U.S. President Donald Trump could hit Canada with tariffs as early as next week, raising the risks that Ottawa would impose retaliatory tariffs on the United States amid growing fears of a trade war.
“If the president does choose to proceed with tariffs on Canada, Canada will respond and everything is on the table,” Prime Minister Justin Trudeau said during a news conference Tuesday in Montebello, Que., where his team is gathered for a two-day cabinet retreat.
Trudeau signalled that Canada’s counter-tariffs could cover the value of Trump’s proposed 25 per cent tariffs on all Canadian goods.
“I support the principle of dollar-for-dollar matching tariffs. It’s something that we are absolutely going to be looking at if that is how they move forward,” he told reporters.
The Retail Council of Canada has warned that tit-for-tat tariffs could raise prices for consumers on both sides of the border.
“Retaliatory tariffs, especially ones targeting retail goods that are politically sensitive to the U.S., increase the cost of those goods for Canadians,” said Matt Poirier, vice-president of the Retail Council of Canada.
“That is because when tariffed goods are imported the buyer, in our case retailers, must pay the tariff to bring the goods into Canada for sale. These costs are most often passed along to the consumer.”
What are some goods that could get more expensive?
“If we’re looking at across-the-board tariffs, the cost of your breakfast cereal will go up,” said Fen Osler Hampson, co-chair of the Expert Group on Canada-U.S. Relations at Carleton University.
The U.S. is the world’s largest exporter of breakfast cereal and Canada is its biggest export market. According to the U.S. International Trade Administration, Canada accounts for 15 per cent of all American agricultural exports.
The USITA said that in 2022, U.S. exports had a 24 per cent market share in Canada when it came to “consumer-oriented agricultural products” – or products like breakfast cereal that are stocked in supermarkets.
According to the Foreign Agricultural Service, part of the U.S. Department of Agriculture, the U.S. exported nearly US$2.8 billion worth of cereal to Canada in 2023.
Most U.S. agricultural products have entered Canada duty-free since 1989 under the North American Free Trade Agreement (NAFTA) and more recently under the renegotiated NAFTA, now referred to as CUSMA or the USMCA in the U.S., with the industry sustaining 135,000 jobs in the U.S.
“The cost of cosmetic products after you take your shower and the soap while you take your shower, that’s likely to go up [in price],” Hampson said.
The United States is by far Canada’s largest supplier of beauty products.
Canada is the eighth largest importer of beauty products in the world, with an import value of US$1.74 billion. Of that, beauty products worth $US1.19 billion are imported from the U.S., with France in a distant second place (US$178 million).
Jack Cunningham, assistant professor at Trinity College at the University of Toronto, told Motorcycle accident toronto today last week that Ottawa could let political logic, instead of economic logic, dictate what to put tariffs on.
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“We could look at where a tariff or an export tax would hit the U.S. economy hardest and hit U.S. industries in states where Trump is popular,” he said.
Cunningham said Ottawa could target Trump’s home state of Florida, a major exporter of oranges and orange juice.
In 2022, Canada imported US$596 million worth of fruit juice, most of it (US$385 million) coming from the U.S.
Canadians love American whiskey.
In 2023, U.S. alcohol exports to Canada amounted to US$262 million a year, with whiskey alone accounting for US$76 million.
“[Canada] could impose retaliatory tariffs on American imports such as Kentucky whiskey, California wine,” Cunningham said.
Kentucky-style whiskey was among the products that Canada imposed retaliatory tariffs on during the first Trump administration.
One Canadian province is already making moves to limit American liquor on the shelves if Trump’s tariffs go through.
“I’ve sent a direction to the LCBO that if these tariffs come to clear off every bit of U.S. alcohol off the shelves. Let’s start promoting more Ontario-made wines, and the vodkas, the spirits. That’s what we need to do,” Ontario Premier Doug Ford said Monday.
