Canada Turns to Plan B as Trump's Tariffs Bite

Canada is reeling from US President Donald Trump's latest move to impose 50% tariffs on certain Canadian goods, further straining bilateral trade and prompting Ottawa to diversify its economic partnerships.

The tariffs, which took effect on August 22, target $20 billion worth of goods or 5.5% of Canadian exports to the US, including hockey sticks and cement. Prime Minister Mike Carney has vowed to match these tariffs 'dollar for dollar' to protect Canadian workers and businesses.

Canada's economy is heavily interconnected with the US, with around 70% of its exports heading south of the border. Previous Trump levies on autos, steel, aluminum, and lumber have already had a significant impact, forcing job losses and stifling growth.

To mitigate these effects, Carney has focused on diversifying economic partnerships to reduce Canada's reliance on the US market. He has signed preliminary agreements with China, including one for the import of electric vehicles, and strengthened relations with Europe. The value of exports to non-US markets jumped by 11% in 2025.