The fact that America and Canada’s relationship has turned even more tumultuous was quite evident with Donald Trump’s announcement of new tariff rates and how it could affect Canada. Trump also repeatedly hinted at making Canada the 51st state of America, which naturally did not sit well with the Canadian administration.
Shortly after he became the president, Trump had levied a 25% tariff on Canadian goods. Canada retaliated back by announcing the imposing of taxes worth $20.7 billion USD. However, that did not stop Trump from going ahead with his proposed tariff rates on March 4 and only 10% tax was levied on Canadian energy.
The pause on reciprocal tariffs announced by President Trump is a welcome reprieve for the global economy.
As President Trump and I have agreed, the U.S. President and the Canadian Prime Minister will commence negotiations on a new economic and security relationship immediately…
— Mark Carney (@MarkJCarney) April 9, 2025
Trump, however, mentioned that on April 2, 60 other countries would be charged reciprocal tariffs and when that list was announced, the names of Canada and Mexico were not there. Post the announcement of the tariff rates, the market witnessed a huge crash and as complete chaos broke, Trump announced a 90-day pause on some of the higher rates of certain countries though nothing particularly changed for Canada.
The pause has however, brought a change to the attitude with which Mark Carney, the present Canadian PM had addressed the tax situation previously. Carney had said, “In this trade war, like in hockey and soccer, we will win. We didn’t ask for this fight, but Canadians are always ready when someone drops the gloves.”
He had also mentioned, “I reject any attempts to weaken Canada, to wear us down, to break us so that America can own us, that will never happen. Our response to these latest tariffs is to fight, is to protect and to build.” However, after the 90-day pause was announced, his tone seemed to get softer as he took to X to post that this decision was a “welcome reprieve for the global economy.”
He further added that he would be interested to negotiate a “new economic and security relationship’ with the US. As President Trump and I have agreed, the U.S. president and the Canadian prime minister will commence negotiations on a new economic and security relationship immediately following the Federal election.” The election he mentioned is to take place on April 28, 2025.
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His post also mentioned, “bilateral negotiations with other countries will ‘fundamentally’ restructure the global trading system and that Canada ‘must also continue to deepen its relationships with trading partners that share our values. This election is importantly about who can best fight for Canadian families, workers, and businesses at the negotiating tables with the United States and other potential partner countries. The stakes have never been higher.”
As Careny seems to be taking a more amicable approach in addressing the America situation, it remains to be seen if Donald Trump indeed spares Canada from the tax horrors he had previously mentioned or if he proceeds with that and causes even more chaos in the economic market.