David Dienesch is the CEO of Allianz Trade, a company that specializes in supply trade insurance. He said Canada’s automotive industry was already feeling the heat from the proposed tariffs.
“Concerns about the Ontario automotive sector are pervasive given how integrated our economies are in this sector, with job losses expected. Canadian consumers are already cash-strapped owing to high consumer debt levels related to our housing market,” he said.
Soon after Trump announced his plan to impose tariffs on Canadian goods, industry groups told Motorcycle accident toronto today that the integrated nature of the two economies and their supply chains could raise prices for both Americans and Canadians.
“Many components that end up in their final destination, such as a car, travel back and forth 10 to 12 times across the border. So if every time they’re impacted by the same tariff, it’s going to be very tough to remain competitive,” said Jean Simard, president and chief executive officer of the Aluminum Association of Canada.
Fresh fruits and vegetables
According to the U.S. Foreign Agricultural Service, America’s agricultural exports to Canada in 2023 amounted to US$28 billion. Consumer-oriented products, including fruits and vegetables, meats, dairy, processed food, and beverages, constituted 72 per cent of that trade with a value of US$20 billion.
Canada has consistently ranked as the top destination for most American consumer-oriented agricultural goods.
Dienesch said the impact on grocery prices could be almost immediate.
“Inflationary pressures on imported fruits and vegetables, juices, along with spirits are likely to see the immediate impact of retaliatory tariffs for Canadians,” he said.
Hampson said, “Everything you see in the healthy section of the supermarket — lettuce, nuts, fruits, melons, vegetables and tubers — will also go up.”
Seafood exports from the United States to Canada have averaged US$1.1 billion a year during the past five years, according to the U.S. Foreign Agricultural Service.
In 2023 Canada imported seafood worth C$4.57 billion, according to Fisheries and Oceans Canada. The largest share of this, $1.4 billion, came from the United States. The United States supplied 31 per cent of Canada’s seafood imports, while China supplied 12 per cent and Chile eight per cent.
The two seafood imports that could see the steepest increase in price if counter-tariffs are imposed are salmon and lobster.
Salmon alone makes up 21 per cent (C$949 million) of Canada’s seafood imports, with the largest share coming from the U.S. (C$409 million).
On the other hand, nearly 99 per cent of Canada’s lobster imports come from the United States.
Clothing, fabric, apparel and shoes
Shopping for your spring wardrobe might get more expensive.
According to World Bank data, the U.S. is Canada’s second-largest supplier of textiles and clothing, after China.
Canada is also a major destination for U.S. footwear exports, ranking second after Vietnam and accounting for 18 per cent of all U.S. footwear exports.
Amazon Prime Video and Netflix
From the new season of The Wheel of Time on Amazon Prime Video to the finale of Cobra Kai or Love Is Blind 8 on Netflix, Canadians have a lot to look forward to on American streaming services.
However, they might have to shell out more to watch their favourite shows in 2025.
Cunningham said Ottawa may emphasize tariffs on American media and digital streaming platforms.
“Netflix, for example,” he said. “We can slap a tax on that. We could slap a tax on American magazines and movies.”
Hampson said if Canada imposes broad counter-tariffs, “the price of your Netflix or Amazon Prime subscription will go up.”
If Trump imposes tariffs in the first week of February like he mused, that could impact Valentine’s Day for many Canadians.
Hampson said Canada imports a significant volume of fresh-cut flowers from the U.S., which could get more expensive.
The U.S. exported nearly 2.3 million kilograms of fresh-cut flowers to Canada in 2022 and was the third-largest supplier of flowers to Canada after Colombia and Ecuador.
If your Valentine prefers chocolates to flowers, they might be disappointed.
According to the Foreign Agricultural Service, chocolate and cocoa product exports from the U.S. to Canada have grown by 23 per cent, from US$713 million to US$878 million, over the last five years.
Confectionery exports are also up 41 per cent to over US$447 million.
Canada also imported jams and jellies worth $64 million from the U.S.