interests with expansionist and transactional policies and Trump’s foreign policies are broadly focusing on an interest-centric approach.

Trump also announced a 50% tariff on steel and aluminum from Canada. Soon after his statement, the Canadian government backed off its plan for a 25% surcharge on electricity.  The White House then announced that only 25% tariffs on steel and aluminum products would take effect with no exemptions.  Mr. Trump has always used the leverage of the American economy which he in his campaign repeatedly raised by saying that “I will make the American economy the best and biggest in the world.”

After the White House announcement on tariffs, many Canadians have boycotted the US products in Canada and stressed upon their government to reduce its economic dependence on the U.S

Mark Carney who will replace Justin Trudeau in the coming days has said that Trump’s decisions will not only bring financial devastation to the US but will also harm Canadian workers, families, and businesses.  He also expressed a firm resolve that his government will keep tariffs in place until America commits to free trade and shows some respect for Canada. Canadian officials are struggling with retaliatory tariffs in response to Trump’s recent announcement. After the White House announcement on tariffs, many Canadians have boycotted the US products in Canada and stressed upon their government to reduce its economic dependence on the U.S.

It is the responsibility of both governments to come together and negotiate a resolution for the U.S. tariffs on Canadian products to prevent this economic conflict

It is said that Carney will soon respond to the American government and will also apply tariff charges on American products such as appliances, orange juices, peanut butter, cosmetics, footwear and motorcycles and certain pulp and paper products. The Canadian government has planned to impose tariff charges worth $30 billion Canadian (US$21 billion) until Trump does not show respect for its country. Therefore, it is the responsibility of both governments to come together and negotiate a resolution for the U.S. tariffs on Canadian products to prevent this economic conflict.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.