Canada's Trade War Woes: Trump Administration Predicts Devastating Impact
The Trump administration has predicted that a trade war between the US and Canada would be 'devastating' for the northern neighbor. On August 23, US Transportation Secretary Sean Duffy said Canada would come out worse in a trade war with President Donald Trump.
Canada accounts for roughly 70% of its exports to the US, making it heavily reliant on the market. Duffy warned that Canadian Prime Minister Mark Carney's decision to impose retaliatory tariffs was 'foolish' and would ultimately harm Canada's economy.
The rift between the two countries has been building since Trump began his second term in January 2025. The US had imposed new 50% tariffs on about $20 billion worth of Canadian goods, or 5.5% of Canadian exports to the US. In response, Canada matched US tariffs, targeting the US steel and dairy industries.
Carney has said that Canada must reduce its reliance on the US and has won political support at home for his willingness to stand up to Washington.