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Just the Facts: 2025 Canada vs. United States Tariff War

Just the Facts: 2025 Canada vs. United States Tariff War

Trucks head to the Ambassador Bridge between Windsor, Canada and Detroit, Michigan on the first day of President Donald Trump's new 25% tariffs on goods from Canada and Mexico on March 4, 2025, in Windsor, Canada.

Getty Images, Bill Pugliano

Our ongoing series, “Just the Facts,” strives to approach news stories with both an open mind and skepticism, so we may present our readers with a broad spectrum of viewpoints through diligent research and critical thinking. As best we can, we look to remove personal bias from our reporting and seek a variety of perspectives in both our news gathering and selection of opinion pieces.

On Sunday, March 9th, The Fulcrum ran a story called “Just the Facts: Canadian Tariffs”. Since Sunday, there has been a mind-boggling flurry of activity in the ongoing trade battle between the United States and Canada.


So much has happened since Sunday…….So, here’s an update:

What are the Tariffs imposed by the U.S. against Canada so far in 2025 and by Canada against the U.S. so far in 2025?

In 2025, the trade relationship between the U.S. and Canada has been marked by escalating tariffs:

U.S. Tariffs on Canada:

  • The U.S. imposed 25% tariffs on Canadian steel and aluminum imports. The Trump administration threatened to increase the tariff to 50% but this has not yet been implemented.
  • Recently, Ontario, Canada, imposed a 25% tariff on electricity exported to the United States. This measure was part of a broader trade dispute with the U.S., particularly in response to tariffs on Canadian steel and aluminum. However, after discussions between Ontario Premier Doug Ford and U.S. Secretary of Commerce Howard Lutnick, the tariff was suspended.

Canada's Tariffs on the U.S. in response to the steel and aluminum tariffs:

  • Canada has retaliated against the U.S. 25% tariff on steel and aluminum by imposing its own tariffs. Canada introduced a 25% tariff on $30 billion worth of U.S. goods, including orange juice, peanut butter, wine, spirits, beer, coffee, appliances, and more. Canada has plans to expand these tariffs to cover an additional $125 billion worth of products. This move was part of a broader trade dispute between the two countries.

This trade tension has already disrupted supply chains and raised concerns about economic impacts on both sides.

If the steel and aluminum tariffs stay in place, how much will that add to the cost of a car manufactured in the U.S.?

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The steel and aluminum tariffs in place could significantly impact the cost of manufacturing cars in the U.S.:

  • A 25% tariff on steel and 10% on aluminum could increase the cost of producing a typical vehicle by $1,500.
  • Steel and aluminum make up over 60% of a car's weight, so these tariffs directly affect production costs.
  • Smaller car manufacturers may face even greater challenges, as they have less flexibility to absorb or offset these increased costs.

This could lead to higher prices for consumers and tighter profit margins for automakers.

Will these new tariffs cost more to the United States or to Canada:

The economic impact of the tariffs between the U.S. and Canada in 2025 is significant for both nations, but the exact costs vary, depending on a variety of variables.

  • Canada: The tariffs are expected to have a larger proportional impact on Canada's economy. Canadian exports to the U.S. represent roughly 20% of its GDP, and the tariffs could lead to a 2.5%-3% decline in GDP2. Canadian households may face annual costs of around $1,900.
  • United States: While the U.S. economy is larger and less reliant on Canadian trade, the tariffs still have notable effects. U.S. households could lose about $1,300 per year, and gasoline prices might rise by $0.30-$0.70 per gallon due to energy tariffs. Additionally, industries dependent on Canadian imports, such as manufacturing, could face disruptions.

In summary, the relative economic burden is heavier for Canada due to its greater reliance on trade with the U.S., but both countries are experiencing significant costs.

What is the dollar amount of U.S. citizen travel to Canada and Canadian travel to the United States?

In 2025, travel between the U.S. and Canada remains significant, though exact dollar amounts for this year are not readily available. However, here are some insights:

  • U.S. Citizens Traveling to Canada: In 2024, U.S. residents made 23.4 million trips to Canada, an increase of 10.7% from the previous year. While the dollar amount spent isn't specified, the favorable exchange rate often makes Canada an attractive destination for American travelers.
  • Canadian Citizens Traveling to the U.S.: In 2024, Canadian residents took 39 million trips to the U.S., a 4.4% increase from 2023. A 10% reduction in Canadian travel to the U.S. could result in $2.1 billion in lost spending, highlighting the economic impact of cross-border tourism.

If you have another subject you’d like “just the facts” on, let us know by emailing us at newsroom@thefulcrum.us.


David Nevins is co-publisher of The Fulcrum and co-founder and board chairman of the Bridge Alliance Education Fund.

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