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On Thursday in the US, Trump announced that starting next month, the US will impose import tariffs of up to 35% on all Canadian goods. The news has shaken North America and also made global markets tense again.

In a public letter to Canadian Prime Minister Mark Carney, Trump wrote, "These tariffs may be adjusted according to our relationship with your country, either increased or decreased." This is one of the most intense trade provocations between the US and Canada since 2018.

Fentanyl and Political Chess

Compared to previous tariff disputes, the reason Trump gave this time is controversial: fighting fentanyl. The White House said Canada needs to step up efforts to prevent fentanyl from flowing into the US, otherwise it must "pay the price."

Fentanyl

However, data shows that most fentanyl and precursor chemicals still enter through the southern border, with very little flow through the northern border. According to the annual report of the US Customs and Border Protection, the amount of fentanyl seized at the northern border in 2024 was less than one-tenth of that at the southern border.

Former US Ambassador to Canada Bruce Heyman told the media, "This is not a real border crisis; it's naked political intimidation."

Canada's Response: Calm and Firm

Prime Minister Carney has not directly responded to Trump's threat so far, merely stating that he would "assess the situation" and reiterating the importance of US-Canada economic cooperation. Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland said, "No one benefits from a trade war, especially when the global economy is slowing down."

Analysts point out that Ottawa tends to adopt a restrained strategy to avoid further escalation of the situation. After all, the US remains Canada's largest trading partner, with bilateral trade exceeding $700 billion. For Trump, this is also a political maneuver that both satisfies his "tough image" and draws voter attention.

The Old Account of Tariff War

This is not the first time Trump has imposed high tariffs on Canadian goods. Looking back over the past seven years, the US-Canada trade relationship has experienced several severe fluctuations.

In June 2018, the Trump administration imposed a 25% tariff on Canadian steel and a 10% tariff on aluminum, citing "national security." Then-Canadian Prime Minister Justin Trudeau strongly protested and immediately imposed retaliatory tariffs on $1.66 billion in American products, including whiskey, juice, bicycles, and mattresses.

Trump and Trudeau

The same summer's G7 summit further worsened the relationship between the two countries. At that time, Trump called Trudeau "weak and dishonest" on social media and threatened to impose tariffs on Canadian cars. Trudeau responded, "Canadians won't be bullied."

After months of arduous negotiations, the two sides agreed to remove some tariffs in 2019, and in September of the same year, they signed the new USMCA, replacing the old NAFTA. Trump once claimed this marked an "American victory," but some Canadian government officials and economists criticized that the uncertainty caused by the tariffs had caused long-term harm to Canadian families and businesses.

In 2020, Trump suddenly announced the resumption of a 10% tariff on certain Canadian aluminum products. Canada then threatened retaliation, and eventually, two months later, the US withdrew the measures.

Beneath the Joke of the "51st State"

For months, Trump's rhetoric toward Canada has become increasingly tough, repeatedly joking about "annexing Canada" and making it the "51st state" of the US during campaign rallies. Although the White House later denied this as an official policy, it failed to completely dispel public concerns.

The Canadian Globe and Mail commented that this statement "reflects how the Trump administration views allies: not just partners, but also objects that can be pressured at any time." Carney and other Canadian leaders immediately publicly stated that Canada would uphold its sovereignty and independence, emphasizing that the two countries should cooperate as equal partners.

New Uncertainty: The Shadow of North American Supply Chains

From cars to timber, energy, and agricultural products, the US and Canada have deep economic complementarities. If a 35% tariff is fully implemented, it would undoubtedly severely damage cross-border supply chains.

Major exports from Canada to the US include crude oil, auto parts, softwood, aluminum, and steel. If these goods are taxed, the procurement costs for US companies will significantly increase, potentially leading to higher prices for American consumers.

Especially in the automotive industry, which relies on complex North American supply chains. A Detroit automaker executive admitted, "We have hundreds of trucks crossing the US-Canada border every day. If tariffs are imposed, costs and delivery times will be affected."

Trump-style Negotiation: Threats and Deals

Trump is known in business for "maximum pressure": first setting a high price or threatening measures, then negotiating to get the other party to make concessions. His letter also implies that if Canada cooperates in fighting fentanyl, the US might lower the tariffs. This style of negotiation, which combines risk with calculation, is both bold and strategic.

Critics argue that while this approach may work in the short term, it undermines trust and strains relations with traditional allies in the long run. Canadian senior trade negotiator Peter Clark said, "This is using crises to gain trade advantages, and it also threatens the stability of the North American economy."

What's Next for Trump?

The Trump administration has not yet released details of the tariff list, nor has it specified whether the products covered are still eligible for tariff exemptions. If these goods are also taxed, US-Canada relations are bound to deteriorate further.

Regardless of how politically motivated the latest tariffs against Canada are, they will bring real economic consequences: rising commodity prices, damaged supply chains, and uncertainty in the relationship between the two countries.

Trump briefly stated outside the White House, "Of course, we hope Canada will cooperate, but if they don't, Americans won't be bullied."

After just a few years of stability under the new US-Mexico-Canada Agreement (USMCA), North America is once again shrouded in uncertainty. And Trump's trade policies once again remind the world that between globalization and protectionism, toughness is often just the beginning of negotiations, but the cost is borne by more people.

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