After negotiations between the US and Canada, President Trump has reversed his decision to impose a 50% tariff on Canadian steel and aluminum. However, Canada announced on March 12th that starting from the 13th, they would levy a 25% tariff on $29.8 billion CAD worth of American imports. Despite the seeming tensions in US-Canada relations, experts believe that Trump’s pressure on Canada is aimed at reordering alliances, rectifying trade imbalances, with the ultimate goal of standing up against the disrupter of the world order, the CCP.
President Trump canceled the decision to raise tariffs on Canadian steel and aluminum imports to 50% from March 12th. This news was confirmed by White House senior trade advisor Peter Navarro on the evening of March 11th.
The tit-for-tat tariffs between the US and Canada have unfolded in a twisty manner and have yet to settle.
Trump previously announced additional tariffs of 25% on steel and aluminum imports from Canada, bringing the total tariff to 50%. This was in response to Ontario’s imposition of a 25% surtax on US electricity exports.
Trump also demanded Canada to revoke the “anti-American farmer tariffs” on US dairy products and warned that if not canceled, the US will significantly increase tariffs on Canadian automobiles on April 2nd.
Ontario had earlier decided to impose a 25% surtax on US electricity exports, which Ontario Premier Doug Ford said was in response to Trump imposing a 25% tariff on Canadian imports.
On March 11th, Trump posted on Truth Social that he had instructed the Commerce Secretary to impose an additional 25% tariff on all steel and aluminum imports from Canada, bringing the total tariff to 50%. Canada would become one of the countries with the highest tariffs in the world.
Trump stated that if Canada does not cancel other “harsh and long-standing tariffs on the US,” tariffs on automobile imports will be significantly increased on April 2nd. He emphasized that this would “essentially and permanently shut down Canada’s auto manufacturing industry.”
Furthermore, Trump added, “These cars can easily be made in the US! In addition, Canada contributes very little to national security and relies on US military protection. We subsidize Canada over $200 billion a year. Why? This cannot continue. The only reasonable course of action is to make Canada our cherished ’51st state.'”
He added, “This will make all tariffs and everything else disappear completely. Tax revenue for Canadians will significantly decrease, and they will be safer in military and other aspects than ever before, without the northern border issue. The greatest and strongest country in the world will be even bigger, better, and stronger than ever before, with Canada as a crucial component.”
Subsequently, the standoff situation underwent changes. The Premier of Ontario and the US Commerce Secretary held negotiations and agreed to stop imposing a surtax on electricity. Therefore, Trump reversed his decision to impose a 50% tariff on Canadian steel and aluminum products.
However, the 25% tariffs imposed by the US on Canadian steel and aluminum went into effect on March 12th. Canada announced on the 12th that starting from 12:01 am on the 13th, they would impose a 25% tariff on $29.8 billion CAD (equivalent to $20.8 billion USD) worth of American imports.
Assistant Professor of Diplomacy and International Relations at Tamkang University in Taiwan, Zheng Qinmo, expressed in an interview with Epoch Times that Trump’s levy of tariffs on Canada and Mexico is part of his grand strategy. It aims to block the Communist Party of China’s “infiltration into the US” through Canada and Mexico. However, the realization of the “51st state” and the likelihood are slim.
Zheng Qinmo explained, “Indeed, there are unfair tariff issues between the US and Canada. For example, Canada imposes high tariffs on US dairy products.” From Trump’s grand strategy perspective, it is about preventing Canada and Mexico from becoming the infiltration route for the CCP and goods entering the US.
On March 9th, amidst mounting pressures from the Trump administration and tensions brewing in the US-Canada relations, Mark Carney, former governor of the Bank of Canada, won the Liberal Party’s internal election, replacing Justin Trudeau as the party leader and poised to become the next Canadian Prime Minister.
In his farewell speech, Trudeau warned that Canada is facing a “moment in which the nation’s survival is determined” and confronts “challenges to its existence.”
Trump criticized the Canadian government for its handling of issues such as fentanyl and controlling illegal immigration into the US, particularly the imposition of tariffs on Canada and the calls for Canada to become the “51st state of the US,” leading to heightened tensions in US-Canada relations.
