Tariffs on some American goods, like agricultural, dairy or poultry in Canada are not designed to give Canadian producers an advantage. The reality as agreed to under the WTO, NAFTA and CUSMA, was to actually level the playing field, as American producers of these specific products could, without a tariff, put the Canadian producers out of business entirely based on the size of their market and that ability to lower costs below where Canadian producers could compete.
America placed tariffs in 2018 on Canadian steel (25%) and on aluminum at (10%) citing national security concerns. At the same time, America imposed duties on Canadian softwood lumber. America also restricted certain Canadian dairy products under trade agreements like NAFTA and CUSMA. Canadian producers were not attempting to import dairy into the U.S. as U.S. producers actually had an economic advantage.
On January 1st of 2025, tariffs on Dairy, Poultry and Eggs, as well as small tariffs on grain products were maintained to protect both countries industries, primarily for domestic consumption.
Overproduction by American dairy farmers reached $8.2 billion, and Canada and Mexico imported 40% of these dairy products with the retained tariff rated.
When signed, both parties in the agreement stated that the terms were ‘mutually beneficial’.
“Overall, the agreements aim to balance interests, but debates often arise about whether one side gains more. For example, some argue that the U.S. benefits more due to its larger economy and leverage, while others highlight Canada’s ability to protect critical industries like dairy and cultural sectors.”
https://thefulcrum.us/business-democracy/trump-tariffs-canada
The trade imbalance is largely due to the U.S. requiring more energy, however America benefits from,
- An integrated Supply Chain
- Balanced Trade in Services
- Economic Growth
In Canada, with a population of less than 1/8th that of the U.S., a trade imbalance is almost certain. Forty million Canadians will not consume the same level of production as 340 million Americans.
Canada sees the relationship as one of mutual benefit, not competition.
However, this is where Trump now has exerted his opinion that all jobs in specific sectors, now totally integrated between the two countries, should only be within the United States, hence his threats and abuse, which includes his tearing up of an international trade agreement, against the WTO and the rule of law.
However, ever the extortionist, Trump has decided that he must win at all cost, even if illegally, and therefore he intends to damage the Canadian economy to such an extent that Canadians will succumb to extortion and join the U.S..
I can tell you without equivocation, — that will never happen.
In fact, something akin to a revolution in trade is occurring in Canada, where we will diversify Canadian exports to such an extent that there will be, at its end, almost no trade with America.
America seeks zero-sum gamesmanship, not ‘fair trade’.
What they will get in return is isolationism and virtually no influence over Canada.
Canadians are also willing to move away from the U.S. sphere of influence geopolitically. To do this, Canada is going to align its interests with actual democracies around the world, and to militarize.
Canada is looking to double the size of its armed forces and more than double its defence budget. It may even seek a nuclear deterrence by equipping its soon to be fleet of AIP Ballistic Missile submarines with nuclear warheads from either France or Britain.
America is no friend.
America is no ally.
In fact, Canadians don’t trust Americans at all.
Leave a Reply