Trump confirms he will impose 25% tariff on Canadian goods Tuesday
'No room left for Mexico or Canada' to make a deal, Trump says
U.S. President Donald Trump says his long-threatened trade war is going ahead with tariffs on Canadian goods set to take effect just after midnight and there's nothing Canada can do to stop them.
Speaking to reporters at the White House, Trump said the United States has been "a laughingstock for years and years" and he needs to take trade action against its continental neighbours.
The president said he wants to punish Canada for a supposedly lax approach to drugs and migrants even though data shows a border crackdown is already producing results.
"Very importantly, tomorrow, tariffs, 25 per cent on Canada and 25 per cent on Mexico, and that will start. So, they're gonna have to have a tariff," Trump said.
Asked if there's anything Canada can do to try and hold off the tariffs, Trump said: "No room left for Mexico or Canada. They're all set, they go into effect tomorrow."
Trump said Canada has allowed fentanyl to flood into the U.S. despite his government's own data that shows that claim is grossly overstated. About 19.5 kilograms was seized at the northern border last year compared to 9,570 kilograms at the southwestern one.
"It comes in from Canada and it comes in from Mexico, and that's an important thing to say," he said.
Foreign Affairs Minister Mélanie Joly said Canada has a package of retaliatory measures ready to hit back at Trump right away.
"We are ready with $155 billion worth of tariffs and we are ready with the first tranche of tariffs, which is $30 billion, which has already been announced," Joly said, referring to countermeasures that were first released when Trump floated his tariff threat last month.
Joly said she will be meeting with her cabinet colleagues this evening to discuss the country's next steps as it stares down the possibility of economic ruin.
"We know this is an existential threat to us. There are thousands of jobs in Canada at stake. Now, we've done the work, we are ready, should the U.S. decide to launch their trade war," Joly said.
Ontario Premier Doug Ford said he's willing to do whatever it takes to get Trump to back down.
"If they want to try to annihilate Ontario, I will do anything — including cutting off their energy — with a smile on my face," Ford said during his first news conference since winning a landslide victory in a provincial election last week.
"They need to feel the pain. They want to come at us? We've got to go back twice as hard," Ford said.
Moments after Trump confirmed the tariffs will go ahead, the major stock indexes in Canada and the U.S. plunged — a sign that rattled investors thought Trump might back away from some of his trade threats given just how damaging these levies could be to the American economy.
Trump's tariffs also effectively leave the Canada-U.S.-Mexico Agreement (CUSMA) in tatters, ending decades of free trade in North America.
Trade conflict with 'severe' consequences: Bank of Canada
Economists have said a tariff this large could plunge the economy into a recession.
In a speech late last month, Bank of Canada Governor Tiff Macklem warned "the economic consequences of a protracted trade conflict would be severe."
"In the pandemic, we had a steep recession followed by a rapid recovery as the economy reopened. This time, if tariffs are long-lasting and broad-based, there won't be a bounce-back," he said. "It's more than a shock — it's a structural change."
The tariff will make some Canadian goods less competitive because American importers will have to pay the 25 per cent levy to bring them into the U.S.
Those added costs could then be passed on to American consumers, pushing up the price of everything from car parts and fertilizer to pharmaceuticals and paper products.
Some importers may decide to drop certain Canadian products altogether, putting pressure on Canadian businesses and the people they employ.
"Open trade between Canada and the United States has benefited both countries, increasing efficiency, spurring investment, boosting productivity and raising standards of living. A significant increase in tariffs will kick all this into reverse," Macklem said.
Matthew Holmes, executive vice-president and chief of policy at the Canadian Chamber of Commerce, said Trump has already done immeasurable damage to the bilateral trading relationship with his "drip-drip-drip of tariff threats."
"We will have a long road back to Canada and the U.S. being trusted economic partners again," Holmes said.
"The United States and Canada's economic partnership is the envy of the world and brings massive benefits to families and workers in both countries. Every day without tariffs is $3.6 billion in economic wins. But every day with tariff threats makes us weaker as allies," he said.
Trump has presided over a chaotic trade agenda with even his own senior adviser, Commerce Secretary Howard Lutnick, saying earlier Monday he wasn't sure what the president would ultimately do with Canada.
Some of Trump's planned tariffs are earmarked to cajole countries to take action on certain issues, like drugs and migrants, while others, including ones promised for March 12, are designed to torpedo the Canadian steel and aluminum industries to bring production back to the U.S.
Trump has also asked the Commerce Department to do a total review of the country's trading relationships and report back by April 1 — a study that could prompt another layer of tariffs on countries that Trump perceives as ripping off the U.S.
Canada has been racing to show the Americans that it takes Trump's border-related concerns seriously.
The federal government's efforts have produced results with the number of intercepted illegal migrants dropping by some 90 per cent in the last few months alone.
Despite Trump's claims, data from the U.S. Customs and Border Protection (CBP) released earlier this month shows there has also been a significant decrease in seizures of fentanyl coming from Canada.
The CBP's own data registered a 97 per cent drop in January compared to December 2024 at the northern border — evidence, the Canadian government says, that its $1.3-billion border security package is already bearing fruit.
The Canada Border Services Agency (CBSA) reported on Thursday that it and its law enforcement partners have made significant seizures at the border as part of "Operation Blizzard," pulling in fentanyl and fentanyl pills, including busting two U.S. citizens at the Windsor-Detroit Tunnel earlier this month who were carrying enough of the deadly drug to kill an estimated 10,000 people.
Even before these new efforts, Canada represented less than one per cent of all seized fentanyl imports into the U.S., according to federal data.
Some prominent American voices are already speaking out against the president's trade action, including legendary investor Warren Buffett.
Buffett, who at 94 still runs conglomerate Berkshire Hathaway, said it's American consumers who will ultimately pay the price of Trump's tariffs.
"We've had a lot of experience with [tariffs]. They're an act of war, to some degree," he said in an interview with CBS News over the weekend.
"Over time, they're a tax on goods. I mean, the tooth fairy doesn't pay 'em," Buffett said. "And then what? You always have to ask that question in economics. You always say, 'And then what?'"
ABOUT THE AUTHOR