In the midst of historic challenges facing US-Canada relations, Carney’s stance towards the US and his strategies have become a focal point.
Carney stated that he “will not let Trump have his way.” He affirmed that Canada’s counter-tariffs against the US are the right move and vowed to maintain the tariff measures once in office.
He emphasized that Canada wants to “control its economic destiny” and “Canada is not the US and will never in any way or in any form become a part of the US.”
At 59 years old, Carney, a Harvard and Cambridge graduate, has had experience serving as the Governor of the Bank of Canada and later as the Governor of the Bank of England in 2013.
Carney is viewed as a political novice and will predominantly face economic and diplomatic challenges in response to Trump’s trade war, the impact on the US-Canada traditional alliance, and international security cooperation.
Moreover, how Canada handles its relationship with the CCP is seen as another challenge for the Carney government. Since the Huawei incident in 2018, tensions in Canadian-China relations have risen from politics and diplomacy to trade and economic areas. The day after Carney’s election, a spokesperson for the Chinese Foreign Ministry called for him to adopt a “positive” and “pragmatic” policy towards China.
China recently announced that starting from March 20th, they would impose tariffs on multiple Canadian imports, including a 100% tariff on canola oil.
In this scenario, the question arises whether Carney will align with China or continue to resolve differences and contradictions on the foundation of maintaining the traditional alliance with the US.
Regarding Canada’s concerns about becoming a state of the US, Zheng Qinmo believes that amidst the current disputes between the US and Canada, this issue “is not the focal point.” “What’s more important is that although Canada, under Trump’s leadership, signed the USMCA trade agreement, they should be partner countries. However, both Canada and Mexico serve as entry points for Chinese goods to enter the US. This is what Trump wants to block. The current situation between the US and Canada should only be a transitional phase. Sooner or later, Canada has to come back and become a part of the US strategy worldwide.”
Zheng Qinmo asserts that “Canada does have strong nationalist tendencies now.” Faced with the strong-willed Trump, Canada naturally resents and adopts a tough stance. Ultimately, the issues need to be resolved through coordination because there is too much interconnectedness and cooperation between the US and Canada.
The US and Canada are long-standing allies, and their defense cooperation is more extensive than any other in the world. In 1940, they established a Permanent Joint Board on Defense, and in 1958, the two nations jointly established the North American Aerospace Defense Command. Following the 9/11 attacks, Canada supported the US in forming an anti-terrorism alliance and cooperated with the US in some international military operations.
Although the two countries have had wars in the past, since the end of the Second War of Independence in 1815, their relations have remained stable and mutually beneficial. The US is Canada’s only land neighbor, sharing the world’s longest border. Over the years, there has been frequent movement of people between the two countries, and political and economic cooperation has been smooth.
A 2012 poll showed that Canada was the most favored country among Americans, with 96% expressing a liking for Canada. In 2014, a poll revealed that 86% of Americans had positive views regarding Canada’s influence.
The US and Canada are also the largest trading partners globally. In August 1992, the US, Canada, and Mexico signed the North American Free Trade Agreement, which came into effect in 1994, becoming the largest trading bloc globally. Over the years, economic and trade relations between the three countries have flourished.
In 2024, Canada became the second-largest trade partner of the US after Mexico, with a bilateral trade volume of $761.1 billion, and Canada held a $63.3 billion trade surplus with the US.
Zheng Qinmo believes that “there won’t be significant changes in the traditional US-Canada relationship” and that “Trump is merely rectifying the unfair tariffs, seeking fair trade, which is an inevitable trend.”
He stated that after China’s entry into the WTO, it profited massively in foreign exchange from the US, enjoying the benefits of free trade but then turned around to disrupt free trade, monopolize industrial chains, engage in dumping practices, and challenge existing international order. These are the “major objectives that Trump should address.”
Zheng Qinmo analyzed, “To prevent external threats, one must take care of internal affairs first.” Trump is coordinating allies, establishing a fairer trade system and supply chain. Then, everyone can unite to confront the challenge to free trade and the existing international order posed by China.