CITIZENS NEWS

Trudeau escalates trade war with U.S., imposes 25% tariffs on $155 billion in American goods

By isabelle // 2025-03-04

• Canada imposes 25% tariffs on $155 billion of U.S. goods in retaliation for Trump’s tariffs on Canadian imports, citing fentanyl concerns and trade imbalances.
• Trudeau calls U.S. tariffs “unjustified,” warning they will harm both economies and disrupt a successful trading relationship.
• Canada’s tariffs will roll out in two phases, targeting goods like coffee, wine, steel, and automobiles, with threats to cut electricity exports to U.S. states.
• Economic fallout begins as the S&P 500 drops 2% and Canada’s central bank warns of long-term damage to growth and output.
• Trudeau’s combative stance risks alienating the U.S., with both nations facing higher costs and economic losses from the escalating trade war.

Canadian Prime Minister Justin Trudeau announced Monday that Canada will impose 25% tariffs on $155 billion worth of American goods, effective at midnight. The move comes in direct response to President Donald Trump’s decision to slap 25% tariffs on Canadian imports, citing the need to combat the flow of fentanyl into the U.S. and address trade imbalances. Trudeau, however, called the U.S. tariffs “unjustified” and vowed to retaliate, warning that the measures will hurt both nations. The trade war, which could disrupt one of the world’s most successful trading relationships, stems from Trump’s frustration with Canada’s inaction on fentanyl trafficking. “Vast amounts of fentanyl have poured into our country from Mexico, and as you know, also from China, where it goes to Mexico and goes to Canada,” Trump said Monday. The president also emphasized his goal of reducing the U.S. trade deficit and bringing manufacturing jobs back to America. Trudeau, on the other hand, accused Trump of sabotaging North American prosperity. “Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs,” Trudeau warned. “Tariffs will disrupt an incredibly successful trading relationship.”

Phased tariffs and threats to U.S. power supply

Canada’s retaliatory tariffs will be implemented in two phases. The first phase, effective immediately, targets $30 billion worth of U.S. goods, including coffee, orange juice, and wine. The second phase, set to roll out over 21 days, will impose tariffs on an additional $125 billion worth of American exports, such as automobiles, steel, and aluminum. Trudeau made it clear that the tariffs will remain in place until the U.S. withdraws its own measures. But the Canadian leader didn’t stop there. In a bold move, Ontario Premier Doug Ford threatened to cut off electricity exports to U.S. states reliant on Canadian power, including Michigan, Minnesota, and New York. “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. While Trudeau has positioned himself as a defender of Canadian interests, his leadership has been lackluster on key issues, including trade and border security. Trump’s tariffs were intended to pressure Canada into cracking down on fentanyl trafficking, but Trudeau’s response has been to escalate tensions rather than address the root cause. The economic fallout from the trade war is already being felt. The S&P 500 index dropped 2% on Monday as investors braced for the impact of tariffs. Tiff Macklem, Governor of the Bank of Canada, warned that the tariffs could lead to a “structural change” in the Canadian economy, wiping out growth and leaving output permanently lower. Trudeau’s rhetoric has also drawn criticism. In a fiery statement, he called Trump’s tariffs “very dumb” and accused the U.S. of appeasing Russia while targeting its closest ally. “Canadians are reasonable, and we are polite, but we will not back down from a fight,” Trudeau said. Yet his combative stance risks alienating the U.S. at a time when cooperation is needed to address shared challenges, such as the fentanyl crisis and economic recovery.

A costly standoff

As the trade war intensifies, it’s clear that both nations stand to lose. American consumers will face higher prices for everyday goods, while Canadian industries reliant on U.S. trade could suffer significant losses. Trudeau’s decision to retaliate rather than negotiate a solution underscores his failure to prioritize Canada’s long-term interests. Although Trump’s tactics may be controversial, his goal of addressing fentanyl trafficking and trade imbalances is not without merit. Trudeau, however, has chosen confrontation over collaboration, putting politics ahead of prosperity in a trade war that will leave scars on both sides of the border. Sources for this article include: NYPost.com FoxBusiness.com YourNews.com

economy market crash national security Trump border security Canada big government risk chaos pensions Trudeau trafficking supply chain government debt tariffs trade wars