Canada will impose 25% tariffs on select U.S. goods in response to U.S. tariffs on Canadian imports. Economists warn of severe economic impacts, including a potential recession and job losses. The trade war threatens supply chains, particularly for critical minerals, and raises concerns about national security.
Shipping containers at the Port of Montreal on Feb. 2. Canada will hit back at U.S. tariffs with 25 per cent levies of its own on select American goods, Prime Minister Justin Trudeau said on Feb. 1.With the worst shock to global trade in nearly a century expected to plunge Canada ’s economy into recession this year, companies are scrambling to overhaul their business models, while consumers are being warned to expect higher prices on some food items starting this week.
The hit to Canada’s economy from these measures will be severe, and if the tariffs and counter tariffs stay in place, they “could wipe out Canadian growth for up to three years, with the largest impacts in the first and second years,” economists Frances Donald and Nathan Janzen at Royal Bank of Canada warned in a report Sunday.
“The worker is the one who will suffer as a result of this,” Mr. Dutil said. Canam employs about 5,100 people. Canada is by far the largest foreign supplier of crude oil to the U.S., accounting for 60 per cent of imports, and Midwestern refineries are directly connected by pipeline and configured to process the heavier Canadian supply. There is no way the U.S. could quickly and efficiently drill for its own heavy crude to replace that supply if the intent is to discourage imports, Mr. Johnston said.
“We urge the federal government to recognize the contributions our sector makes to other regions of the country and to avoid worsening the situation by restricting energy trade or imposing export tariffs on Canadian energy to the U.S.,” Pathways Alliance president Kendall Dilling said in a statement.
Canola growers, who shipped $8.6-billion of canola oil to the U.S. in 2023, warned that the impact on the industry would be harsh. That includes “doubling down” on sourcing food made in Canada and, for products where there is no Canadian source, looking at suppliers in Mexico as an alternative to U.S. products.
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