Trump tariffs squeeze Canadian economy, raising prices and threatening jobs

President Donald Trump's trade actions have imposed steep U.S. tariffs on about $20 billion of Canadian goods, hitting steel, aluminum, lumber and automobiles that rely on the American market. Steel exports have dropped by roughly half and lumber shipments sit about 20% below 2024 figures, while production and jobs in those industries have contracted. Canadian households are feeling the pressure, with consumer prices 3% higher than a year earlier, grocery costs up 2.8% and transportation expenses soaring 7.5%; goods directly affected by the tariffs are about 6% more expensive than similar untariffed items.

Analysts point out that the dispute builds on longstanding grievances, especially over Canadian dairy tariffs, even though more than 99% of U.S.-Canada trade was duty-free before 2025. The timing coincides with rising energy prices linked to the Iran war, creating a “double whammy” that further inflates costs for farmers, builders and consumers. Despite the strain, experts caution that the overall U.S.-Canada partnership remains one of the world’s strongest trading relationships and should be preserved.