Donald Trump is committed to placing 25% tariffs on Canadian and Mexican imports as of March 4th, 2025.
At a White House press conference on Feb. 24th, he stated “The tariffs are going forward on time, on schedule,” citing that other countries have abused the US for “many, many years”.
“Our country will be extremely liquid and rich again,” Trump claimed.
Tariffs vs the border
The tariffs were a theme of Trump’s presidential campaign, misleading US voters by stating the taxes were “not going to be a cost to you, it’s a cost to another country”.
Due to his theatrics and weaponization of unpredictability, many were skeptical of the probability of his claims. However, on Feb. 1st, 2025, Trump signed an executive order to carry out the tariffs.
Oil and gas industry leaders hoped and believed energy would be exempt yet Trump assured us that a 10% tariff would apply.
The tariffs were paused for 30 days after negotiations with Canadian Prime Minister Justin Trudeau and Mexico’s President Claudia Sheinbaum.
Both Trudeau and Sheinbaum agreed to implement stronger security measures at each country’s respective borders to stunt illegal immigration, drug trafficking and the infiltration of dangerous criminals or gangs.
Canada and Mexico also started planning retaliatory tariffs against the US should Trump follow through.
Despite tremendous efforts made to accommodate, Trump has expressed that it’s simply not enough and that the US have been made fools of for too long.
Is Canada in crisis mode?
Economists and financial experts widely agree that the tariffs could damage the Canadian economy by triggering a recession, leading to severe industry disruption.
The high cost of living is already a contentious and pressing problem in Canada.
Many Canadian businesses and goods could become less competitive as US importers will be required to pay the costly 25% levy.
The Bank of Canada asserts that Canada’s trade balance could worsen with the tariffs. Lower net export volumes and weaker terms of trade compromise the Canadian dollar.
Weaker export activity and pricier imported investment goods from the US can also significantly decrease Canadian business investments (BoC).
In the grand scheme of things, the demand for Canadian goods could plummet on a global level. Lower global demand affects commodity prices, including the price of oil — an obvious threat to Canada.
A decrease in demand can also mean less work, fewer job opportunities and layoffs. Of course, this spills over into other industries unrelated to trade, like housing and hospitality.
Conditions in the US
The US Chamber of Commerce warned that the tariffs won’t resolve long-enduring issues at the borders.
Rather, supply chains could be upended, prices will increase and American families then become destablizied (even more than many already are).
“Consumers are going to be clearly worse off,” Sung Won Sohn, professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, told CNN.
He added “When you talk about a tariff, it’s an economic war; and in war, everybody loses. But hopefully, we will come to some better results and conclusions as a result of the pain and suffering that we will go through.”
Pro-tariff perspectives
Despite this, many stand firmly beside Trump, believing short-term pain will lead to long-term gain.
They trust that the tariffs, in combination with Trump’s other orders, will ultimately enhance their quality of life.
Trump emphasizes how the tariffs can bolster domestic industries and “defend” the US economy from foreign competition. Taxing imports allows Americans to buy domestically produced goods, which may preserve and create new jobs (EV Magazine).
The job market could also benefit from increased domestic manufacturing. As a result of the tariffs, American businesses could save money by keeping operations within the country. As a result, the supply chain is strengthened and national security is emboldened.
The tariffs may create a short-term economic boost by providing extra revenue for the US government. How this revenue could be or will be used is highly debatable.
One of the greatest concerns across North America is being faced with higher consumer prices. Everything from avocados and chicken to laptops and phones could rocket in price.
What is your perspective on the tariffs? Is this just another curveball that will hit a dead end or is this the real deal?
