US-Canada Trade War

The US-Canada trade war is being felt on both sides of the border, with tensions simmering between the two neighbors since President Donald Trump returned to the White House just over 18 months ago.

Canada was one of the first countries hit with levies, and is one of two countries to respond with its own reciprocal measures.

Currently, the US has hit Canada's key sectors of steel, aluminum, lumber, and automobiles with tariffs, and last week imposed an additional 50% levy on about $28 billion ($20 billion; £15 billion) of Canadian goods.

Canada has hit back with its own counter-tariffs on American goods, announcing a 'dollar-for-dollar' and 'strategic' retaliation designed to match the US tariffs.

The tariffs have hit some states and provinces harder than others, with Ontario being particularly hard hit by auto and steel tariffs.

Some provinces, such as Quebec, are estimated to have lost tens of thousands of manufacturing jobs since early 2025 due to the tariffs.

The Royal Bank of Canada estimates that Ontario and Quebec are the most impacted by US sectoral tariffs, while Newfoundland and Labrador, New Brunswick, Alberta, Saskatchewan, and Prince Edward Island are the least exposed.

Canada's economy is still recovering from the impact of the trade war, with some businesses adapting to find customers elsewhere in Europe.

The Canadian Chamber of Commerce has pointed out that three regions in Ontario remain heavily tied to the US market, while growth in exports outside the US has been limited or insufficient to offset broader weakness in trade activity and local economic conditions.

According to Bank of Canada data, some businesses are adapting to find customers elsewhere, with Toronto-based menswear clothing company Outclass starting to attend trunk shows in Paris instead of New York.

The US-based Tax Foundation estimates that an American household could pay $840 more on average this year due to Trump's tariffs on a