Key Takeaways
- The Canada-U.S. relationship has significantly deteriorated over the past year due to trade provocations and bilateral blow-ups.
- Trump’s tariff threats and "America First" trade policy have hit Canada hard, with tariffs on Canadian imports and separate Section 232 tariffs on specific industries.
- The relationship between Canada and the U.S. has been frozen, with no clear progress on trade deals and talks remaining stalled.
- The past year has felt like an existential crisis for many Canadians, with an extended and numbing assault on the country’s sovereignty and stability.
- The Trump administration has crossed several red lines, including democratic decline, ignoring constitutional limits on presidential power, and targeting law firms and universities.
Introduction to the Canada-U.S. Trade Relationship
The Canada-U.S. relationship has undergone a significant transformation over the past year, marked by a series of trade provocations and bilateral blow-ups. The unusually chilly Washington evening in January 2025, where people anxiously sipped hot chocolate in the Canadian Embassy, foreshadowed the freeze in the relationship between the two countries. Trump’s tariff threats and talk of annexing Canada had already rattled Canadian politics, and a rushed trip to Mar-a-Lago in early November 2024 failed to mend the already rocky relationship between former prime minister Justin Trudeau and the incoming U.S. president.
The Impact of Trump’s Trade Policy on Canada
On January 20, 2025, Trump announced his "America First" trade policy, which included sweeping tariffs on Canadian imports. The tariffs, which do not apply to goods compliant with the Canada-U.S.-Mexico Agreement on trade (CUSMA), hit Canada in March 2025. The tariffs were later boosted to 35% in August 2025, as Trump complained about Canada’s retaliatory tariffs and supply management in the dairy sector. The president’s separate Section 232 tariffs on specific industries, such as steel, aluminum, automobiles, copper, and lumber, have also had a significant impact on Canada. The speed and scale of Trump’s trade war with the world caught everyone off guard, according to Fen Osler Hampson, a professor of international affairs at Carleton University in Ottawa.
The Response of the Canadian Government
The Canadian government, under the leadership of Mark Carney, has attempted to navigate the complex trade relationship with the U.S. Carney suspended Canada’s digital sales tax, tightened border security, dropped most retaliatory tariffs, and boosted defense spending in an unsuccessful effort to get Trump to drop his tariffs. Despite these efforts, talks remain stalled, and every deadline for a trade deal has come and gone with no clear progress. The relationship between Carney and Trump has been cordial, with the two leaders complementing each other and bantering for the news crews during two meetings at the White House. However, the talks were shut down in October 2025, after Trump was offended by an Ontario-sponsored TV ad quoting former U.S. president Ronald Reagan criticizing tariffs.
The Impact on Canadian Society
The past year has felt like an existential crisis for many Canadians, with an extended and numbing assault on the country’s sovereignty and stability. The shattered relationship with the U.S. has had a significant impact on Canadian society, with many Canadians feeling that their country is under attack. The situation has also highlighted the need for Canada to re-evaluate its relationship with the U.S. and to develop a more nuanced understanding of the complexities of the trade relationship. According to Matthew Lebo, a political-science professor at Western University in London, Ontario, the Trump administration has crossed several red lines, including democratic decline, ignoring constitutional limits on presidential power, and targeting law firms and universities.
The Impact on the U.S.
In contrast, the shattered relationship with Canada has had less of an impact in the U.S. Americans who support the Trump administration see it as doing what they voted for, even if it means Canada getting caught up as collateral damage. For Trump’s opponents, the president’s actions have driven a wave of alarming change, and Canadian concerns are not necessarily their priority. The Trump administration has launched a massive deportation campaign, deployed National Guard troops to Washington and other Democratic strongholds, and targeted law firms and universities to bring them in line with its agenda. The administration has also dismantled the U.S. Agency for International Development and is working to do the same to the Department of Education, resulting in the layoff of thousands of U.S. government employees.
Conclusion
The past year has been marked by a significant deterioration in the Canada-U.S. relationship, with trade provocations and bilateral blow-ups dominating the headlines. The situation has highlighted the need for Canada to re-evaluate its relationship with the U.S. and to develop a more nuanced understanding of the complexities of the trade relationship. According to Alasdair Roberts, a professor of public policy at the University of Massachusetts Amherst, the past year has been a "partial revolution" in the U.S., with the Trump administration attempting to change the regime but limited by the courts and the lack of legislative changes necessary to entrench the new way of working. Despite the rapid collapse of norms in Washington, Roberts does not believe that American democracy is in crisis, pointing to the November elections, where millions of Americans voted without controversy, and the state of U.S. federal politics, which has forced Canada to accept an uncomfortable truth: the way the United States perceives its neighbor to the north has shifted fundamentally.