The agonizing wait is over, even if the real pain is just beginning: on Wednesday, the Trump administration announced so-called “reciprocal” tariffs on a long list of countries. Early in his remarks, Trump attacked Canada’s dairy industry and supply management policy. “In many cases the friend is worse than the foe,” he said, and the words seemed to imply that America’s neighbour and core trading partner was once more in the crosshairs.
But when the list of affected countries was released, Canada wasn’t among them.
Soon after Trump’s announcement, Alberta Premier Danielle Smith claimed a (personal) win and even said she believed it appeared “the worst of this tariff dispute is behind us.” Ontario’s Doug Ford called the absence “positive,” but was less sanguine about the future.
Less sanguine is a start, but Canada really ought to be, and remain, equal parts seized of the matter, vigilant, and pessimistic. While avoiding additional tariffs should be welcomed, no one should be celebrating or downplaying the significant threats Canada faces right now, and is likely to face for the foreseeable future. And we should not forget that several major Canadian industries are already under what would in normal times be considered severe tariffs. Indeed, we under-react or take comfort in small wins at our peril.
On Thursday, Prime Minister Mark Carney wasn’t doing a victory lap after Canada was left off the added tariffs list. “The American administration should eventually change course,” he said. “But I don't want to give false hope. The President believes that what he is doing is best for the American economy.”
He knows what lies ahead. Just hours after Donald Trump left Canada off the new tariff list — a list that included most of the world’s major economies along with uninhabited Antarctic islands – 25 per cent auto tariffs came into effect. Tariffs on aluminum and steel, also at 25 per cent, remain in place. So, too, do Trump’s bogus “fentanyl-related” duties. Ditto 10 per cent duties on energy and potash. All told, these tariffs threaten to lead to job losses, drive Canada into a recession, and decimate our auto industry and more.
Ford himself has warned Ontario could lose 500,000 jobs due to tariffs, and president of the Automotive Parts Manufacturers’ Association, Flavio Vulpe, posted on X that Canada avoiding additional tariffs is “Like dodging a bullet into the path of a tank.”
In response to auto tariffs, Carney announced a similar counter-tariff of 25 per cent on US vehicle imports that are non-compliant with the Canada-US-Mexico free trade agreement. The move is expected to generate $8 billion in revenue, which Canadians will pay for, just as Americans bear the burden of Trump’s tariffs — though at least the Canadian auto tariff money will be returned to the industry to protect workers and their jobs.
It’s tempting to try to find a foothold here, a handhold, something, anything to grasp onto for some stability or hope. But as things stand, you’re likely to find such hope illusory.
The Trump administration is maniacal, unpredictable and self-destructive — which, as the world’s biggest economy, is destructive to everyone. Nothing the president says or does one day can be trusted to hold onto the next. Promises, explanations, elaborations and even corrections are meaningless. There are no guarantees. Indeed, during his last term, Trump forced a renegotiation of the North American Free Trade agreement, which he called “perhaps the worst trade deal ever made,” only to turn around and tear up his own new deal during the early days of his second term.
The morning after Trump’s Wednesday press conference, stock markets in the US, Canada, and around the world plunged. In Windsor, automaker Stellantis announced it was shutting down its factory for two weeks because of tariffs. That factory is critical to the city and an important part of the country’s auto industry. The Conference Board of Canada is warning that many census metropolitan areas are going to feel the tariff pain, including Waterloo and Guelph, which stand to lose 2.2 and 2.3 per cent of their GDP respectively.
In the face of broad-spectrum US tariffs on dozens of countries, the risk of a global recession is real. Whatever harm Americans are doing to Canada, and there’s plenty of it, will be exacerbated by a worldwide economic slowdown that, if it should arrive, could be long and painful. At the very least, a US recession, which is increasingly likely, will drag Canada into one, too.
It’s fine to appreciate small victories, like avoiding additional tariffs, but any good news must be taken in context and, right now, that context is likely to be grim stuff. Canada must remain focused on the real and present danger of Trump’s current and potential future tariff regime, which threatens not just our economy, but our sovereignty, too. That focus, and the refusal to overstate the value of any reprieves, will be the only way we can meet the challenges we face head on, conscious of what must be done, and grind our way through them together.
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